Connected Car Market

Growing demand for improved user comfort, safety, and convenience is driving the market growth.

Market CAGR for the connected cars is being driven by the growing demand for improved user comfort, safety, and convenience. The rising incidents of vehicle thefts are gaining the attention of car buyers to a monitoring system that can monitor their vehicles and send timely updates about their geographic locations. The growing adoption of ADAS is anticipated to boost the connected car market. The strict safety norms imposed by the government on automotive manufacturers to produce vehicles with ADAS features are owing to rising concern towards the safety and security of passengers.

The vehicles that are connected to tablets and smartphones and are equipped with internet access, and have the ability to increase their operations at regular intervals are connected cars. Through the network connection, they can share content with a series of devices within and outside the car environment. Radar, LiDAR, and advanced sensors help to share the vehicle's data. The popularity of connectivity has fueled manufacturers to adopt connectivity solutions in their vehicles to expand their automobile sales, and vehicles to perform their tasks similar to computers and smartphones are the expectation from consumers.

The main aim for the manufacturers of the automobiles is to add connectivity solutions to vehicles.

The embedded, tethered, or integrated connectivity solutions are the connectivity that can be provided by a car. There is a rise in the acquiring of cybersecurity solutions in-car safety systems, as data have become vital factors in the automotive industry. The car-owners have begun to equip their vehicles with devices like TravelEyes2, Lojack, and ProScout, to avoid data theft, as these systems send a notification to the owner of the mobile phones, allowing them to lock the car with a single touch.

There is also an increase in the implementation of strict rules to reduce the increasing number of data theft instances.

The applicability of ADAS in vehicles has increased with the rapid adoption of software algorithms, cameras, sensors, processors, and advanced technologies in mapping road obstacles, thus minimizing road fatalities. Thus, driving the Connected Car market revenue.

The Global Connected Car Market Industry is projected to experience remarkable growth, with estimates indicating a rise from 35.2 USD Billion in 2024 to 306.9 USD Billion by 2035. This growth trajectory reflects a compound annual growth rate of 21.76% from 2025 to 2035. Such projections underscore the increasing importance of connected technologies in the automotive sector, driven by consumer demand for enhanced safety, convenience, and connectivity. As automakers continue to innovate and invest in connected car technologies, the market is likely to expand, creating new opportunities for stakeholders across the industry.

The growing adoption of electric vehicles (EVs) is a significant driver of the Global Connected Car Market Industry. As consumers become more environmentally conscious, the demand for EVs equipped with connected technologies is on the rise. Connected features in EVs, such as real-time charging station locators and energy management systems, enhance user experience and promote sustainable driving practices. This trend is expected to contribute to the overall market growth, as the transition to electric mobility aligns with global efforts to reduce carbon emissions. The integration of connected technologies in EVs is likely to redefine the automotive landscape in the coming years.

Government initiatives and regulations are instrumental in shaping the Global Connected Car Market Industry. Many countries are implementing policies that promote the adoption of connected vehicles, focusing on reducing emissions and enhancing road safety. For example, regulations mandating vehicle-to-everything (V2X) communication are becoming more prevalent, encouraging manufacturers to develop compliant technologies. These initiatives not only support environmental goals but also stimulate market growth by creating a favorable regulatory environment. As a result, the industry is likely to witness accelerated advancements in connected car technologies, aligning with global sustainability objectives.

The integration of Internet of Things (IoT) and Artificial Intelligence (AI) technologies plays a pivotal role in the Global Connected Car Market Industry. These technologies facilitate real-time data exchange between vehicles and infrastructure, enhancing overall driving experiences. For instance, AI algorithms can analyze driving patterns to optimize fuel efficiency and predict maintenance needs. As automakers invest in these technologies, the market is projected to grow significantly, with estimates suggesting a rise from 35.2 USD Billion in 2024 to 306.9 USD Billion by 2035. This integration not only improves vehicle performance but also fosters a more connected ecosystem.

The Global Connected Car Market Industry experiences a notable surge in demand for advanced safety features. Consumers increasingly prioritize vehicles equipped with technologies such as automatic emergency braking, lane-keeping assistance, and adaptive cruise control. These features not only enhance driver safety but also contribute to reducing accident rates. As a result, automakers are integrating these technologies into their connected vehicles, thereby driving market growth. The increasing awareness of road safety and regulatory pressures further bolster this trend, indicating a potential shift in consumer preferences towards safer, connected vehicles.

Consumer preferences are shifting towards connectivity and convenience, significantly influencing the Global Connected Car Market Industry. Modern drivers increasingly seek vehicles that offer seamless integration with smartphones and other devices, enabling features such as navigation, entertainment, and remote diagnostics. This demand for enhanced connectivity is driving automakers to innovate and incorporate advanced infotainment systems into their vehicles. As a result, the market is poised for substantial growth, with projections indicating a compound annual growth rate of 21.76% from 2025 to 2035. This trend reflects a broader societal shift towards digitalization and connectivity in everyday life.

By region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North American Connected Car market dominates the market due to the growth of the connected car network. The investment by the key telecommunication companies in developing the capabilities of connected cars and the rising sales of vehicles throughout the region. The US is the largest contributor for the growth of the connected car market in the North American region.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Connected Car Market SHARE BY REGION 2022 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Europe's Connected Car market accounts for the second-largest market share owing to the increase in investment to enable the adoption of cybersecurity in connected cars and the introduction of new advanced technology by the manufacturers. Further, the German Connected Car market held the largest market share, and the UK Connected Car market was the rapid-growing market in the European region.

The Asia-Pacific Connected Car Market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to the increasing manufacturing operations developments related to connected services and the adoption of the 5G network for connected cars. Moreover, China’s Connected Car market held the largest market share, and the Indian Connected Car market was the rapid-growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development in order to spread their product lines, which will help the Connected Car market grow even more. Market participants are also undertaking a various strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the Connected Car industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Connected Cars industry to benefit clients and increase the market sector. In recent years, the Connected Car industry has offered some of the most significant advantages to the automobile industry. Major players in the Connected Car market, including Morris Garage Motor India, Bosch, Maruti Suzuki, Payment24, Airbiguity, Harman International, Continental AG, Daimler AG, General Motors, Hyundai Motor Group, Volvo, Ford Motor Company, Audi, and others, are attempting to increase market demand by investing in research and development operations.

Airbiquity is a leader in automotive telematics and in the delivery of connected vehicle services. The company has developed new software technology and has been building and application of connected vehicle programs for 20 years. They provide commercial, automotive industry customers with a whole range of connected vehicle technologies and services, exceptional integration expertise, and solution hosting flexibility. In April 2022, Airbiquity launched DATAmatic, which is a suite of edge data management solutions to provide the rising demand for services and tools that assists automakers and monetize the data of the connected vehicle.

Airbiquity also announced its collaboration with Renesas, which is the premier provider of advanced semiconductor solutions. The Renesas R-Car S4 system-on-chip and the Airbiquity OTAmatic software management platform are the extended technology integration involved.

Payment24 is an International Fuel Payment Solutions Provider which is based in Cape Town and Berlin. It emphasizes innovative IT research and development projects in the areas of fleet management systems, payment systems, retail solutions, and mobile solutions, providing its solution in over 5 continents. The company provides a bespoke, tailor-made solution for payment transactions that is sensitive to security, speed, accuracy, and real-time reporting. In June 2021, Vehicle Biometric was launched by the company for smart and rapid refueling solutions for connected cars.

The system helps automate fuel approval and payment deduction as the registered vehicles enter the fuel station. This system is expected to significantly minimize the fueling fraud and wastage.