Automotive Software Market Size By Software (Autonomous Driving Software, Safety & Security Software, Vehicle Management Software, Infotainment Software), By Application (Engine Management System (EMS), Anti-Lock Braking System(ABS), Airbag control, Car Navigation System, Infotainment System, Mobility Service), By Vehicle Type (Passenger Vehicle, Commercial Vehicle), By End-use (Manufacturer Retail Store, Automotive Dealer, Automotive Repair Store, Auto Part Wholesaler & Agent), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2019 - 2025

Automotive Software Market Size

Automotive Software Market size estimated at USD 18 billion in 2018 and is poised to register gains at over 15% between 2019 and 2025. The industry growth is due to growing demand for passenger safety & comfort and rising adoption of connected vehicles.
 

Stringent government regulations related to vehicle safety and collaboration of government authorities with automotive software developers are expected to accelerate innovations in the technology market. The rapid adoption of IoT and the rising internet penetration will help drivers to visualize objects and obstacles & other vehicles on the road to avoid collision and maintain a safe distance by either alerting the driver or applying the brake automatically.
 

The automotive software market demand is attributed to rapid growth in the use of electronic components to enhance various features of vehicles such as ADAS and infotainment systems. The growing automobile sector coupled with technological developments provides enhanced diving experience, increasing electronic appliances in vehicles. With the rapid adoption of connected vehicles and government partners to build infrastructure for connected vehicles, technologies such as vehicle to vehicle (V2V) and vehicle to infrastructure (V2I) are increasing the utilization of electronic products in automotive software.
 

Automotive Software Market Analysis

The vehicle management software is expected to hold a market share of over 30% by 2025 owing to an increase in the demand to reduce road fatalities occurring due to human errors. The vehicle management software provides vehicle self-diagnosis, fuel management, driver fatigue management, and accident tracking, helping passengers to keep track of vehicles. This helps passengers to maintain the vehicle through proper maintenance and regular check-ups. The automobile manufacturers are deploying vehicle management software to feed passengers with the health of vehicles.
 

The autonomous driving software segment is expected to grow at a rate of around 18% during the forecast period led by increasing demand for convenient & safe driving practices. The automotive manufacturers are increasingly adopting advanced technologies, such as AI, VR, and AR, to assist the driver while driving and parking to recognize the objects and prevent collisions or crashes.
 

The engine management system (EMS) application held an automotive software market share of 25% impelled by growing need to improve vehicle performance and efficiency. The government authorities are making stringent regulation related to fuel emissions, fueling the adoption of EMS. For instance, Euro 5 and Bharat stage 6 regulations are implementing the mandatory presence of electronic EMS in vehicles. The EMS is expected to constantly improve processor capabilities and control theory research to provide reduced emissions, increased drivability, and enhanced performance & efficiency.
 

The mobility service segment is expected to grow at a CAGR of over 20% to 2025 due to growing ride-hailing and cab sharing services. The increasing penetration of the internet is majorly attributing to the growth of this segment. The developing countries in the Europe and Asia Pacific region are also developing infrastructure to support mobility services.
 

The passenger vehicle segment in the automotive software market accounted for 80% revenue share in 2018 due to an increase in the demand for luxury, comfort, and convenience. The emerging vehicle financing companies are encouraging the passenger vehicles industry by providing financial support in terms of loans to own the vehicle. The growing adoption of various advanced technologies, such as AI, VR, and machine learning, is transforming vehicles into software-driven devices.
 

The commercial vehicle segment is expected to grow at a rate of over 19% during the forecast period due to the adoption of smart logistics across the transportation sector. The commercial vehicles have also gained traction due to the increased environmental awareness among consumers to reduce carbon footprints.
 

The manufacturer’s retail store will witness over 19% growth in the projected timeline. Emerging digitization, evolving customer needs, several new entrants, and stringent government regulations are increasing competition in aftermarket sales of the automotive software. This has impacted paradigm shifts in retail from a product-driven to a customer-centric approach to drive customer loyalty and to adapt to changing customer behavior and expectations, proliferating the growth of manufacturer retail stores in the end-use segment.
 

The automotive dealer end-user is set to account for 40% share in the industry by 2025 driven by increasing number of products & options, highly competitive market, and pressure imposed by OEMs. The automotive dealers are using this software to optimize the supply chain and inventory management to reduce the operational cost.
 

North America region held around 35% automotive software market share in 2018 owing to presence of a large number of automakers and technology giants. The growing vehicle production, increase in the number of connected cars, rapidly changing in-vehicle electronics architecture, C-V2X technology developments, and expansion of leading OEMs are the other factors contributing to market growth. The region also has a favorable regulatory framework for self-driving vehicles, which has allowed companies to conduct tests on autonomous vehicles. The Canadian authorities, on the other hand, are currently observing autonomous developments in the U.S. markets to develop best practices and a regulatory framework for self-driving cars. 
 

Automotive Software Market Share

The major companies operating in the market are collaborating to deliver automated ride-hailing services. For instance, in November 2018, Bosch and Daimler partnered to run a test program for automated on-demand ride-hailing service. The on-demand ride-hailing service applications offer an automated driving experience to a selected passenger segment in the U.S.
 

Some of the key players operating in the automotive software industry are:

• Autodesk Inc
• Bosch Software Innovation GmbH
• Ansys, Inc
• CDK Global LLC
• Daimler AG
• Dassault Systèmes SE
• Cox Automotive
•  DealerTrack Holdings, Inc
• Ford Motor Company
• Delphi Technologies
• General Motors Company
• Genesys
• Nvidia Corporation
• Honda Motor Company
• Oracle Corporation
• SAP SESolera Holdings
• The Reynolds
• Reynolds Company
• Siemens PLM Software, Inc
• Wipro Limited.
   

Industry Background

The automotive software in vehicles began with incremental automation features for safety and convenience with cruise control and antilock braking systems. According to the National Highway Traffic Safety Administration (NHTSA), between 2010 and 2016, advanced driver assistance features such as rearview video camera, lane-keeping assistance, automatic emergency braking, and collision detection emerged. This software is helping drivers to stay in the lane along with adaptive cruise control technology since 2016. With the increasing internet penetration and the growing demand for the comfort of passengers in vehicles, OEMs are expected to improve the features of infotainment and driver assistance during the forecast period. Future technological trends such as crash prevention, functional safety, programmable car, interconnected car networking, and advanced energy management.