Automotive Software Market by Application (Safety System, Infotainment and Telematics, Powertrain and Chassis), Product (Operating System, Middleware and Application Software) and Vehicle Type (ICE Passenger Car, ICE Light Commercial Vehicle, ICE Heavy Commercial Vehicle, Battery Electric Vehicle, Hybrid Electric Vehicle, Plug-in Hybrid Electric Vehicle and Autonomous Vehicles), and by Region (North America, Europe, Asia Pacific, Middle East and Africa, and South America), Global Forecast 2022 to 2032

Market Analysis and Insights

The size of the global automotive software market was estimated at USD 27 billion in 2022 and is anticipated to expand to USD 116.65 billion by 2032, with a projected CAGR of 16.12% from 2023 to 2032.

For the participants in the ecosystem, the rise in connected vehicles has opened up new revenue-generating possibilities. In an effort to take advantage of the potential revenue, several non-automotive businesses have jumped into the race for linked and autonomous vehicles. Modern vehicles aren't just moving machines with gear within. In the future decades, this percentage is anticipated to increase to more than 60%, accounting for close to 40% of all electronic information at the moment. Most electronic content for cutting-edge automotive applications like ADAS, engine management systems, telematics, and so forth will be dominated by domain controllers, consolidated ECUs, AI, and HMI.

Automotive Software Market Scope:

Market Definition

The term "automotive software" refers to the computer systems, programmes, and applications that are incorporated into automobiles to manage a variety of operations, enhance the user experience, increase safety, and allow cutting-edge innovations. 

The significance of automotive software has significantly increased as a result of the complexity and technological integration of automobiles. These software programmes give passengers in cars connection, entertainment, and navigational services. They include of touchscreens, voice recognition, smartphone integration (like Apple CarPlay and Android Auto), and access to applications, music, and other material. Additionally, they have multimedia interfaces. Software for ADAS features technologies including adaptive cruise control, lane departure warning, automatic emergency braking, blind-spot monitoring, and others. To aid drivers with different driving duties and improve safety, these systems make use of sensors, cameras, and radar.

Software is essential for allowing self-driving capabilities as cars progress towards increasing degrees of autonomy. This comprises control systems that let the vehicle navigate and react to its surroundings as well as perception algorithms, decision-making logic, sensor fusion, and control systems.
Automotive software regulates how the engine, transmission sales, and other powertrain parts function. Based on real-time sensor data, this programme optimizes performance, emissions, and fuel efficiency.

Key Market Segmentation

Insights on Vehicle Type

The HCV Segment is Valued for the Highest Share

With the rising need for IoT services, the HCV segment has emerged as the fastest-growing market by vehicle type. The introduction of automated systems in heavy commercial vehicles has encouraged potential purchasers to choose these systems. Better transport facilities are needed to prevent accidents and mishaps that result in significant losses of products and services due to the growing number of export and import facilities that have been introduced to the market today. The demand for autonomous cars that are driven by powerful software and artificial intelligence that assess the state of the roads and traffic to avoid an unforeseen event has surged as a result. 

Insights on Application

The Power Train Engineering Segment Valued for the Highest Share

During the anticipated period, the automotive software market's power train segment would have the fastest growth in terms of applications. Powertrain technology uses onboard sensing and external connectivity through vehicle-to-vehicle (V2V), vehicle-to-infrastructure (V2I), and vehicle-to-everything (V2X) technologies to enhance the performance and fuel efficiency of internal combustion engines, electric motors, and hybrid vehicles. 

Insights on Region

The Asia Pacific Region Accounted for the Highest Share

While expanding at a CAGR of 16.10%, Asia Pacific will control the market with the highest share. It is anticipated that the Asia-Pacific automotive software industry would expand as a result of rapidly increasing luxury vehicle sales in developing nations like China, Thailand, and India. The market for automotive software in this area is largely being propelled by the fast rise of connected mobility and intelligent transportation systems in nations like China and Japan. 

Key Company Profiles

The key players operating in the automotive software market include Adobe Inc., Autonet Mobile, Inc., Airbiquity Inc., Atego Systems Inc. (PTC), Blackberry Limited, Microsoft Corporation, Goggle, Green Hills Software, Wind River Systems, Inc., and MontaVista Software. 

COVID-19 Impact and Market Status

Vehicle production was curtailed as a result of lockdowns, supply chain disruptions, and plant closures, and the incorporation of new software technology into cars was delayed. 

Several anticipated vehicle launches have been postponed or rescheduled as a result of production and testing difficulties. Updates and new software features were impacted by this. Software development and testing, which sometimes require in-person cooperation and access to specialized equipment, faced difficulties with the shift to remote employment. 

Consumer behavior changed as a result of the epidemic, and internet buying was one of those shifts. The demand for software-related services like telematics, online shopping, and remote car diagnostics was influenced by this. Software elements that reduce physical interaction, such as voice commands, remote vehicle controls, and contactless interfaces, have grown in relevance.

To prevent future disruptions, automakers and software companies started to prioritize supply chain resilience and diversification.

Latest Trends

1. A significant development is the incorporation of software into connected and autonomous automobiles. Vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication, as well as the advancement of self-driving capabilities, depend on software.

2. It has become more common to update car software wirelessly (OTA upgrades). With the help of this trend, automakers can remotely patch issues, add features, and boost car performance without having customers go to a dealership.

3. The administration of electric vehicle (EV) components, such as battery management, energy efficiency optimization, and charging infrastructure integration, depends heavily on software.

4. Innovative touchscreens, augmented reality displays, gesture recognition systems, and user interfaces are converting the interiors of vehicles into digital cockpits, improving user engagement and driving safety. 

5. Various features of automobiles, such as advanced driver assistance systems (ADAS), predictive maintenance, individualized services, and autonomous driving, are being improved using artificial intelligence and machine learning. While cybersecurity software is crucial for shielding connected vehicles from cyber-attacks and unauthorized access, blockchain technology is being investigated for safe and transparent data exchange.

Significant Growth Factors

The growth of connected and autonomous cars has increased the requirement for sophisticated software solutions, such as real-time data processing, communication networks, sensor fusion, and AI algorithms.

Opportunities for software development in battery management, energy optimization, and charging infrastructure integration have been presented by the move to electric vehicles (EVs).

Through infotainment systems, digital cockpits, user-friendly interfaces, and personalized services, automakers are concentrating on delivering improved user experiences. All of these features call for sophisticated software solutions.

Software for collision avoidance, lane-keeping, automated emergency braking, and other safety features have been developed in response to the need for advanced driver assistance systems (ADAS) and other safety features. 

The ability to remotely update car software has raised consumer happiness, sped up problem-solving for manufacturers, and facilitated the introduction of new features.

There is now more need than ever for software solutions that provide seamless user experiences and data integration as a result of the expansion of ride-sharing, car-sharing, and on-demand mobility services.

Restraining Factors 

It might be difficult to integrate numerous software components while guaranteeing compatibility and stability as cars grow more technologically advanced.

Concerns about cybersecurity have been brought on by the rising connectedness of automobiles, necessitating effective solutions to guard against hacking, data breaches, and unauthorized access.

A wide range of players, including manufacturers, software developers, suppliers, and service providers, are involved in the automotive software business. It might be difficult to coordinate efforts and guarantee compatibility.

Regulations are frequently outpaced by rapid technology innovation, which poses problems for autonomous and connected vehicle safety requirements, liability, and legal frameworks. The collection and use of data from automobiles presents privacy issues, necessitating open data management procedures and user permission.

Overcoming technological obstacles relating to sensor accuracy, machine learning, and complicated situations is necessary for creating dependable and accurate software for autonomous driving and other advanced features.

Recent Developments in the Global Automotive Software Market: A Snapshot

• The Zoomcar vehicle rental platform unveiled its software stack in August 2020. With the intention of tracking driver behavior and vehicle status in real-time, this software was introduced to the market. This technique allowed the business to better serve its clients, guard against vehicle damage, and discourage hasty driving.

Key Segments Automotive Software Market

by Application 
• Safety System
• Infotainment and Telematics
• Powertrain and Chassis

Product Overview 
• Operating System
• Middleware
• Application Software

Vehicle Type Overview 
• ICE Passenger Car
• ICE Light Commercial Vehicle
• ICE Heavy Commercial Vehicle
• Battery Electric Vehicle
• Hybrid Electric Vehicle
• Plug-in Hybrid Electric Vehicle 
• Autonomous Vehicles

Regional Overview 

North America
• U.S
• Canada
Europe
• Germany
• France
• UK
• Rest of Europe
Asia Pacific
• China
• India
• Japan
• Rest of Asia Pacific
South America
• Mexico
• Brazil
• Rest of South America