Asia Pacific Connected Car Market Outlook to 2030

Asia Pacific Connected Car Market Overview

• The Asia Pacific Connected Car Market was valued at USD 25.30 billion in 2023. The growth is driven by the increasing adoption of advanced technologies in the automotive industry, the rise of electric vehicles, and the demand for enhanced driving experiences.
• The market is dominated by several key players are Toyota, Hyundai Motor Company, Honda, Nissan, and Tata Motors. These companies have been investing heavily in R&D to enhance connected car technologies and expand their market presence across the region.
• The partnership between Toyota and NTT Communications in 2023 to enhance connected car services. This partnership aims to leverage NTT's communication technology to improve vehicle data transmission efficiency, thereby enabling better navigation, safety, and infotainment services.
• China is currently the dominant player in the market, due to the country's large automotive market, significant government support for smart vehicle technologies, and the rapid adoption of electric vehicles. The Chinese government's focus on becoming a global leader in connected and autonomous vehicles has positioned the country as a key hub for innovation in this sector.

Asia Pacific Connected Car Market Segmentation

The market is segmented into various factors like connectivity type, application, and region.

By Connectivity Type: The market is segmented by connectivity type into embedded, tethered, and integrated connectivity. In 2023, Embedded Connectivity held the largest market share due to the growing preference for factory-installed solutions that offer seamless integration with vehicle systems and enhanced reliability.

By Application: The market is segmented by navigation, infotainment, safety and security, and vehicle management. In 2023, Safety and Security was the leading segment with the increasing focus on enhancing vehicle safety features, such as advanced driver-assistance systems (ADAS) and real-time traffic alerts, has driven the growth of this segment.

By Region: The market is segmented by China, South Korea, Japan, India, Australia, and Rest of APAC. In 2023, China led the market due to its massive automotive industry, strong government backing, and rapid adoption of connected and electric vehicles, positioning it as the region's innovation hub.

Asia Pacific Connected Car Market Competitive Landscape

• Hyundai Motor Company: In 2023, Hyundai announced a partnership with South Korea's SK Telecom to develop 5G-based connected car services. This collaboration aims to create a more seamless driving experience by integrating high-speed communication technologies with vehicle systems. The partnership highlights the growing trend of automotive companies collaborating with tech firms to advance connected vehicle technologies.
• Honda Motor Co., Ltd.: Honda introduced a new AI-powered in-car assistant in 2023, capable of providing personalized driving recommendations and real-time traffic updates. This innovation is part of Honda's broader strategy to enhance the user experience in its connected vehicles. The AI assistant has been well-received, in Japan with its launch.

Asia Pacific Connected Car Market Analysis

Market Growth Drivers

• Expansion of 5G Networks: The deployment of 5G networks across the Asia Pacific region is a growth driver for the connected car sector. In 2024, over 600 million people in Asia Pacific are expected to have access to 5G services, enabling faster and more reliable communication between vehicles and infrastructure. This is crucial for the development of real-time data transmission and autonomous driving features, driving the adoption of connected cars.
• Rise in Electric Vehicle Sales: The increasing demand for electric vehicles (EVs) is propelling the connected car market. Asia-Pacific region will account for11.18 million EVsin 2024, which represents about66% of total global EV shipmentsexpected to reach16.84 millionunits worldwide. The integration of connected technologies in EVs enhances the user experience, further driving market growth.
• Growing Consumer Demand for Safety Features: The demand for enhanced safety features in vehicles is rising, with consumers increasingly seeking cars equipped with advanced driver assistance systems (ADAS) and real-time traffic alerts. In 2024, it is expected that over 30 million vehicles in the Asia Pacific will be equipped with some form of connected safety feature, reflecting the growing consumer preference for safer driving experiences.

Market Challenges

• Infrastructure Development Lagging Behind: While smart infrastructure is crucial for the success of connected cars, many regions in Asia Pacific are still lagging in terms of necessary infrastructure development. In 2024, only about 60% of major highways in India are expected to be equipped with intelligent transport systems (ITS), which are essential for the functioning of connected vehicles. This infrastructure gap presents a significant challenge to market growth.
• High Costs of Connected Car Technologies: The development and implementation of connected car technologies are expensive, with the average cost of integrating advanced connectivity solutions into vehicles. This high cost can be prohibitive for mass adoption, especially in emerging markets within the Asia Pacific region, where price sensitivity is higher.

Government Initiatives

• Chinas Intelligent Vehicle Development Strategy: In 2024, the Chinese government is expected to continue its strong support for the market through its Intelligent Vehicle Development Strategy, which includes plans to install over 200,000 smart traffic signals across major cities. This initiative is part of Chinas broader push to lead in the global connected and autonomous vehicle space, boosting the market.
• South Koreas Smart City and Autonomous Vehicle Initiative: South Korea's overall budget for research and development in 2024 totals USD 4.4 billion, which include its smart city initiative, the development of infrastructure for autonomous and connected vehicles. The governments focus on creating a conducive environment for the deployment of these technologies is expected to accelerate market growth.

Asia Pacific Connected Car Market Future Outlook

The future trends in the Asia Pacific connected car industry include the rise of autonomous connected vehicles, the growth of Vehicle-to-Everything (V2X) communication technologies, the expansion of subscription-based connected car services, and the integration of advanced cybersecurity measures to protect against potential threats.

Future Market Trends

• Growth of Vehicle-to-Everything (V2X) Communication: The future of the market will be heavily influenced by the growth of V2X communication technologies. By 2028, it is anticipated that more than 80% of new vehicles in Asia Pacific will be equipped with V2X systems, enabling real-time communication with infrastructure, pedestrians, and other vehicles, significantly enhancing road safety and traffic management.
• Integration of Advanced Cybersecurity Measures: As connected car technologies evolve, the need for robust cybersecurity measures will become increasingly critical. By 2028, it is expected that all major automakers in Asia Pacific will implement advanced cybersecurity protocols in their connected vehicles, ensuring data privacy and protection against cyber threats. This will be a key factor in gaining consumer trust and driving market adoption.