Automotive Software & Electronics Market Size, Analysis 2031

Report Description

Automotive Software & Electronics Market Outlook

The global Automotive Software & Electronics market was valued at USD 356.2 billion in 2022 and is projected to reach USD 641.3 billion by 2031, expanding at a CAGR of 7.2% during the forecast period. Automotive Software & Electronics refers to the component, systems, and applications used in modern vehicles that are controlled by software and electronic circuits.

They are responsible for controlling various functions of vehicles such as engine control, transmission, braking, steering, safety, navigation, entertainment, and connectivity. The integration of software and electronics in automotive engineering has brought about significant transformation in the automotive industry by improving vehicle performance, and fuel efficiency, and reducing emissions.

Get Free Sample Report

Macro-Economic Factors

GDP

Gross domestic product or GDP refers to the value of goods and services produced in a country over a specific time period. Revenue generated from automotive industry contributes to the GDP of a country.

Demand and Supply

The demand and supply of automotive software & electronics in the automotive industry, have risen significantly in recent years due to the increasing complexity of vehicular systems, evolving consumer preferences, and changing government regulations. Customers are now seeking more advanced features and connectivity options in their vehicles and automakers are responding by incorporating a range of sophisticated software and electronics systems in their products.

The growing trends towards electrification, automation, and connectivity in the automotive sector have fueled the demand further for high-performance software and electronics. On the supply side, there has been exponential growth in the number of software and electronics vendors catering to the automotive industry with specialized products and services.

Government Regulations

Various regulatory agencies around the world set standards and guidelines for the installation, testing, and operation of electronic systems in the vehicle to ensure safety, reliability, and environmental sustainability. U.S. National Highway Traffic Safety Administration(NHTSA) sets a number of safety standards that regulate various aspects of vehicular systems, including electronic stability control systems, seat belts, airbags, and lighting.

Emission Protection Agencies(EPA) have set local emission standards for individual states in the US and European Union has standard limits for all new cars across the EU region.

Automotive Software & Electronics Market Dynamics

Market Driver- Growing Demand for Safety, Security, and Comfort in Automobiles

Safety is a crucial element that drives the automotive software and electronics market. Technological advancement in safety systems has led to the introduction of driver assistance systems that ensures smooth automotive operations, reducing accidents, injuries, and even fatalities. Improvement in automotive software has resulted in the development of more advanced braking systems, airbags, and blind-spot detection, among others.

As vehicles become more connected to the internet and rely on electronic systems to perform critical functions, cybersecurity has increasingly become a concern for automotive manufacturers. As a result, automotive manufacturers have increased investment towards secure communication solutions.

Market Restraint- High Development Cost and Security Concerns

High development cost is one of the factors restraining the growth of the market, as developing software and electronics for vehicles can be expensive, particularly given the complex safety and regulatory requirement in the automotive industry.

The rise of autonomous vehicles or self-driving cars has brought about concerns related to hijacking, data breaches, and hacking with the increasing connectivity of vehicles, cybersecurity has become a major concern. Any vulnerabilities in automotive software or electronics could potentially put drivers and passengers at risk an could also led to costly recalls and damage to a company’s reputation.

Market Opportunity

The development of autonomous vehicles which demand advanced software and electronics, including radar systems and sophisticated algorithms that enable the vehicles to navigate safely and efficiently is creating opportunities for the market growth. With the increasing demand for connected cars, there is a growing need for software and electronics that enable communication between vehicles and other devices.

This includes vehicle-to-vehicle(V2V) and vehicle-to-infrastructure(V2I) communication technologies. As the world shifts towards electric vehicles, there is significant opportunity for companies that develop software and electronics for electronic powertrains, battery management systems, and charging infrastructure.

Advanced driver assistance systems (ADAS) technologies are becoming increasingly common in vehicles with features such as lane departure warning, automotive emergency braking and adaptive cruise control. These systems require advanced software and electronics to operate effectively.

Scope of Automotive Software & Electronics Market Report

The report on the global Automotive Software & Electronics market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Automotive Software & Electronics Market Segmental Outlook

The global automotive software and electronics market is segmented on the basis of by type, vehicle types, sales channel.

Based on type the global automotive software and electronics market is fragmented into Sensors, Power Electronics, ECU/DCUs, Software, and Others. ECU/DCUs segment is anticipated to hold a significant share of the market this is due to the electrification of vehicles, as an increasing shift towards electric vehicles which is creating demand for ECU/DCUs that can manage and control electric power in the vehicle. Which also includes battery management systems that can optimize the performance and lifespan of electric vehicle batteries.

Based on Vehicle Type the global automotive software and electronics market is fragmented into Passenger Vehicles and Commercial Vehicles. The Passenger Vehicle segment is anticipated to dominate the global market during the forecast period. 

The growth of the market is attributed to the automakers' quick adoption of cutting-edge technologies like infotainment and driver assistance systems. Furthermore, the government's strict regulations regarding fuel economy and the safety of both drivers and passengers are boosting market growth.

The market for electric vehicles (EVs) is expanding at an exponential rate. Automakers are being forced to switch from making conventional gasoline vehicles to electric ones due to rising fuel emission levels and carbon footprints. This aspect is anticipated to have rapid market growth.

Due to the rising demand for safety features, increased comfort, and driver assistance for easier driving, the light commercial vehicle is also experiencing consistent expansion in this market.

Get Free Sample Report

By Sales Channel the global automotive software and electronics market is segmented into OEM, Aftermarket. The OEM segment is projected to dominate the market during the forecast period. As OEMs are continuously developing new technologies and improving existing ones, which enables vehicle manufacturers to incorporate these technologies into their vehicles to provide better performance, safety, and convenience.

Get Free Sample Report

Regional Outlook

Asia Pacific is expected to dominate the market during the forecast period, owing to the rising investments in automotive and electronic manufacturing industries as well as the presence of large-scale industries the region. Moreover, developing economies such as India, China, and Japan comprise a significant number of electronics and automotive manufacturers. The automotive manufacturing companies are planning to increase their production volume by adopting advanced technologies in manufacturing facilities in this region.

Get Free Sample Report