Analysis of Automotive Software Market Covering 30+ Countries Including Analysis of US, Canada, UK, Germany, France, Nordics, GCC countries, Japan, Korea and many more
The global automotive software market is forecasted to surge ahead at a CAGR of 12.5% and reach a valuation of US$ 65 billion by the end of 2033, up from US$ 20 billion in 2023.
Automotive software consists of a series of programmable data instructions in the vehicle that aids in the improvement of safety, performance, and driving experience. It makes use of advanced driver assistance systems (ADAS) to improve telematics, body control, convenience, and communication.
Automotive software is also used to arrange appointments, take reservations, and examine automobiles digitally. The program is currently commercially available in a variety of product types, including application software, operating systems, and middleware.
In the past few years, the automotive industry has seen significant advancements in self-driving car technology, with advanced driver assistance systems (ADAS) being one of the critical parts of the technology.
Furthermore, in response to increasing demand for sophisticated safety features like autonomous emergency braking systems, adaptive cruise control, and increased government regulations to reduce road accidents, big automotive OEMs are incorporating ADAS functionalities into their next-generation vehicles.
With capabilities such as emergency braking, lane monitoring, stability controls, and others that are essentially software-driven, ADAS technologies have considerably decreased the complexities of driving.
As a result of the introduction of ADAS features in next-generation vehicles, several Tier 1 firms and OEMs are forming alliances with software development suppliers to create advanced ADAS software. As a consequence, the global market is experiencing significant growth.
As predictive capabilities become more prevalent in vehicles and the driving experience gets more personalized, AI and 5G will play a crucial part in the future of the automotive industry. Automakers are increasingly employing data-driven algorithms to automate vehicle settings such as infotainment systems and application preferences. Furthermore, 5G is better suited for vital communications for increased vehicle-to-vehicle (V2V) connectivity, safer driving, and connected mobility solutions.
Working with automotive software generates massive amounts of data, which has contributed to the rise of AI in the automotive sector. Speech and gesture recognition, eye tracking, upgraded HMI, driver monitoring, virtual assistance, radar-based detection units, and engine control units all use artificial intelligence in automotive software.
Deep learning is expected to expand rapidly in the automotive industry compared to other technologies, propelling the growth of the automotive software market.
Automotive Software Market Size in 2023
US$ 20 Billion
Projected Market Value (2033)
US$ 65 Billion
Global Market Growth Rate (2023 to 2033)
Asia Pacific Market Share (2022)
Leading Application Segment
Key Companies Profiled
“Rapidly Increasing Number of Connected Cars”
The burgeoning number of connected cars has provided attractive opportunities for ecosystem participants. Some non-automotive companies have joined the competition of autonomous driving and connected cars to seize financial prospects. Vehicles are no more entirely hardware-centered moving machines. They now represent approximately 30% of electronic material, with this number predicted to climb to over 50% in the next decades.
The bulk of electronic material for sophisticated automotive applications like engine management systems, telematics, and ADAS will be made up of consolidated ECUs, domain controllers, AI, and HMI. These apps must be developed with several lines of code to function effectively. The intricacy of these applications is rising as cars become more technologically advanced.
Consequently, systems must be constructed with extra codes, raising the demand for embedded software. Thus, the expanding number of connected vehicles is promoting the use of automotive software.
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“Dearth of Connected Infrastructure in Most Regions”
The costly infrastructure needed for 5G and wireless connectivity can have a negative impact on worldwide market growth. The required software interaction platforms, including data analytics, IoT, and the cloud, can cost a large amount of money to develop. Moreover, to include new content, ADAS systems and connected cars require quick, flexible, and accessible software updating mechanisms.
Furthermore, the challenge has grown as the updates need fast internet access, which emerging economies are still striving to develop.
“High Manufacturing of Vehicles in These Countries”
Asia Pacific is leading the global market for automotive software. Asia Pacific held 36.7% of the worldwide market in 2022. The region's key automotive manufacturers, as well as software providers and system integrators, are committed to creating and inventing innovative software solutions to support dependable, safe, and performance-oriented automotive applications.
South Korea and Japan are witnessing a rising demand for automotive software due to the increasing manufacturing of vehicles in these countries.
“Increasing Number of Self-driving Cars across the Country”
North America is experiencing growth in the global market due to the presence of prominent market players, as well as strong research and development initiatives.
The United States is a dominant market in North America. The country has been a pioneer in the field of autonomous vehicles due to aspects such as the presence of renowned automotive firms in the country and being the home of the world's major technology giants such as Microsoft, Google, and others.
Self-driving cars have been tested and used in Texas, California, Washington, Arizona, Michigan, and other places in the United States. In the past two years, the country has dramatically increased the number of releases of autonomous car models.
“Strong Usage of Software-based Technologies”
Europe is contributing significantly to the worldwide market. Germany and the United Kingdom are major markets for automotive software in Europe. One of the factors fueling the market growth in these countries is the growing usage of software-based technologies such as telematics, in-vehicle infotainment, and ADAS.
The booming automobile industry, technological breakthroughs, and government laws aimed at improving the driving experience are all adding to the market expansion in Germany and the United Kingdom.
Government regulations concerning driver safety and security compel manufacturers to provide in-vehicle infotainment with hands-free connected calls, fueling the market's growth.
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“Growing Customers' Interest in Safety Applications”
Due to the growing use of a few ADAS technologies as standard features, even in mid-size vehicles, the use of automotive software for safety & security purposes is projected to grow significantly during the projection period. Increasing customers' interest in safety applications that assist drivers in staying safe and reducing accidents is expected to generate demand for advanced driver assistance systems (ADAS).
The Federal Motor Vehicle Safety Standards (FMVSS) is a collection of US rules describing all automobiles' safety requirements. Whereas the EU's regulations are primarily based on UN research and recommendations, the FMVSS was developed in collaboration with US regulatory agencies.
The United States and the European Union are developing rules to ensure that all automobiles have emergency braking and forward-collision alert systems. For meeting regulatory criteria, FWVSS requires three domains of testing: collision avoidance, crashworthiness, and post-crash survivability.
Such vehicle safety and security feature launches are projected to fuel demand for dependable software solutions, bolstering the market growth.
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.
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The global automotive software market amounted to US$ 20 billion in 2023.
Global demand for automotive software is estimated to surge at a CAGR of 12.5% from 2023 to 2033.
The market for automotive software is predicted to hit US$ 65 billion by 2033.
Asia Pacific captured 36.7% share of the global market in 2022.
Apple, Inc, Airbiquity, Inc, Accenture PLC, Amazon Web Services, Inc, Adobe Inc, Akamai Technologies, Inc, Access Co., Ltd, and ANSYS, Inc are key players in the global market.
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