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Automotive Software Market

Automotive Software Market

The market for Automotive Software was estimated at $20.6 billion in 2024; it is anticipated to increase to $34.6 billion by 2030, with projections indicating growth to around $53.2 billion by 2035.

Report ID:DS2005008
Author:Swarup Sahu - Senior Consultant
Published Date:January 2025
Datatree
Automotive & Transportation
A&T Peripherals
Automotive Software
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Report Summary
Table of Contents
Methodology
Market Data

Global Automotive Software Market Outlook

Revenue, 2024

$20.6B

Forecast, 2034

$48.8B

CAGR, 2024 - 2034

9.0%
The Automotive Software industry revenue is expected to be around $22.5 billion in 2025 and expected to showcase growth with 9.0% CAGR between 2025 and 2034. Reshaping the global car industry significantly by turning traditional vehicles into sophisticated smart gadgets that are revolutionizing transportation and changing how people perceive and engage with cars on a global scale.

The significant impact of these features is enhanced by their aspects such as connectivity options and predictive maintenance along with telematics and security measures including firmware, over the air (FOTA) updates being incorporated into the system design process. Additionally worth mentioning is the emerging influence of vehicles and self driving technology supported by AI which is driving fresh developments that are reshaping this dynamic market landscape while also fostering growth and creativity at a rapid pace.

Automotive Software market outlook with forecast trends, drivers, opportunities, supply chain, and competition 2024-2034

Market Key Insights

  • The Automotive Software market is projected to grow from $20.6 billion in 2024 to $48.8 billion in 2034. This represents a CAGR of 9%, reflecting rising demand across Vehicle Diagnostic Tools, In-Vehicle Infotainment (IVI) Systems and Advanced Driver Assistance Systems (ADAS).
  • The market leaders in this sector include Siemens PLM Software and IBM Corporation and Oracle Corporation which determine the competitive dynamics of this industry.
  • U.S. and Germany are the top markets within the Automotive Software market and are expected to observe the growth CAGR of 6.6% to 9.5% between 2024 and 2030.
  • Emerging markets including India, Brazil and South Africa are expected to observe highest growth with CAGR ranging between 8.6% to 11.3%.
  • The Automotive Software market will experience $3.9 billion in additional growth through 2030 because of the transition toward electric vehicles.
  • The Automotive Software market is set to add $28.2 billion between 2024 and 2034, with manufacturer targeting Middleware & undefined Component Type projected to gain a larger market share.
  • With Rise of autonomous vehicles, and Integration of iot in automotive industry, Automotive Software market to expand 137% between 2024 and 2034.
automotive software market size with pie charts of major and emerging country share, CAGR, trends for 2025 and 2032

Opportunities in the Automotive Software

The trend towards environmentally friendly modes of transportation is making electric vehicles increasingly popular in the automotive sector leading to a rising need, for specialized Automotive Software that focuses on efficiently handling EV energy consumption and maximizing battery performance.

Growth Opportunities in North America and Europe

North America Outlook

In North America's automotive software market competition is fierce with players in the field dominating the scene. The push towards connected vehicle technologies is a key driver of market expansion. High levels of income and robust infrastructures are also fueling the uptake of advanced automotive software offerings, in this region.

Europe Outlook

In Europe's software sector there are promising prospects due to significant innovation and technology integration especially in nations such as Germany and France where strict emissions policies require the use of effective automotive software solutions; further propelled by key car manufacturers, in the region boosting market expansion.

Market Dynamics and Supply Chain

01

Driver: Rise of Autonomous Vehicles, and Growing Emphasis on Safety Features

The advancement and widespread use of self driving cars play a role in shaping the automotive softwareindustry'sgrowth trajectory. With car producers focusing on enhancing features in vehicles there is also a growing need for advanced software to handle functions like guiding the vehicle detecting obstacles, on the road and making crucial decisions while driving. With governments around the world tightening regulations concerning vehicle safety standards it is also imperative for companies to incorporate software to meet these mandates. These software systems are also capable of overseeing functions like emergency braking, lane keeping assistance and enhanced cruise control – all becoming more commonplace, in modern vehicles.
The integration of IOT technology in the industry is also creating a greater demand for software solutions that enable real time connectivity and data exchange in vehicles. Meeting the expectations of today's consumers, for more interactive features.
02

Restraint: High Development Cost

Developing and designing tech automotive software demands substantial financial commitments that may present obstacles for small and medium sized enterprises . This process encompasses expenses related to research and development efforts well as licensing fees, for integration testing and ongoing maintenance tasks. Given the costs involved in this endeavor some companies may be hesitant to engage in the development of complex software solutions which could potentially impede overall market expansion.
03

Opportunity: Vehicle Connectivity and Driver Experience and Autonomous Vehicle Technology

The increasing popularity of IoT has transformed the role of cars from transportation vehicles to interconnected hubs that seamlessly blend with users’ digital routines and habits This shift opens up avenues for creating software tailored for in car entertainment systems custom navigation settings remote diagnostics and safety enhancements all aimed at enrichening the driving and riding experience, for both drivers and passengers alike.
Self driving technology is on its way to becoming a game changer in the sector and presents an exciting avenue for cutting edge software solutions that pave the path to completely autonomous vehicles. From navigation tools to safety mechanisms, for seamless self driving experiences.
04

Challenge: Lack of Standardized Protocols

In the software industry the absence of consistent protocols leads to compatibility challenges, between various software applications, which in turn hinders the adoption of new technologies and complicates the integration of different software platforms.

Supply Chain Landscape

1
Software Development

Microsoft

Google

2
Hardware Integration

Bosch

Harman International

3
System Testing

IBM

HCL Technologies

4
End User Application

General Motors

Volkswagen

*The illustration highlights the key stakeholders within the supply chain ecosystem.

Applications of Automotive Software in Vehicle Diagnostic Tools, In-Vehicle Infotainment (IVI) Systems & Advanced Driver Assistance Systems (ADAS)

Vehicle Diagnostic Tools

Automotive software is commonly utilized to enhance vehicle diagnostics which helps in pinpointing and fixing car issues leading to reduced downtime and improved repair effectiveness significantly. These tools offer a benefit by facilitating real time issue resolution, predictive maintenance as well as system enhancement fostering better interaction between users and their vehicles. Prominent companies, in this sector encompass Bosch and Continental.

In-Vehicle Infotainment (IVI) Systems

IVI systems greatly improve the experience for both drivers and passengers by combining entertainment options with navigation and connectivity features in the vehicle interior. The technology utilized in these systems allows for features such as touch screen controls, integration, with smartphones, voice assistants and Wi Fi connectivity resulting higher demand.

Advanced Driver Assistance Systems (ADAS)

ADAS plays a role in automotive software programs by providing safety functionalities aimed at preventing accidents and enhancing driving convenience. It includes adaptive cruise control features like lane departure alerts and automatic emergency braking systems. ADAS utilizes sensors and cameras along, with automotive software to furnish drivers with timely information and preemptive notifications.

Recent Developments

December 2024

Microsoft has introduced a software solution for the automotive industry called DriveTech, which incorporates AI technology for advanced analysis and predictive capabilities, in the market.

November 2024

General Motors teams up, with tech giant IBM to create an automotive software platform called AutoSync for their lineup of electric vehicles.

September 2024

Tesla has introduced Auto Pilot+ a car software, with improved self driving features and integrated user interface design.

LatelyThere'sbeen a trend toward developing unified automotive software systems that focus more on enhancing connectivity and automation features in vehicles. These days automakers and major players are joining forces, with technology firms to incorporate cutting edge software solutions in cars to improve user experience interface security measures driving functions and data analysis tools.

Impact of Industry Transitions on the Automotive Software Market

As a core segment of the A&T Peripherals industry, the Automotive Software market develops in line with broader industry shifts. Over recent years, transitions such as Shift Towards Electrification and Advent of Autonomous Vehicles have redefined priorities across the A&T Peripherals sector, influencing how the Automotive Software market evolves in terms of demand, applications and competitive dynamics. These transitions highlight the structural changes shaping long-term growth opportunities.
01

Shift Towards Electrification

Given the increasing worries about the environment and the progress in technology the automotive sector is making a move towards electric cars. This shift has led to the need for the creation of software that handles aspects such, as battery performance, energy management and charging systems. These improvements are transforming the software landscape in the industry as developers concentrate on crafting strong software solutions tailored for electric vehicles. This industry transition is expected to add $3.9 billion in the industry revenue between 2024 and 2030.
02

Advent of Autonomous Vehicles

The advancement of driving technology is a significant shift that is altering the landscape of the automotive software industry significantly. Autonomous vehicles rely extensivelyon sophisticated software programs to operate effectively in various driving scenarios incorporating AI and ML methods into these systems leads to new possibilities and complexities, in the automotive software sector.

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