Asia-Pacific Connected Cars Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
The Asia-Pacific Connected Cars Market was valued at USD 38.8 Billion in 2021 and is expected to reach USD 102.61 Billion by 2027, registering a CAGR of 17.6% during the forecast period, 2022-2027.
The Asia-Pacific Connected Cars Market was impacted very negatively by the COVID-19 pandemic since that pandemic originated in Wuhan, China. The market plunged due to government-imposed manufacturing shutdowns, lockdowns, and trade restrictions during the COVID-19 pandemic.
Furthermore, the fall in automotive production, significant drop in automobile sales due to travel restrictions and social distancing norms as well as work-from-home policies and lack of labor significantly impacted the market. Since automotive manufacturers have resumed operations due to steadily rising automobile sales in countries with a limited number of COVID-19 cases, the market is likely to recover during the forecast market. Furthermore, the manufacturers are implementing contingency plans to mitigate future business uncertainties to retain continuity with clients in the critical sectors of the automobile industry.
Over the long term, increasing investments in R&D by major industry players, preference by new by young car buyers for connectivity features , rise in adoption of smart phones, a increase in sales of electric and autonomous vehicles as well as rising internet connectivity and falling data prices are creating demand in the automotive and transportation industry with a surge in sales of connected cars.
Key players in the market are expanding their investments and entering into tieups with telecom companies to cater to the increased demand for connected cars. For instance, In August 2022, SAIC Motor and OPPO entered into a joint venture to create a software platform for cross integration between cars and smartphones. In March 2022, Chinese state owned SAIC Motor announced to invest USD 43 billion into advanced automotive technologies including connected automotive solutions over the next five years.
The largest market is Asia-Pacific because of the preference of connectivity features over the mechanical specifications of the vehicles, falling data costs, rising internet penetration, advent of 5G and proliferation of low cost smart devices. Europe and North America are the expected to stand as next emerging markets in the region.
Key Market TrendsTackling Road Safety with Evolving Connected Features by Integrating SmartphonesSince smartphone use has risen, the usage of smartphones for the same purposes in their cars has also increased. Car manufacturers are opting for modular hardware design, which is built into the car and works with smartphone software. Access to smartphones makes it extremely easy and accessible to the user for using the vehicle's connectivity features. Moreover, it helps extract large quantities of data for car manufacturers and the government to improve the performance of the connected vehicles and their surroundings. For instance, In July 2022, the recently launched Toyota UC Hyryder SUV in India supports both wireless AppleCarPlay and Android Auto as well as smartwatch connectivity.
The modern connected cars offer more than just a group of systems that function independently, instead, it integrates independent entities to facilitate networks, communications, data storage, and band frequencies with 4G and 5G connectivity between the connected vehicle and its surrounding. For instance, In June 2019, MG Hector SUV sold in India features i-SMART connected technology which offers 5G support through Machine to Machine (M2M) embedded SIM. For instance, construction workers can be informed, in case there is an approaching vehicle at the site of construction. Traffic police can identify over speeding cars, which could then lead to accidents. Also, driving patterns can help determine if the driver is intoxicated. All this becomes accessibly convenient for smartphone users, which will further improve the penetration of connected systems-built cars.
Most of the young car buyers in the region prefer connected vehciels due to the convinience offered by the connected vehicle technologies.A nother factor responsible for the growth of connected vehicles in the region is the extensive use of telematics and IoT by the fleet owners tomonitor their fleets remotely for the purpose of performance, efficiency , driver behavior, safety and predictive maintenence.
By technology type navigation is the dominant segment due to the extensive use of GPS systems by the drivers who use it for route finding and route planning services in the congested cities like Shanghai, Tokyo, Mumbai, Jakarta, Bangkok and Seoul to avoid traffic jams and get to their destinations quickly. For instance, in 2021 80% of the passenger vehicles sold in China were equipped with navigation systems. Thus many car manufacturers are launching new models with built in connectivity features to tap on the incremental growth opprtunities in the market. For instance,
China is the largest market followed by India and South Korea. Owing to the increase in the connectivity features in the latest car models, China will lead the connected vehicle market in the Asia Pacific. As the domestic market of China is growing, it will shape the future related car industry with increasing technological advantages in ICT, data processing and platform services, secure industrial investment, and a very dedicated industrial strategy and support from the central government. China's powerful planning agency, the National Development and Reform Commission, expects one in every two new cars sold to be equipped with smart autonomous functions by 2021.
In developing countries like India, the growth of infrastructures of communication and information technology like 5G or 4G LTE will push the demand for connected cars. Also, favorable government policies will increase the growth market owing to the rise in the safety regulations for security & protection and authorization.
Nowadays, companies such as MG Motor India and Tata Motors Ltd. are collaborating with for equipping connecting-car technology and offer additional features in the context of control, convenience, safety and security, and social sharing. As a result, automobiles are to see carmakers offer more connected technology in their vehicles. For instance,
South Korea and Japan are also major markets for connected vehicles in Asia Pacific due towidespread internet connectivity, high awareness about connected technologies in carbuyers and greater demand for convinience features in cars . Thus with companies coming up with new innovations and entering into tie ups with telecom and tecnology companies the market for connected cars in Asia-Pacific is expected to grow over the forecast period.
Competitive LandscapeThe Asia Pacific Connected cars Market is highly fragmented. The market is characterized by the presence of considerably large players as well as new technology startups. These players also engage in joint ventures, mergers and acquisitions, new product launches, and product development to expand their brand portfolios and cement their market positions.
Some of the major players dominating the global market are SAIC Motor, Hyundai Motor Group, NVIDIA Corp., Harman International, and TomTom B.V. Key players are launching new products and expanding their manufacturing facilities to secure their market position and stay ahead of the market curve. For instance,
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