Automotive Software Market is Tremendously Growing at a CAGR of 12.5% By 2033

Automotive Software Market

By the end of 2033, the worldwide automotive software industry is anticipated to reach US$ 65 billion, growing quickly between 2023 and 2033 at a 12.5% CAGR.

Automotive software is a collection of programmable instructions used to carry out a variety of tasks for in-vehicle computer applications. Systems that are embedded in vehicles use this software. Applications involving body control, entertainment, telematics, advanced driving assistance systems (ADAS), safety, and communication, among others, require automotive software.

Some of the key factors propelling the market growth include the swift expansion of the automotive industry and the ongoing introduction of autonomous and semi-autonomous vehicles. Additionally, the market is expanding because of the broad adoption of ADAS as the key element of self-driving technology and the rising demand for various advanced safety features like adaptive cruise control and autonomous emergency braking systems.

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The use of vehicle software is being encouraged by numerous initiatives made by regulatory bodies in various countries to lower traffic accidents and guarantee road safety. The adoption of the Internet of Things (IoT), artificial intelligence (AI), and cloud-based solutions for managing devices and ensuring security are further factors impacting market progress.

The expansion of smart capabilities in a number of car entertainment systems is also raising demand for automotive software and fueling the global industry.

Key Takeaways from Market Study

  • In 2023, the market for automotive software will be worth $20 billion.
  • From 2023 to 2033, the need for automotive software is anticipated to grow rapidly at a CAGR of 12.5%.
  • By 2033, it is expected that the global market will be worth US$65 billion.
  • In 2022, Asia Pacific accounted for 36.7% of the global market.

Winning Strategy

Leading market players are focusing on collaborations to gain more market share and presence.

  • VW Group collaborated with Microsoft to advance the development of automated driving in February 2022. VW Group’s Car Software Division and Microsoft collaborated to create an Automated Driving Platform that will allow for the rapid development of autonomous driving functions. Car Software Division will use the cloud-based platform to streamline its development processes on Microsoft Azure to provide automated driving solutions.
  • Microsoft and Bosch collaborated in February 2021 to create a software-defined vehicle platform for smooth interaction between cars and the cloud. The collaboration will shape the next generation of automotive software by combining automotive and cloud computing capabilities.

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In recent years, the automotive industry has experienced a remarkable transformation, largely driven by the integration of advanced software solutions. This shift has given rise to the Automotive Software Market, a dynamic sector that is reshaping the future of transportation. With the advent of electric vehicles, autonomous driving technology, and enhanced connectivity, automotive software has become instrumental in driving innovation, safety, and convenience within the automotive sector. This blog explores the intricacies of the Automotive Software Market, shedding light on its key segments, prominent players, growth catalysts, and the exciting prospects it holds.

The Automotive Software Market encompasses a broad spectrum of software applications that are seamlessly integrated into vehicles, enriching their functionality, safety, and user experience. These software components are increasingly pivotal as vehicles evolve into smart, connected, and autonomous entities. Notable segments within this market include infotainment systems, advanced driver assistance systems (ADAS), telematics, connected car services, and autonomous driving software. Each of these segments plays a unique role in enhancing the overall driving experience and advancing the capabilities of modern vehicles.

Competitive Landscape

Key players in the automotive software market are pursuing tactics such as collaborations, investments, new developments, R&D activities, and mergers to grow and strengthen their global footprint. Furthermore, numerous start-ups are raising funds to work on innovative solutions and gain market share.

  • Eatron, a start-up based in the United States that creates ‘intelligent automotive software’, received a US$ 11 million Series A funding round spearheaded by the United Kingdom’s MMC Ventures.
  • NXP Semiconductors introduced the S32G GoldVIP in February 2022 to meet software-defined vehicles’ real-time and application development difficulties. This vehicle integration platform provides a variety of value propositions for S32G processor evaluation, software development, and rapid prototyping.
  • APTIV and Audi invested US$ 285 million in the automotive software business TTTech Auto in February 2022. Aptiv invested US$ 228 million in this fundraiser, while Audi plans to boost its existing investment by US$ 57 million.
  • Woven Planet Holdings, a division of Toyota Motor Corp., absorbed Renovo Motors in September 2021 to improve software development for driverless vehicles.
  • Volvo unveiled plans in July 2021 to revamp its infotainment and data systems with a new in-house built operating system, VolvoCars.OS that will be installed in future cars.

Key Companies Profiled

  • Apple, Inc
  • Airbiquity, Inc
  • Accenture PLC
  • Amazon Web Services, Inc
  • Adobe Inc
  • Akamai Technologies, Inc
  • Access Co., Ltd
  • ANSYS, Inc

Key players in the Automotive Software Market are shaping the industry’s landscape. Companies like Google, with its Android Automotive OS and partnerships with automakers, Apple with its CarPlay platform and “Project Titan” autonomous vehicle project, Tesla, renowned for its advanced autonomous driving capabilities and over-the-air updates, Waymo, Alphabet’s self-driving subsidiary, and Microsoft, with its Azure cloud platform, are all pivotal figures in driving innovation and progress in automotive software. These companies are at the forefront of developing software solutions that are redefining the driving experience and setting the stage for a future of smarter, safer, and more connected mobility.

Key Segments of Automotive Software Industry Research

  • By Product:
    • Application Software
    • Middleware
    • Operating Systems
  • By Application:
    • Safety Systems
    • Infotainment & Telematics
    • Powertrain
    • Others
  • By Vehicle Type:
    • Passenger Cars
    • Commercial Vehicles
    • Electric Vehicles
  • By Region:
    • North America
    • Latin America
    • Europe
    • Asia Pacific & China
    • Middle East & Africa

Several prominent trends and growth drivers are propelling the Automotive Software Market forward. One crucial factor is the rising expectations of consumers who now demand seamless connectivity, entertainment, and safety features in their vehicles. This consumer-driven demand is compelling automakers to invest significantly in cutting-edge software solutions. Additionally, governments worldwide are imposing stringent regulations related to safety and emissions, prompting automakers to turn to ADAS and autonomous software as viable solutions. The transition to electric vehicles (EVs) has also opened doors for software companies to develop solutions for battery management, charging infrastructure, and energy optimization. Moreover, the vast amounts of data generated by connected vehicles have created opportunities for data monetization and targeted advertising, further driving market growth. Finally, rapid advancements in artificial intelligence (AI), machine learning, and sensor technology are accelerating the development of autonomous and connected vehicle software, promising exciting breakthroughs in the near future.

More Valuable Insights on Offer

Fact.MR, in its new offering, presents an unbiased analysis of the global automotive software market, presenting historical demand data (2018 to 2022) and forecast statistics for the period (2023 to 2033).

The study divulges essential insights on the market based on product (application software, middleware, operating systems), application (safety systems, infotainment & telematics, powertrain, others), and vehicle type (passenger cars, commercial vehicles, electric vehicles), across five major regions of the world (North America, Europe, Asia Pacific, Latin America, and MEA).

Key Questions Covered in the Automotive Software Market Report

  • What will be the estimated size of the Market in 2023?
  • At what rate will the global Automotive Software sales grow until 2033?
  • Which are the factors hampering the Automotive Software demand?
  • Which region will spearhead the growth in the global industry during 2023-2033?
  • Which are the factors driving sales in the Automotive Software Market during the forecast period?

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