Global Automotive Software Market Segmentation, By Offering (Solutions and Services), Organization Size (Large Scale Organizations, Medium Scale Organization and Small Scale Organization), Software Layer (Operating System, Middleware and Application Software), EV Utility (Charging Management, Battery Management and V2G), Vehicle Type (Passenger Cars, Electric Vehicles, Light Commercial Vehicles and Heavy Duty), End-User (ADAS and Safety Systems, Communication Systems, Infotainment Systems, Body Control and Comfort System, Engine Management and Powertrain, Vehicle Management and Telematics, Autonomous Driving, HMI Application and Others) – Industry Trends and Forecast to 2031
Automotive Software Market Analysis
The automotive software market is seeing significant growth due to advancements in connected and autonomous vehicles, electrification, and advanced driver assistance systems (ADAS). The latest methods include the integration of artificial intelligence (AI) and machine learning, which enable real-time data processing for vehicle-to-everything (V2X) communication and predictive maintenance. The use of automotive over-the-air (OTA) updates is also increasing, allowing manufacturers to update vehicle software remotely, ensuring better performance and security.
Technology advancements such as cloud-based software platforms and embedded software for electric vehicles (EVs) have boosted market expansion. These platforms offer improved vehicle diagnostics, enhanced user experience, and optimized energy management for EVs. In addition, cybersecurity features are becoming more critical with the increasing software complexity.
The demand for autonomous driving and the shift toward electric mobility drive the growth of automotive software. Major automakers are investing heavily in software development, partnering with tech companies to integrate advanced solutions into vehicles. This trend is expected to continue, with the global automotive software market poised to grow rapidly in the coming years.
Automotive Software Market Size
The global automotive software market size was valued at USD 32.45 billion in 2023 and is projected to reach USD 119.53 billion by 2031, with a CAGR of 17.7% during the forecast period of 2024 to 2031. In addition to the market insights such as market value, growth rate, market segments, geographical coverage, market players, and market scenario, the market report curated by the Data Bridge Market Research team includes in-depth expert analysis, import/export analysis, pricing analysis, production consumption analysis, and pestle analysis.
Automotive Software Market Trends
“Rising Demand for Autonomous Driving Systems”
One specific trend driving the growth of the automotive software market is the increasing demand for autonomous driving systems. As automakers and technology companies develop more advanced driver-assistance systems (ADAS), the need for sophisticated software solutions has grown. These systems rely heavily on artificial intelligence (AI) and machine learning algorithms to process vast amounts of data from sensors, cameras, and radar systems. For instance, in April 2024, HARMAN announced that Tata Motors, India’s foremost automobile manufacturer, has chosen the HARMAN Ignite Store as its official in-vehicle app marketplace. This decision aims to provide customers with a seamless, reliable, and safe mobility experience. By offering a range of applications tailored to the needs of users, Tata Motors hopes to expand its market reach and enhance user satisfaction across new geographical regions.
Report Scope and Automotive Software Market Segmentation
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Attributes
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Automotive Software Key Market Insights
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Segments Covered
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Countries Covered
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U.S., Canada and Mexico in North America, Germany, France, U.K., Netherlands, Switzerland, Belgium, Russia, Italy, Spain, Turkey, Rest of Europe in Europe, China, Japan, India, South Korea, Singapore, Malaysia, Australia, Thailand, Indonesia, Philippines, Rest of Asia-Pacific (APAC) in the Asia-Pacific (APAC), Saudi Arabia, U.A.E, South Africa, Egypt, Israel, Rest of Middle East and Africa (MEA) as a part of Middle East and Africa (MEA), Brazil, Argentina and Rest of South America as part of South America
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Key Market Players
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LUXOFT, A DXC TECHNOLOGY COMPANY (Switzerland), Vector Informatik GmbH (Germany), Sigma Software (Ukraine), NVIDIA Corporation (U.S.), Aptiv (U.S.), Elektrobit (Germany), KPIT (India), NXP Semiconductors (Netherlands), aiMotive (Hungary), Siemens (Germany), Intellias (Ukraine), Hexagon AB (Sweden), OXBOTICA (U.K.), Lynx Software Technologies (U.S.), Renesas Electronics Corporation (Japan), Intel Corporation (U.S.), Blackberry Limited (Canada), Airbiquity Inc. (U.S.), Green Hills Software (U.S.), Robert Bosch GmbH (Germany), Wind River Systems, Inc. (U.S.), Alphabet Inc. (U.S.),Autonet Mobile, Inc. (U.S.), MONTAVISTA SOFTWARE LLC. (U.S.), and Microsoft (U.S.)
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Market Opportunities
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Value Added Data Infosets
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In addition to the market insights such as market value, growth rate, market segments, geographical coverage, market players, and market scenario, the market report curated by the Data Bridge Market Research team includes in-depth expert analysis, import/export analysis, pricing analysis, production consumption analysis, and pestle analysis.
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Automotive Software Market Definition
Automotive software refers to the integrated systems and applications used to control, manage, and optimize vehicle functions. It plays a crucial role in various areas, including infotainment, safety systems, autonomous driving, and vehicle performance. These software systems enable features such as real-time navigation, driver assistance, engine control, and diagnostics. With the rise of electric vehicles and connected cars, automotive software has expanded to include communication technologies, such as vehicle-to-everything (V2X) connectivity and over-the-air updates. The software is critical in enhancing vehicle safety, efficiency, and the overall driving experience, making modern cars more intelligent and adaptable.
Automotive Software Market Dynamics
Drivers
- Rise in the Number of Connected Vehicles
The increasing number of connected vehicles is transforming the automotive industry. These vehicles, equipped with embedded SIM cards or chipsets, offer internet access and are controllable via smartphone applications. Features such as remote door locking/unlocking, climate control, and vehicle location tracking are becoming standard, providing enhanced convenience for users. For instance, Tesla’s vehicles allow owners to monitor and control various car functions remotely through their mobile app, boosting consumer demand for connected solutions. As automakers continue to integrate smart features, the demand for automotive software is expected to rise, driving market growth and fostering innovation in vehicle connectivity systems.
- Rising Demand for Electric Vehicles
The rising demand for electric vehicles (EVs) is reshaping the automotive landscape as nations strive for sustainable transportation. With zero carbon emissions, low noise, and high efficiency, EVs are gaining traction globally. For instance, in May 2024, KPIT Technologies has strategically engaged in partnerships with several prominent U.S. car manufacturers. This collaboration aims to integrate KPIT's cutting-edge generative AI technology directly into vehicles, enhancing the driving experience with advanced features. By leveraging artificial intelligence, KPIT intends to transform how consumers interact with their cars, ultimately paving the way for smarter, safer, and more efficient automotive solutions in the market.
Opportunities
- Rise of Over-the-Air (OTA) Updates
The rise of Over-the-Air (OTA) updates in the automotive software market presents significant growth opportunities. By enabling manufacturers to remotely update software and fix bugs, companies can enhance vehicle performance without the need for physical service visits. For instance, in March 2024, Wipro Limited has formed a strategic partnership with General Motors (GM) and the global automotive supplier Magna to create the SDVerse platform. This B2B sales platform is designed for the buying and selling of automotive software, streamlining the sourcing and procurement process. By offering a matchmaking service, the SDVerse platform aims to revolutionize how automotive companies connect, collaborate, and access innovative software solutions.
- Growing Focus on Cybersecurity
The increasing connectivity of vehicles has heightened the risk of cyberattacks, creating a significant opportunity for the automotive cybersecurity market. With hackers targeting critical vehicle systems, manufacturers are investing in advanced cybersecurity solutions to safeguard data and ensure passenger safety. For instance, in January 2022, Aptiv announced its collaboration with Sophia Velastegui to accelerate the development of mobility software technologies. This partnership focuses on harnessing advanced artificial intelligence (AI) capabilities for enhancing product development. By combining their expertise, both companies aim to commercialize new technologies and expand their product portfolio, leading to the creation of innovative solutions that enhance vehicle performance and user experience in the automotive industry.
Restraints/Challenges
- Complexity of Integration
The complexity of integration significantly hinders the automotive software market as vehicles become more software-driven. Integrating new software with existing systems is challenging, as multiple platforms must operate seamlessly together. This complexity often results in increased costs and extended development timelines, as manufacturers grapple with compatibility issues, legacy systems, and evolving technology standards. Furthermore, the need for rigorous testing to ensure interoperability can delay product launches and contribute to rising expenses. As a result, automakers may face difficulties in meeting market demands and achieving competitive advantages, ultimately restricting growth and innovation in the automotive software sector.
- High Development Costs
High development costs are a significant restraint in the automotive software market. Creating advanced software solutions demands substantial investment in research and development, encompassing expenses for talent acquisition, technology infrastructure, and testing. Smaller companies often find it challenging to secure the necessary funding, which limits their ability to innovate and compete effectively. This financial burden can result in slower product development cycles and fewer breakthroughs, stifling competition within the market. As a consequence, the reliance on a limited number of established players may persist, reducing diversity in software offerings and potentially leading to stagnation in technological advancements within the automotive industry.
This market report provides details of new recent developments, trade regulations, import-export analysis, production analysis, value chain optimization, market share, impact of domestic and localized market players, analyses opportunities in terms of emerging revenue pockets, changes in market regulations, strategic market growth analysis, market size, category market growths, application niches and dominance, product approvals, product launches, geographic expansions, technological innovations in the market. To gain more info on the market contact Data Bridge Market Research for an Analyst Brief, our team will help you take an informed market decision to achieve market growth.
Automotive Software Market Scope
The market is segmented on the basis of offering, organization size, software layer, EV utility, vehicle type and end-user. The growth amongst these segments will help you analyze meagre growth segments in the industries and provide the users with a valuable market overview and market insights to help them make strategic decisions for identifying core market applications.
Offering
- Solutions
- Services
Organization Size
- Large Scale Organizations
- Medium Scale Organization
- Small Scale Organization
Software Layer
- Operating System
- Middleware
- Application Software
EV Utility
- Charging Management
- Battery Management
- V2G
Vehicle Type
- Passenger Cars
- Electric Vehicles
- Light Commercial Vehicles
- Heavy Duty
End-User
- ADAS and Safety Systems
- Communication Systems
- Infotainment Systems
- Body Control and Comfort System
- Engine Management and Powertrain
- Vehicle Management and Telematics
- Autonomous Driving
- HMI Application
- Others
Automotive Software Market Regional Analysis
The market is analyzed and market size insights and trends are provided by offerings, organization size, software layer, EV utility, vehicle type and end-user as referenced above.
The countries covered in the market report are U.S., Canada, Mexico in North America, Germany, Sweden, Poland, Denmark, Italy, U.K., France, Spain, Netherland, Belgium, Switzerland, Turkey, Russia, Rest of Europe in Europe, Japan, China, India, South Korea, New Zealand, Vietnam, Australia, Singapore, Malaysia, Thailand, Indonesia, Philippines, Rest of Asia-Pacific (APAC) in Asia-Pacific (APAC), Brazil, Argentina, Rest of South America as a part of South America, U.A.E, Saudi Arabia, Oman, Qatar, Kuwait, South Africa, Rest of Middle East and Africa (MEA) as a part of Middle East and Africa (MEA).
Asia-Pacific is expected to be the fastest-growing global automotive software market. The rising infrastructure, commercial, and industrial developments in emerging countries such as China, Japan, India, and South Korea are credited with the market's dominance. China dominates the Asia-Pacific region as countries' old infrastructure, such as bridges, highways, sewage systems, and tunnels, is continually being repaired and improved with the use of various machine control equipment, such as excavators, paving systems, and dozers.
The country section of the report also provides individual market impacting factors and changes in market regulation that impact the current and future trends of the market. Data points such as down-stream and upstream value chain analysis, technical trends and porter's five forces analysis, case studies are some of the pointers used to forecast the market scenario for individual countries. Also, the presence and availability of global brands and their challenges faced due to large or scarce competition from local and domestic brands, impact of domestic tariffs and trade routes are considered while providing forecast analysis of the country data.
Automotive Software Market Share
The market competitive landscape provides details by competitor. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, global presence, production sites and facilities, production capacities, company strengths and weaknesses, product launch, product width and breadth, application dominance. The above data points provided are only related to the companies' focus related to market.
Automotive Software Market Leaders Operating in the Market Are:
- LUXOFT, A DXC TECHNOLOGY COMPANY (Switzerland)
- Vector Informatik GmbH (Germany)
- Sigma Software (Ukraine)
- NVIDIA Corporation (U.S.)
- Aptiv (U.S.)
- Elektrobit (Germany)
- KPIT (India)
- NXP Semiconductors (Netherlands)
- aiMotive (Hungary)
- Siemens (Germany)
- Intellias (Ukraine)
- Hexagon AB (Sweden)
- OXBOTICA (U.K.)
- Lynx Software Technologies (U.S.)
- Renesas Electronics Corporation (Japan)
- Intel Corporation (U.S.)
- Blackberry Limited (Canada)
- Airbiquity Inc. (U.S.)
- Green Hills Software (U.S.)
- Robert Bosch GmbH (Germany)
- Wind River Systems, Inc. (U.S.)
- Alphabet Inc. (U.S.)
- Autonet Mobile, Inc. (U.S.)
- MONTAVISTA SOFTWARE LLC. (U.S.)
- Microsoft (U.S.)
Latest Developments in Automotive Software Market
- In May 2024, KPIT Technologies has strategically engaged in partnerships with several prominent U.S. car manufacturers. This collaboration aims to integrate KPIT's cutting-edge generative AI technology directly into vehicles, enhancing the driving experience with advanced features. By leveraging artificial intelligence, KPIT intends to transform how consumers interact with their cars, ultimately paving the way for smarter, safer, and more efficient automotive solutions in the market
- In April 2024, HARMAN announced that Tata Motors, India’s foremost automobile manufacturer, has chosen the HARMAN Ignite Store as its official in-vehicle app marketplace. This decision aims to provide customers with a seamless, reliable, and safe mobility experience. By offering a range of applications tailored to the needs of users, Tata Motors hopes to expand its market reach and enhance user satisfaction across new geographical regions
- In April 2024, The BMW Group and Tata Technologies entered into a significant agreement to establish a joint venture focused on developing automotive software and IT solutions. This initiative will create development hubs in major Indian cities, including Pune, Bengaluru, and Chennai. The collaboration aims to leverage local talent and expertise to drive innovation in automotive technology, ultimately enhancing the digital capabilities of the automotive sector in India
- In March 2024, Wipro Limited has formed a strategic partnership with General Motors (GM) and the global automotive supplier Magna to create the SDVerse platform. This B2B sales platform is designed for the buying and selling of automotive software, streamlining the sourcing and procurement process. By offering a matchmaking service, the SDVerse platform aims to revolutionize how automotive companies connect, collaborate, and access innovative software solutions
- In January 2022, Aptiv announced its collaboration with Sophia Velastegui to accelerate the development of mobility software technologies. This partnership focuses on harnessing advanced artificial intelligence (AI) capabilities for enhancing product development. By combining their expertise, both companies aim to commercialize new technologies and expand their product portfolio, leading to the creation of innovative solutions that enhance vehicle performance and user experience in the automotive industry
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