A connected car is a car with internet access and sometimes, it is equipped with a wireless LAN (local area network) as well. Therefore, Connected Cars and vehicles provide connectivity while travelling, along with comfort and safety and security. A connected car allows the driver to connect with online platforms and communicate and share data with other devices and vehicles. This ensures real-time communication.
The global Connected Cars market is expected to grow at a high CAGR in the coming years. The market is projected to register a CAGR of 17.1% during 2018 to 2025 and reach a value of USD 225.16 billion by the end of 2025, from USD 63 billion in 2017. The market for Connected Cars will be mainly driven by factors like rising demand for connectivity solutions by consumers and increasing deployment of advanced automatic electronics in vehicles.
Automatic electronics installed in vehicles help increase road safety and enhance the in-car experience of users. This is one of the most important factors to increase the demand for Connected Cars. With the increasing demand for connectivity solutions, car manufacturers and service providers have developed various connectivity solutions like M2M connectivity platform.
Such connectivity solutions provide real-time information, and this is the reason why the demand for them and consequently, the demand for Connected Cars has been increasing across the globe. The global Connected Cars market will also be positively affected by the incorporation of advanced diagnostic systems. By supplying data related to the vehicle to customers and automobile dealers, advanced diagnostic systems can help predict a problem before its actual occurrence.
Apart from these, the rising demand for safety and security will also boost the global Connected Cars market, as safety features of Connected Cars such as Driver Assistance System help enhance safety and security and the overall driving experience. This will further increase the demand for Connected Cars and thereby, propel the Connected Cars market.
However, the high cost of hardware and lack of seamless connectivity can limit the growth of the market to some extent. Unauthorized access to multiple car connectivity solutions can make Connected Cars vulnerable to hacking and this too can restrain the growth of the market. However, the integration of intelligent transportation system in Connected Cars is likely to provide lucrative growth opportunities in the near future.
The North American connected car market is expected to dominate the global market in the coming years by holding the largest market share. The region has always been an early adopter of the latest technology. The US was the first country to adopt Connected Cars and M2M technology in Connected Cars. The demand for Connected Cars has been increasing in North America, which will drive the North American market in the coming days.
However, owing to changes in government regulations regarding safety, the Asia-Pacific region is expected to record the highest CAGR in the future. The presence of leading global automotive players and an increase in the production of passenger cars in the region will fuel the growth of the Asia-Pacific Connected Cars market.
The key players operating in the global Connected Cars market include Audi AG, Mercedes-Benz, Ford Motor Company, BMW AG, AT&T Intellectual Property, Verizon wireless, TomTom International BV., Vodafone Group, and HARMAN International.