Automotive Software Market (By Application: ADAS & Safety Systems, Body Control & Comfort System, Powertrain System, Infotainment System, Communication System, Vehicle Management & Telematics, Connected Services, Autonomous Driving, HMI Application, Biometrics, Remote Monitoring, V2X System; By Vehicle Type: Passenger car, LCV, HCV; By Software Layer; By EV Application; By Offering; By Organization Size) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2024-2032

The global automotive software market size was valued at USD 34.16 billion in 2023 and is expected to reach USD 116.62 billion by 2032, poised to grow at a compound annual growth rate (CAGR) of 14.6% over the forecast period from 2024 to 2032. 

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Key Takeaways

• By software layer, the application software segment accounted market share of around 51.7% in 2023.
• By vehicle type, the passenger car segment hit a revenue share of 54.83% in 2023.
• By application, the autonomous driving segment accounted for 13.4% of revenue share in 2023. 
• By region, Asia Pacific region has reached a revenue share of around 37.2% in 2023.
• The North America region is growing at a CAGR of 17.2% over the forecast period.

Automotive Software Market in the Asia Pacific 2024 to 2032

The Asia Pacific automotive software market size was estimated at USD 12.71 billion in 2023 and is anticipated to reach around USD 44.94 billion by 2032, poised to grow at a CAGR of 15.1% from 2024 to 2032.

On the basis of geography, the region of Asia Pacific has emerged as the largest market up till now due to the increasing demand for advanced softwares and systems among the people. The rapid technological advancements which have been observed in this region is a major factor for the growing demand of automotive softwares. Increasing acceptance among the people for technological advancement has also boosted the demand for automotive software.

The region of North America has also emerged as a potential opportunity for the growth of the automotive software market. a huge demand is expected from the region of North America during the forecast period. The existence of the key market players and the rapid research and development programs carried out by them have emerged as a major growth factor for the growth of the automotive software market during the forecast period.

Automotive Software Market Overview

A collection of programmable instructions which are used in performing various operations of the in-vehicle applications which are computer based are known as the automotive software. These softwares are used for the embedded systems of the vehicles. Infotainment, body control, comfort and telematics are some of the applications that make use of the software. Advanced Driver Assistance Systems (ADAS), safety and communication or other applications that make use of the automotive software. The growing need for communication between the cars is expected to boost the automotive software's market in the coming years and the popularity of such applications has increased in the recent years.

The manufacturers of the automotive's are constantly engaged in incorporating the automotive softwares which help in providing more convenience and utility to the customers. The demand for advanced technologies has grown to a great extent in the recent years. The increasing demand for autonomous vehicles among the people has emerged as a major growth factor for the automotive software as it provides the necessary integration which helps to connect the entire vehicle to a single system that is able to manage the functioning and balance of the vehicle.

The use of telematics in the automotive software has enabled the companies to track the current status of the vehicles which helps to provide a better service to the consumers and also takes care of the current condition of the vehicle. This has proved to be a beneficial factor for the automotive industry as it reduces the maintenance cost of the vehicle. Skilled professionals are required in the automotive industry to manage the functioning of these softwares that helps to maintain the smooth functioning of the industry.

Introduction of many new market players in the automotive industry after the emergence of the electronic vehicle segment has proved to be a major driving force for the automotive software market as these vehicles use a single integrated system to connect the entire vehicle with the real time data of weather and road conditions that assists the vehicle to function smoothly and hence provides the potential consumers with a premium experience.

Growth Factors

Increased use of the innovative technologies and the introduction of innovative technologies that provide advanced user interface are expected to help in the growth of the market in the coming years. The increased use of the ADAS feature will also help in the growth of this software market in the coming years. The increased use of artificial intelligence will prove to be a boon for the growth of the market during the forecast period. The introduction of the 5G technology is expected to provide greater potential for the growth of the market in the coming years.

Artificial intelligence is used in the autonomous as well as the semi-autonomous vehicles. The revenue in the automotive sector has grown to a great extent as many opportunities are provided to the stakeholders due to the increased use of softwares in the automotive's. The demand for connected cars has also increased in the recent years and provided major opportunities for growth. Autonomous driving is another feature that is in great demand and this will also provide major opportunities for the growth of the market in the coming years and provide larger revenues to the market players.

• Recent innovations that have taken place in the field of technology
• Increasing demand for ADAS feature
• Increasing demand for artificial intelligence
• Introduction of 5G technology
• Demand for connected cars
• Demand for autonomous driving system

Automotive Software Market Scope

Automotive Software Market Dynamics

Key Market Drivers

• Increasing demand for connected cars - The segment of connected cars has observed a huge demand from the global market which makes use of advanced software systems that manage the entire functioning and handling of the car along with the assistance provided by artificial intelligence. This has emerged as a major driving force for the growth of the automotive software market when is expected to most the economy further.
• Emergence of new market players - Various new market players have emerged in in the automotive sector after the introduction of from the electric segment which has seen a tremendous demand from the recent market. A huge number of people who are opting for the technologically advanced options available in the automobile segment has boosted the demand for smoother and better softwares which are user friendly and provide a great experience to the consumer.

Key Market Challenges

• Lack of infrastructural advancements - The development in the field of infrastructure is considerably on a slower side as compared to read once made by the automotive industry. This is creating a gap between the two sectors which or supposed to walk hand in hand with a view to obtain maximum benefits from the current market. The usage of smart technology and systems demands a better infrastructure which connects intelligently with the system and provides a seamless service to the end user. lack of advanced facilities hinders the growth of the market to a great extent.
• Lack of connectivity - Avanced navigation systems and applications have been introduced by the key market players according to the increasing demand experience from the market. These advancements need to be supported by a proper Internet connection which helps the system to function seamlessly. lack of development in the field of Internet connectivity has hampered the growth of the automotive software market to great extent. These reasons have emerged as the challenging factors for the growth of the market.

Key Market Opportunities

• Introduction of 5G - The introduction of 5G technology has emerged as a major development for the automotive software industry. Increasing demand for faster network connectivity with a view to provide maximum benefits to the end user as emerged as a major opportunity for the growth of the market. Advanced wireless connectivity options that are provided with the automotive software has provided a very premium experience to the consumers which is foreseen to emerge as a major opportunity for the market.
• Modern designs- A rapid evolution has taken place as far as the design of the software is concerned which has attracted the potential consumers on the basis of its aesthetic value. The younger generations are attracted to the modern designs that have been launched by the key market players which emerges as a major opportunity for the growth of the market. Increasing number of new market players in the society has also boosted the growth of the market to a great extent.

Application Insights

The autonomous driving segment held the dominating share of the autonomous software market in 2023. Autonomous driving technologies represent the forefront of innovation in the automotive industry. The development of advanced software algorithms, sensor systems, and artificial intelligence (AI) capabilities has enabled significant progress in autonomous vehicle technology. Governments and regulatory bodies worldwide are increasingly supportive of autonomous driving technology, implementing regulations and standards to facilitate its adoption. This favorable regulatory environment encourages automotive manufacturers to invest in software development for autonomous vehicles.

Vehicle Type Insights

The passenger cars segment dominated the automotive software market in 2023. Passenger cars represent a significant portion of the automotive market in terms of sales volume. The sheer number of passenger cars on the road drives demand for software solutions tailored to enhance their functionality, safety, and convenience. Manufacturers prioritize the user experience in passenger cars, aiming to provide drivers and passengers with intuitive interfaces, seamless connectivity, and personalized features. Automotive software contributes to creating an engaging and user-friendly environment within the vehicle.

On the other hand, the LCV segment is observed to witness the fastest expansion during the forecast period. LCVs are commonly used for commercial purposes such as transportation and delivery services. Automotive software solutions cater to the specific needs of fleet management, including route optimization, vehicle tracking, and maintenance scheduling, which are crucial for enhancing operational efficiency and reducing costs in the LCV segment. Telematics systems play a vital role in LCVs for collecting and transmitting data related to vehicle performance, driver behavior, and location tracking. Automotive software enables seamless integration of telematics solutions, providing real-time insights and analytics for fleet operators to optimize their operations.

Global Automotive Software Market, By Vehicle Type, 2021-2023 (USD Billion)

Software Layer Insights

On the basis of the software layer, the segment of the operating system has emerged as the fastest market due to the increasing demand for a better user interface that provides a premium experience to the potential consumers.

Increasing demand for modern technology among the younger generation that has a better operating system which provides a smooth functioning experience has emerged as a major opportunity for the growth of the market. Many key market players all over the world are aiming to introduce their personalized operating systems which has helped this segment to record a considerable revenue over a period of time.

Recent Developments

• In August 2020 - a software stack was introduced buy a vehicle rental platform, Zoomcar. This software was launched into the market with a view to track the behavior of the driver and the status of the vehicle in real time. This system helped the company to provide a better service to their customers, prevent damage to their vehicles and avoid rash driving of the vehicles.

Automotive Software Market Companies

• ATEGO SYSTEMS INC. (PTC)
• AUTONET MOBILE, INC.
• ADOBE
• AIRBIQUITY INC
• BLACKBERRY LIMITED
• GOOGLE (ALPHABET INC.)
• MONTAVISTA SOFTWARE, LLC
• GREEN HILLS SOFTWARE
• MICROSOFT CORPORATION
• WIND RIVER SYSTEMS, INC

Segments covered in the report

By Application

• ADAS & Safety Systems
• Body Control & Comfort System
• Powertrain System
• Infotainment System
• Communication System
• Vehicle Management & Telematics
• Connected Services
• Autonomous Driving
• HMI Application
• Biometrics
• Remote Monitoring
• V2X System

By Vehicle Type

• Passenger car
• LCV
• HCV

By Software Layer

• Operating System
• Middleware
• Application software

By EV Application

• Charging Management
• Battery Management
• V2G

By Offering

• Solutions
• Services

By Organization Size

• Large Scale Organizations
• Medium Scale Organization
• Small Scale Organization 

By Geography

• North America
• U.S.
• Canada
• Europe
• U.K.
• Germany
• France
• Asia-Pacific
• China
• India
• Japan
• South Korea
• Malaysia
• Philippines
• Latin America
• Brazil
• Rest of Latin America
• Middle East & Africa (MEA)