Automotive Software Market Size
| Study Period | 2024 - 2029 |
| Market Size (2024) | USD 10.07 Billion |
| Market Size (2029) | USD 29.30 Billion |
| CAGR (2024 - 2029) | 22.00 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
Major Players.webp "Automotive Software Market Major Players")
*Disclaimer: Major Players sorted in no particular order |
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Automotive Software Market Analysis
The Automotive Software Market size is estimated at USD 10.07 billion in 2024, and is expected to reach USD 29.30 billion by 2029, growing at a CAGR of greater than 22% during the forecast period (2024-2029).
According to the market analysis, factors such as the adoption of ADAS features in vehicles, increasing adoption of connected car services, and intervention of innovative technologies for advanced UI are expected to drive the global market growth. As a result, the growth trajectory of this market is strongly correlated to the deployment of software in various applications such as entertainment and security. Growth in the electric mobility industry in countries like India and China is creating a positive outlook for the market.
According to the International Energy Agency, in Q1 2024, electric car sales grew by around 25% compared to Q1 2023, with China holding the largest share of 45% in electric car sales, followed by Europe with 25%.
The utilization of open-source platforms and the improved product offerings focused on user experience boosted the market growth for automotive software. Consumers and OEMs are increasingly focusing on automobile infotainment systems, and manufacturers are competing primarily on the software or operating system they utilize. Manufacturers emphasize smart capabilities in these infotainment systems and deploy software that will set their products apart from their competitors.
Another major trend in the automotive software market is the emergence of autonomous driving technologies. These technologies use advanced sensors, machine learning algorithms, and real-time data processing to allow vehicles to navigate and make decisions without human input. Industry analysis indicates that this technology is expected to revolutionize the automotive industry and transform how we think about transportation.
Considering the scenario, various manufacturers are focusing on upgrading their technologies for vehicles and on technological advances in the software industry. For example:
- In December 2023, global technology services provider FPT officially launched its automotive technology subsidiary FPT Automotive with a comprehensive suite of engineering services encompassing in-vehicle infotainment, electronic control units (ECU), functional safety, security, automotive UI/UX design, wireless connectivity, and digital engineering.
The automotive software market growth is also driven by the need for more efficient and sustainable transportation systems. Governments worldwide are implementing regulations to reduce emissions and promote electric vehicles. Automotive software plays a key role in helping automakers develop more efficient and eco-friendly vehicles.
Automotive Software Industry Trends
Passenger Cars Hold the Highest Share in the Global Market
Over the long term, the rising demand for automobiles that provide enhanced driving experiences, comfort, and safety may boost the demand for fuel-efficient engines. The growing EV sales are also boosting the sales of passenger cars as various countries promote their adoption through strict regulations, subsidies, tax credits, and other incentives.
According to the International Energy Agency, new electric car registrations in Europe reached nearly 3.2 million in 2023, increasing by almost 20% compared to 2022, with battery electric cars accounting for 70% of the electric car stock in the same year.
Governments worldwide have been proactive in enacting policies to encourage the adoption of electric vehicles. China, India, France, and the United Kingdom announced plans to completely phase out petrol and diesel vehicles before 2040.
Similarly, vehicles registered in Europe until December 31, 2025, are exempted from the ownership tax for 10 years, and this exemption is valid until December 31, 2030. According to the European Commission, such policies are expected to boost the market growth of passenger electric cars.
Automotive software is significantly used in passenger cars to handle and analyze data supplied by sensors and communication devices. Automotive software is important to the seamless and effective operation of the cars.
Automotive software is also employed in developing and maintaining the different features and functionalities found in connected vehicles, such as navigation systems, infotainment systems, and advanced driver assistance systems (ADAS). These characteristics need advanced applications capable of processing huge amounts of information and responding in real time.
Considering the growth of passenger car sales, industry analysis reveals that companies are seeing growth opportunities in the vehicle segment and focusing on various technological advancements to develop new products. For instance:
- In March 2024, Valeo became the new launch partner of the SDVerse Vehicle Software Marketplace. Valeo joined founders GM, Magna, Wipro, and other launch partners to bring software developers and mobility players to introduce software solutions in the automobile industry.
The development of connected car technology is boosting the need for software that can handle and analyze data generated by connected cars. It is also opening up new opportunities for software developers to produce cutting-edge services and apps.
North America Captured a Major Market Share
North America is a significant market for automotive software. Countries such as the United States are home to several major automakers and technology companies that are developing advanced technologies for the automotive industry. One of the key drivers of the automotive software market in North America is the increasing demand for advanced driver assistance systems (ADAS) and autonomous vehicles.
The growth of EV sales in the country also contributes to the market’s growth. According to the International Energy Agency, new electric car registrations in the United States totaled 1.4 million in 2023, increasing by more than 40% compared to 2022.
The North American market is also driven by the growing adoption of electric vehicles, with major automakers such as General Motors, Ford, and Tesla investing heavily in developing EV platforms and related software. This trend has led to a growing demand for software to manage and optimize battery life and develop charging infrastructure.
Another key trend in the North American market is the growing demand for connected cars with internet connectivity and various software applications. This trend has led to software development for in-car infotainment systems, navigation systems, and other connected car services.
In addition to these industry trends, North America is home to several leading technology companies, such as Apple, Google, and Intel, which are developing technologies for the automotive industry. These companies are focused on developing software for autonomous driving, artificial intelligence, and other cutting-edge technologies that are expected to drive the future of the automotive industry. For example:
- In March 2024, General Motors partnered with auto supplier Magna and consultancy firm Wipro Limited to launch a virtual marketplace called SDVerse for buyers and sellers of automotive software.
Thus, such developments are expected to contribute to the market’s growth in the coming years.
Automotive Software Industry Overview
The automotive software market is consolidated and led by global and regionally established players. These companies adopt strategies such as new product launches, collaborations, and mergers to sustain their market positions. For instance:
- In April 2024, the BMW Group and Tata Technologies announced the signing of an agreement to form a joint venture (JV) to establish automotive software and IT development hubs in Pune, Bengaluru, and Chennai, India.
Some of the major players in the global market include BlackBerry Limited, KPIT Technologies Limited, Microsoft Corporation, Google, and Airbiquity Inc.
Automotive Software Market Leaders
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Microsoft Corporation
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BlackBerry Limited
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Google (Alphabet Inc.)
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KPIT Technologies Limited
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Airbiquity Inc.
*Disclaimer: Major Players sorted in no particular order
Automotive Software Market News
- March 2024: Wipro Limited partnered with General Motors (GM) and global automotive supplier Magna to develop a B2B sales platform for buying and selling automotive software. The SDVerse platform aims to revolutionize the automotive software sourcing and procurement process by providing a matchmaking platform.
- April 2024: HARMAN announced that Tata Motors, India’s leading automobile manufacturer, selected the HARMAN Ignite Store as its in-vehicle app store, bringing easily accessible, reliable, and safe mobility experiences to more customers across a new geographical region.
Automotive Software Industry Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
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4.1 Market Drivers
- 4.1.1 Increasing Investments by Automobile Manufacturers for Electric Vehicles
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4.2 Market Challenges
- 4.2.1 Lack of Standard Protocols for Developing Software Platforms
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4.3 Industry Attractiveness - Porter's Five Forces Analysis
- 4.3.1 Threat of New Entrants
- 4.3.2 Bargaining Power of Buyers/Consumers
- 4.3.3 Bargaining Power of Suppliers
- 4.3.4 Threat of Substitute Products
- 4.3.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION (Market Size in Value (USD))
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5.1 By Application
- 5.1.1 Safety and Security
- 5.1.2 Infotainment and Instrument Cluster
- 5.1.3 Vehicle Connectivity
- 5.1.4 Other Applications (Powertrain)
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5.2 By Vehicle Type
- 5.2.1 Passenger Cars
- 5.2.2 Commercial Vehicles
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5.3 By Geography
- 5.3.1 North America
- 5.3.1.1 United States
- 5.3.1.2 Canada
- 5.3.1.3 Rest of North America
- 5.3.2 Europe
- 5.3.2.1 Germany
- 5.3.2.2 United Kingdom
- 5.3.2.3 France
- 5.3.2.4 Italy
- 5.3.2.5 Rest of Europe
- 5.3.3 Asia-Pacific
- 5.3.3.1 China
- 5.3.3.2 Japan
- 5.3.3.3 India
- 5.3.3.4 South Korea
- 5.3.3.5 Rest of Asia-Pacific
- 5.3.4 Rest of the World
- 5.3.4.1 South America
- 5.3.4.2 Middle East and Africa
6. COMPETITIVE LANDSCAPE
- 6.1 Vendor Market Share
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6.2 Company Profiles *
- 6.2.1 BlackBerry Limited
- 6.2.2 KPIT Technologies Limited
- 6.2.3 Google (Alphabet Inc.)
- 6.2.4 Airbiquity Inc.
- 6.2.5 Wind River Systems
- 6.2.6 Microsoft Corporation
- 6.2.7 MontaVista Software LLC
- 6.2.8 Robert Bosch GmbH
- 6.2.9 Intellias Ltd
- 6.2.10 HARMAN International
- 6.2.11 GlobalLogic Inc.
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
** Subject To AvailablityAutomotive Software Industry Segmentation
Automotive software refers to the computer programs, applications, and systems used in designing, manufacturing, operating, and maintaining automobiles, including the software used in developing and operating vehicle components and systems.
The automotive software market is segmented by application, vehicle type, and geography. By application type, the market is segmented by safety and security, infotainment and instrument cluster, vehicle connectivity, and other applications (powertrain). By vehicle type, the market is segmented by passenger cars and commercial vehicles. By geography, the market is segmented by North America, Europe, Asia-Pacific, and Rest of the World. The report offers market forecast and size in value (USD) for all the above-mentioned segments.
| By Application | Safety and Security | |
| Infotainment and Instrument Cluster | ||
| Vehicle Connectivity | ||
| Other Applications (Powertrain) | ||
| By Vehicle Type | Passenger Cars | |
| Commercial Vehicles | ||
| By Geography | North America | United States |
| Canada | ||
| Rest of North America | ||
| By Geography | Europe | Germany |
| United Kingdom | ||
| France | ||
| Italy | ||
| Rest of Europe | ||
| By Geography | Asia-Pacific | China |
| Japan | ||
| India | ||
| South Korea | ||
| Rest of Asia-Pacific | ||
| By Geography | Rest of the World | South America |
| Middle East and Africa |
Automotive Software Market Research FAQs
How big is the Automotive Software Market?
The Automotive Software Market size is expected to reach USD 10.07 billion in 2024 and grow at a CAGR of 22% to reach USD 29.30 billion by 2029.
What is the current Automotive Software Market size?
In 2024, the Automotive Software Market size is expected to reach USD 10.07 billion.
Who are the key players in Automotive Software Market?
Microsoft Corporation, BlackBerry Limited, Google (Alphabet Inc.), KPIT Technologies Limited and Airbiquity Inc. are the major companies operating in the Automotive Software Market.
Which is the fastest growing region in Automotive Software Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Automotive Software Market?
In 2024, the North America accounts for the largest market share in Automotive Software Market.
What years does this Automotive Software Market cover, and what was the market size in 2023?
In 2023, the Automotive Software Market size was estimated at USD 7.85 billion. The report covers the Automotive Software Market historical market size for years: . The report also forecasts the Automotive Software Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
What are the key drivers of the Automotive Software Market?
Key factors driving the Automotive Software Market are: a) Increasing demand for connected vehicles b) Advancements in autonomous driving technologies c) Stringent government regulations for vehicle safety
Automotive Software Industry Report
The Global Automotive Software Market is on a significant upswing, fueled by the growing integration of advanced driver assistance systems (ADAS) and a surge in demand for connected car services. This growth is further propelled by the adoption of infotainment systems and connected technologies, enhancing vehicle user experience. Automotive software companies are at the forefront, capitalizing on the development of semi-autonomous and autonomous vehicles that heavily depend on sophisticated software for operation and safety. Despite facing challenges like complex vehicle architecture and the absence of standardized software development protocols, the market is set for substantial growth. Key opportunities lie in ADAS & safety systems, application software, and body control & comfort systems, with Asia-Pacific leading in terms of market share, driven by advancements in autonomous driving technology. The importance of software in the automotive industry is increasingly recognized, with automotive software companies playing a crucial role in vehicle technology and connectivity evolution. For detailed insights, Mordor Intelligence™ Industry Report offer a comprehensive industry analysis, including market share, size, revenue growth rate, and a forecast outlook, available as a free report PDF download.
