Automotive Software Market Projected to reach $40.1 billion in 2027

Automotive Software Market

The global automotive software market size is expected to grow at a CAGR of 13.1% from USD 21.7 billion in 2022 to USD 40.1 billion by 2027. Compliance with fuel efficiency standards, comfort, convenience, and the need for reducing vehicle downtime will drive the market for automotive software.

Market Dynamics:

Drivers: Increasing adoption of connected car services will drive the automotive software market

An increasing number of connected cars has opened new revenue-generating opportunities for the stakeholders in the connected car ecosystem. A lot of non-automotive players have entered the race of connected cars and autonomous driving to leverage the opportunity of earning revenues. Today’s vehicles are no more hardware-based moving machines. Today, they comprise almost40% of electronic content, which is expected to become more than 60% in the next few decades. Most of the electronic content will be dominated by domain controllers, consolidated ECUs, HMI, and AI for advanced vehicle applications like ADAS, telematics, engine management systems, etc. These applications need to be programmed with a vast number of lines of code for proper functioning. As vehicles get technically advanced day by day, the complexity of these applications is increasing. As a result, systems need to be programmed with more codes, which, in turn, increases the need for embedded software. Thus, the increasing number of connected cars is driving the market for automotive software.

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Opportunities: Future potential of 5G and AI will create in the automotive software market

Rapid evolution in design requirements, as well as architectures, are impacting the requirements of the software. The user experience of automotive software depends on wireless connectivity. To find the solution, different telecom company companies are focusing on the development of 5G to increase the safety as well as efficiency of automotive software. automobiles are becoming network-aware, software-defined and ultra-connected data transmitting vehicles and this needs a high-tech connectivity platform. Understanding these implications as well as challenges for the automotive sector can speed up the adoption of connected cars. 5G will be a key enabler for autonomous vehicles as well as automotive software as they will be able to communicate instantaneously. For example, South Korea and the EU have signed a deal for working together on 5G development, both investing USD 1.5 billion and USD 782 million, respectively in funding the local 5G projects. In the United Kingdom, USD 78 million of funding has been approved for 5G research facility 5GIC

Dealing with automotive software results in the generation of humongous data which has led to the expansion of AI in the automotive sector. Artificial intelligence in automotive software for various purposes such as speech as well as gesture recognition, enhanced HMI, eye tracking, driver monitoring, radar-based detection units, virtual assistance, and engine control units. Deep learning used is estimated to be growing at the fastest rate as compared to other technologies in the automotive industry, which, will drive the automotive software market

Key Market Players:

The automotive software market is dominated by a few global players and comprises several regional players. Some of the key players in the automotive software industry are Robert Bosch (Germany), NVIDIA (US), NXP (Netherlands), BlackBerry (Canada), Elektrobit (US), Renesas Electronics (Japan), Airbiquity (US), Wind River Systems (US)and Green Hills Software (US). These companies have strong distribution networks across the globe. Also, these companies broad product portfolio of software solutions for various applications. The major strategies adopted by these major players to retain their market position are new product developments, contracts & agreements, and collaborations.

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