Global Connected Cars Market Expected to Grow at a CAGR of approximately 28% by 2022: Hexa Research

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Global connected cars market size was estimated at over USD 24 billion in 2014 and is expected to grow at a CAGR of approximately 28% by 2022

The size of the global connected cars market was estimated at over USD 24 billion in 2014 and is expected to grow at a CAGR of approximately 28% in the forecast period.

Technological proliferation across regions is expected to drive the global market for the next seven years. There have been major advances in telecommunication technology in the past few years. These advances have offered the population with a new level of connectedness. With the development of connected cars concept, infotainment technology and vehicle telematics have progressed to offer navigation tools, varied applications, HD touch screens, as well as high speed internet on-the-go.

The industry is likely to get a major push from the governments across the countries. The U.S. Department of Transportation, in association with the National Highway Traffic Safety Administration, has announced plans for a regulatory proposal that would make it obligatory for automobile manufacturers to install the vehicle-to-vehicle communication devices in every automobile they manufacture in the coming years.

Issues related to safety and security, such as unauthorized access to multiple automobile applications, can be a restraint for the connected cars market. In addition, unavailability of seamless internet connectivity across areas or regions may create a challenge to connected cars market growth.

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Application Overview

Driver assistance includes a lot of advanced technologies that help enhance the actual vehicle performance. Systems, such as parking assists and cruise control, that autonomously steer the vehicle, are being introduced across all cars segments ensuring driver convenience and comfort.

Mobility management involves systems that allow drivers to reach their destination safely in the least possible time, at reasonable cost as well as with optimal fuel consumption.

Safety technologies include external threat warning for drivers regarding severe road and weather conditions along with the vehicle’s internal autonomous collision protection & emergency functions. The Safety Systems segment accounted for over 35% of the revenue share in the year 2014 and is expected for growth owing to increasing government and transport authority mandates across the globe in the coming years.

Entertainment has been a basic need in almost all vehicles since its introduction. Automobile manufacturers are increasingly installing various features such as Smartphone interfaces, Internet and social media access, along with all advanced mobile office platforms.

Vehicle management systems execute a number of functions that allow automobile owners to reduce running costs and increase ease of maintenance and use, such as keyless ignition and unlocking, onboard details about vehicle conditions and service scheduling & updates etc.

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Regional Overview

Presence of major technology providers and automobile manufacturers has led North America to dominate the industry. With the entry of technological giants, such as Google Inc., into the autonomous and connected cars sector, automobile manufacturers are enforced to come up with innovative cultural changes and capabilities, in order to compete with them.

Asia-Pacific connected cars market accounted for over 23% of the global share in 2014 and is expected to grow at a CAGR of approximately 29% from 2015 to 2022. Increasing use of high-speed internet services, Smartphone penetration, and declining average selling price in the region are expected to drive the sales for such smart vehicles.

Increasing government regulations across the world are projected to positively impact the global connected cars market. Mandates such as the Stolen Vehicle Tracker (SVT) in Brazil, GLONASS in Russia, and the eCall System in the European Union, require the installation of superior telematics systems, for safety purposes, in all new vehicles in the European Union from 2015 and in other countries from 2016.

Competitive Market Share Overview

Apple Inc., Google Inc., Alcatel Lucent, Audi AG, BMW, AT&T Inc., General Motors Company, and Ford Motor are some of the major manufacturers. This highly competitive industry is driven by product and technological innovations.

New technologies in driver assistance systems, such as Volkswagen’s Emergency Assist which stops the vehicle in case of an emergency and BMW’s autonomous parking valet that automatically parks the cars, are likely to provide these manufactures a competitive advantage over many other industry players.

Technology licensing and backward integration are expected to be commonly accepted strategies by industry players. With the high production capabilities, it becomes profitable and easier for the manufacturers to execute backward integration and create their own connected vehicle applications and devices.

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