Automotive Digital Services Market Report Overview
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The global automotive digital services market size is expected to grow from USD 3052.4 Million in 2022 and market is projected to touch USD 7745.12 Million by 2031, at a compound annual growth rate (CAGR) of 10.9% during the forecast period.
The rapid digitization of vehicles has transformed the automotive industry. The incorporation of embedded artificial intelligence (AI), augmented reality (AR), the internet of things (IoT), and other such ingenious technologies have changed the automotive landscape. The research and developments in making vehicles smarter and safer have increased manifold. Major businesses in the market are launching newer vehicles equipped with the latest automotive digital services and software. The launch of autonomous driving features on vehicles has created lucrative opportunities for the automotive digital services market. The continued emphasis on the interconnectedness of cars to reduce the number of accidents and increase safety on the road is anticipated to expand the growth of the automotive digital service market.
COVID-19 IMPACT
"Automotive Manufacturers Restructure Operational Structures Impacted by the Pandemic"
The sudden emergence of the COVID-19 pandemic has drastically impacted the global economy. It has stagnated the growth of several industries and markets, including the automotive digital services market. The high unemployment rates and the shift in consumer focus on essential expenditures have resulted in a declined demand for vehicles. The closure of production facilities due to stringent lockdowns have impacted the market growth. Additionally, the global supply chain network disruptions due to the worldwide trade ban and halted air transport have aggravated the situation. Automotive manufacturers are restructuring their operational structures to adapt to the dynamic market situations created by the pandemic. As vaccines are available to the global population, the market is slowly recovering. The market is expected to gain immense traction post-pandemic.
LATEST TRENDS
"Digital Showrooms to Stimulate Market Growth"
With the growing digitalization, vehicle buying has become quite easy. The lengthy, time-consuming, and hectic process of buying a vehicle has shortened with the introduction of virtual showrooms. The consumers/buyers can take a comprehensive view of different vehicles and their specifications online and consequently purchase a car online. The interactive user experience enhances the process of vehicle buying. The improved automotive digital services demos and graphics displayed virtually help buyers understand the vehicle’s technological features. The digital showrooms help businesses to attract significant customers and also reduce inventory costs. Most recently, Skoda launched a digital showroom as a pilot project in March 2022.
Automotive Digital Services Market SEGMENTATION
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Based on type, the market segments into in-vehicle digital services, logistic fleet management services, mobility-on-demand services, and others. Based on application, the market fragments into transportation management company, automobile service provider, automobile manufacturer, customer, and others. Based on vehicle type, the market divides into commercial vehicles and passenger vehicles. The passenger vehicle is anticipated to be the leading segment due to increasing consumer demand for passenger cars.
Geographically, the market is classified into four major regions- North America, Europe, Asia Pacific, and the Rest of the World.
DRIVING FACTORS
"Subscription-Based Digital Services to Create Lucrative Growth Opportunities"
Many vehicle manufacturers offer their automotive digital services on a subscription basis. For instance, Mercedes Benz utilizes its own MBUX system. Still, the company charges approximately USD 100 for a three-year subscription or a USD 80 annual fee, depending on the region the buyer is situated in. The subscription-based digital services have become efficient with technological advancements. The Over-the-Air update features available on the newer vehicles will augment the automotive digital service market growth. Additionally, the rising internet connectivity on vehicles has further boosted the development of the market. The increasing interconnectedness of cars and technological advancements in ingenious digital services such as the MBUX system is anticipated to fuel market growth in the forthcoming years.
"Favorable Government Regulations & Investments for Road & Vehicle Safety to Propel Market Growth"
The governments of major economies are emphasizing the development of vehicle-to-vehicle (V2V) infrastructure. An interconnected vehicle infrastructure can help manage large fleets of vehicles and help deal with the numerous road transport concerns. The governments are heavily investing in the automotive industry to create solutions to major transportation concerns through technological developments in automotive digital services. Additionally, several nations have introduced various regulations to equip cars with advanced safety features such as Advanced Driver Assist System (ADAS) to enhance road and passenger safety. Moreover, the introduction of successfully tested and driven autonomous vehicles is expected to result in further favorable government regulations and foster growth for the automotive digital services market.
RESTRAINING FACTORS
"Underdeveloped Cloud Infrastructure to Impede Market Growth"
The low internet connectivity isn’t suitable for the effective working of the cloud infrastructure. It also poses a high risk of data confidentiality. The underdeveloped cloud infrastructure is expected to impede the market growth. Additionally, the increasing threat from hackers is anticipated to restrain the growth of the automotive digital systems market.
Automotive Digital Services Market REGIONAL INSIGHTS
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"Increasing Digitization & Internet Penetration to Propel Growth in Asia Pacific"
Asia Pacific is projected to emerge dominant in the global automotive digital services market share. The increasing per capita income levels, expanding automotive industry, and the rising production of vehicles are anticipated to fuel the market growth. The increasing digitization and increasing high-speed internet penetration across countries such as India, China, Japan, and South Korea are expected to foster automotive digital services market growth.
North America is anticipated to attain substantial growth in the global market. Higher-income groups and major business giants in automotive digital services such Apple, Robert Bosch GmbH, and Microsoft are anticipated to boost the market growth. The rising vehicle production due to high consumer demand is expected to surge the growth of the market.
Europe is expected to gain significant growth in the forthcoming years. The rising adoption of electric vehicles such as Tesla augment the demand for innovative automotive digital services and are expected to bolster the market growth. The key players present in the region, such as Mercedes Benz, Audi, and Volkswagen, are likely to complement the growth of the automobile digital services market. Furthermore, the strict rules and regulations regarding vehicles safety are expected to stimulate market growth.
The Rest of the World is estimated to gain considerable growth in the global market. The expanding automotive industry and the increasing demand for luxury vehicles and sports cars are anticipated to augment the market growth.
KEY INDUSTRY PLAYERS
"Major Business Players Launch New Digital Services to Expand Online Sales Services"
As the coronavirus pandemic still wreaks havoc, the fear of contracting the virus remains high, and the consumers prefer to avoid going to the dealerships to buy a car. This has emerged as an opportunity for automakers to introduce digital showrooms and online vehicle buying facilities. The key players in the global market are developing innovative digital service applications for interactive consumer experience. For instance, Kia launched its new Digi-Connect automotive digital service in India in June 2021 to offer its customers contactless online sales services. The new application lets customers hold video conferences with the nearest dealership’s staff.
The key players also focus on inorganic growth strategies such as partnerships, mergers, acquisitions, and collaborations to enhance market positions and generate greater revenue.
List of Key Market Players Profiled
- Uber Technologies
- Daimler
- Bosch
- TomTom
- FEV Group
- MAN
- PCG
- Continental
- Bayerische Motoren Werke (BMW) Group
- Kia
KEY INDUSTRY DEVELOPMENTS:
June 2021: Kia launched its new Digi-Connect automotive digital service in India to offer its customers contactless online sales services.
July 2020: Mercedes Benz launched its digital solutions for customer services under the DSDNxt digital program. The company will share updates regarding service consultations and due dates on WhatsApp through the digital solution.
REPORT COVERAGE
The global automotive digital services market report offers a comprehensive assessment of the market and focuses on key factors, such as components, end-users, applications, and leading companies. Other than this, the report offers vital insights into the ongoing market trends and highlights key industry developments. In addition to the aforementioned factors, the report envisages significant factors contributing to the market’s growth in recent years.
REPORT COVERAGE | DETAILS |
---|---|
Market Size Value In |
US$ 3052.4 Million in 2022 |
Market Size Value By |
US$ 7745.12 Million by 2031 |
Growth Rate |
CAGR of 10.9% from 2022 to 2031 |
Forecast Period |
2022-2031 |
Base Year |
2022 |
Historical Data Available |
Yes |
Segments Covered |
Type and Application |
Regional Scope |
Global |
Frequently Asked Questions
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What value is the automotive digital services market expected to touch by 2031?
Based on our research, the global automotive digital services market is projected to touch USD 7745.12 million by 2031.
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What CAGR is the automotive digital services market expected to exhibit by 2031?
The automotive digital services market is expected to exhibit a CAGR of 10.9% by 2031.
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Which regions are expecting growth?
Asia Pacific, North America, Europe, Latin America, and the Middle East & Africa are the regions that are expecting growth.
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What is the key factor driving the automotive digital services market?
The increasing emphasis on enhanced customer experience is driving the automotive digital services market.
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Which are the top companies operating in the automotive digital services market?
Uber Technologies, Bosch, and TomTom are amongst the major players in the automotive digital services market.