Automotive Software Market Analysis

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.