Automotive Software Market Size, Share & Trends Analysis Report By Application (ADAS & Safety, Navigation), By Vehicle Type (Passenger Cars, Commercial Vehicle), By Product Type, By Propulsion Type, By Region, And Segment Forecasts, 2023 - 2030

Automotive Software Market Size & Trends

The global automotive software market size was estimated at USD 23.86 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 14.1% from 2023 to 2030. Automotive software refers to a set of programmable instructions designed for computer-based in-vehicle applications. These applications are essential to the embedded systems of vehicles and encompass functions like body control, infotainment, telematics, comfort, safety features, Advanced Driver Assistance Systems (ADAS), and communication applications. The rising demand for car-to-car communication is expected to drive the global automotive software industry over the forecast period.

Automobile manufacturers are continuously focusing on integrating automotive software in vehicles to enhance customer convenience and utility. The increasing popularity of autonomous vehicles has emerged as a significant driver for automotive software, as it promotes the integration required to connect the entire vehicle to a unified system accountable for managing vehicle operations and balance. Additionally, the increased use of the ADAS is also expected to contribute to the growth of the market over the forecast period. The advent of 5G technology is another significant development in the automotive software industry. The increasing need for high-speed network connectivity to deliver maximum benefits to end-users has opened up substantial opportunities for the market.

Moreover, the advanced wireless connectivity options provided by automotive software have significantly enhanced the user experience, presenting a notable growth opportunity for the automotive software sector. For instance, in September 2023, Valeo, a renowned French global automotive supplier, introduced ‘anSWer’, a new offering that includes software as a product and a service. Drawing upon Valeo's well-established proficiency in areas such as ADAS, intelligent lighting, electric powertrain, and thermal management, the company's offering encompasses a range of applications intended for use by all participants in the mobility sector.

Application Insights

Based on application, the ADAS & safety segment led the market in 2022, accounting for over 20% share of the global revenue. There is a growing focus on safety in the automotive industry, with customers and regulators moving for safer vehicles. ADAS technologies play a vital role in improving vehicle safety with features like lane-keeping assistance, adaptive cruise control, and collision avoidance. Additionally, customers are increasingly seeking autonomous vehicles with advanced safety features such as ADAS technologies, which are instrumental in reducing the number of accidents and improving road safety.

The connectivity segment is estimated to grow significantly over the forecast period. Connectivity has become an extensive feature across various electronic devices, including automobiles. These services enable automotive dealers, fleet operators, and drivers to enhance resource utilization, strengthen safety, automate specific driver functions, and simultaneously gather valuable data related to vehicle performance and road conditions. Connectivity enables vehicles to optimize resource usage, such as fuel, by providing real-time data on traffic conditions and suggesting more efficient routes. It also facilitates predictive maintenance, helping vehicles to remain in optimal working condition.

Vehicle Type Insights

Passenger cars led the market in 2022, accounting for over 78% share of the global revenue. Passenger cars have seen higher adoption of software services compared to commercial vehicles as passenger cars often come equipped with advanced infotainment systems, driver assistance technologies like ADAS, and connected services, making them a significant market for automotive software. Countries where the automotive industry is more mature have a robust demand for highly advanced applications. Customers in these regions increasingly strive for vehicles with features like ADAS, which enhance safety and convenience.

The commercial vehicle industry is subject to many regulations, such as those related to safety, emissions, and driver hours. Software solutions help commercial vehicle operators track and ensure compliance with these regulations, which has become increasingly important in many regions. Furthermore, automotive software assists commercial vehicle operators in reducing fuel consumption, maintenance costs, and downtime. These cost-saving benefits have driven the adoption of software solutions in the commercial vehicle industry.

Propulsion Type Insights

The internal combustion engine (ICE) segment led the global market with the largest revenue share of over 86% in 2022. As the automotive industry is rapidly moving toward electrification and autonomous driving, a significant part of the global vehicle fleet still includes ICE vehicles. These vehicles require software for engine management, emission control, transmission control, and other crucial functions. Furthermore, many developing economies continue to rely heavily on ICE vehicles. This diversity in regional markets contributes to the dominance of the ICE segment.

The electric vehicle (EV) segment is anticipated to witness significant growth during the projection period. Increased awareness regarding environmental issues, notably climate change and air pollution, has led to a shift toward cleaner transportation alternatives. Moreover, ongoing advancements in battery technology have resulted in an increased EV range, faster charging times, and reduced costs. These advancements have made EVs more practical and appealing to a wider range of consumers.

Product Type Insights

The software application segment held the largest revenue share of over 57% in 2022. Software applications play a critical role in enabling vehicle connectivity and telematics services, including remote vehicle diagnostics, real-time traffic information, and software updates. Also, modern vehicles have become highly complex, integrating various Electronic Control Units (ECUs) and sensors. Software applications are essential for managing and coordinating these components, enabling features like infotainment, navigation, engine control, and ADAS.

The operating system (OS) segment is predicted to show significant growth during the forecast period. Automotive OS serves as the foundational software platform for the vehicle's electronic control units and various sub-systems. These operating systems provide the essential framework for coordinating and managing different functions, from powertrain control to infotainment. Modern vehicles require operating systems that can handle safety-critical functions, such as autonomous driving features. These functions demand a high level of reliability and real-time responsiveness, which specialized automotive OS provides.

Regional Insights

North America dominated the market in 2022, accounting for over 32% share of the global revenue. The region has a well-established and robust automotive industry, with a large number of automakers, suppliers, and technology companies. This industry strength drives innovation and the development of software solutions for vehicles. Furthermore, North America is a significant market for EVs and autonomous vehicles. Both of these segments heavily rely on software for powertrain control, battery management, autonomous driving features, and connectivity, which propels the growth of the market in the region.

Asia Pacific is anticipated to register the fastest CAGR over the forecast period. The substantial technological progress witnessed in this region plays a key role in driving the surging demand for automotive software in the region. Furthermore, the growing embrace of technological innovations has further propelled the demand for automotive software solutions. The region has a substantial and growing population, which provides a large customer base for automotive manufacturers and is expected to fuel the growth of the automotive software industry.

Key Companies & Market Share Insights

Prominent players use product launches & development, expansion, merger & acquisition, contracts, and collaborations as their primary business strategy to increase their market share. The companies have used various techniques to enhance market penetration and boost their position in the competitive industry. In October 2023, TTTech Auto AG, a prominent supplier of secure software solutions, unveiled its partnership with Mobileye Technologies Limited, a company developing autonomous driving technologies and advanced driver-assistance systems. This collaboration represents a noteworthy achievement in the search for dependable and secure ADAS and autonomous vehicle (AV) technology. TTTech Auto's software platform and its expertise in integrating OEM-level vehicle systems will play a key role in implementing Mobileye's SuperVision system across specific OEM initiatives.

Automotive Software Market Report Scope

Global Automotive Software Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global automotive software market report based on application, vehicle type, product type, propulsion type, and region:

• Application Outlook (Revenue, USD Billion, 2017 - 2030)

  • ADAS & Safety

  • Infotainment

  • Navigation

  • Autonomous Driving

  • Engine & Transmission

  • Smart Diagnostics & Predictive Maintenance

  • In-car voice Assistance

  • Connectivity

  • Others

• Vehicle Type Outlook (Revenue, USD Billion, 2017 - 2030)

  • Passenger Cars

  • Commercial Vehicle

• Product Type Outlook (Revenue, USD Billion, 2017 - 2030)

  • OS

  • Middleware

  • Software Application

• Propulsion Type Outlook (Revenue, USD Billion, 2017 - 2030)

  • ICE

  • EV

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • UK

    • France

    • Italy

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

  • Latin America

    • Brazil

    • Mexico

  • Middle East and Africa (MEA)

    • Kingdom of Saudi Arabia

    • UAE