Automotive Software Market Size, Share & Trend Analysis by 2030

 The global automotive software market size was valued at USD 19.0 billion in 2023 and is expected to reach USD 32.3 billion by 2030, at a CAGR of 7.8%, during the forecast period 2023 to 2030. Rapid integration of ADAS features in vehicles, and increasing adoption of connected car services, paired with rising deployment of ECUs and domain controllers in vehicles are anticipated to increase the demand for automotive software all over the world.

Driver: Advancements in infotainment systems

There is strong competition among automotive manufacturers to deploy cutting-edge infotainment systems for their upcoming vehicle models. For example, Mitsubishi Motors Corporation (Japan), Nissan Motor Co., Ltd. (Japan), and Renault (France) have adopted Google’s Android operating system for their next-generation infotainment systems. In November 2022, Hyundai Motor (South Korea) also selected NVIDIA drive infotainment and AI platform for all future Hyundai, Kia, and Genesis models.

The changing consumer preference pertaining to wireless technology, along with the steady increase in demand for seamless connectivity of phones with passenger cars, is expected to drive the in-vehicle infotainment segment. This, in turn, will increase the demand for in-vehicle infotainment systems, thereby supporting the revenue growth of the automotive software market during the forecast period. As such, automotive software (operating systems such as Android, Linux, and QNX) are integral parts of the in-vehicle infotainment systems.

Opportunity:Developments in semi-autonomous and autonomous vehicles

Autonomous vehicles have become a decisive focal point for automotive stakeholders. They have invested billions of dollars and best resources into completing the task of making autonomous vehicles a reality. Currently, vehicles are equipped with various electronic components to sense their environment and exchange signals with external entities. Behind the whole communication process, a vast amount of data is generated for implementing machine learning with algorithms in the vehicle’s computer system. This would help OEMs, automotive Tier I suppliers, and non-automotive players to make autonomous vehicles a reality. Hence, reliable automotive software is the key to implementing AI and developing semi-autonomous and autonomous cars.

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Application software segment is expected to be the largest in automotive software market during the forecast period

Application software is expected to have significant growth opportunities in the market during the forecast period. This is attributed to the increasing sales of ADAS-equipped vehicles and the rising demand for connected technologies. Companies such as Honda Motor Co., Ltd. (Japan), Toyota Motor Corporation (Japan), Mahindra & Mahindra Limited (India), BYD (China), and MG Motor (UK), among others, offer ADAS features such as adaptive cruise control, lane keeping assist, lane departure warning, auto emergency braking, traffic sign recognition, blind spot detection, and rear collision warning. These features require application software to work effectively in a real-time environment. For example, in India, automotive OEMs such as Mahindra & Mahindra Limited and Morris Garages offer ADAS features such as adaptive cruise control with stop and go, lane keep assist, and traffic sign recognition.

Operating system segment is expected to have significant share in the global automotive software market

 

The operating system is expected to be a noticeable segment in the automotive software market, as it controls the core capabilities of the vehicle while keeping passengers and the driving environment safe, which makes it the most important part of the software. Additionally, the automotive operating system market is expected to grow significantly with the growing adoption of connected car technologies. As such, operating system (OS) plays a critical role in connected vehicles. The OS provides the platform for the telematics system to run on and provides the features and functionality that allow the vehicle to communicate with other devices and services.

The Asia pacific automotive software market is projected to hold the largest share by 2030.

Asia Pacific is projected to be the largest market by 2030. Countries such as China, Japan, and South Korea are expected to take the lead in autonomous driving technology in the coming years. Leading automotive manufacturers in this region, including Honda Motor Co., Ltd. (Japan), Toyota Motor Corporation (Japan), and Hyundai Motor Company (South Korea), leverage the advantages of safety systems and have made essential safety features a standard across their models. Toyota Motor Corporation (Japan) designed its Toyota Safety Sense ADAS package, which comprises a pre-collision system with pedestrian detection, dynamic radar cruise control, lane departure alert, automatic high beam, lane tracing assist, and road sign assist. This will increase the demand for passenger vehicles in the region with advanced safety features by end users,  boosting the market for automotive software as these features require automotive software for efficient functioning.

Key Market Players

The global automotive software market is dominated by major players such as Robert Bosch GmbH (Germany), BlackBerry Limited (Canada), Continental AG (Germany), NXP Semiconductors (Netherlands), and NVIDIA Corporation (US), among others.

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