Automakers are equipping vehicles with embedded systems, telematics control units, and wireless connectivity technologies to leverage cloud services. The cloud helps deliver over-the-air updates for vehicle firmware and software, streaming media content and navigation maps, remote diagnostics, and driver assistance features. It allows automakers to personalize the in-vehicle experience based on user profiles and preferences.
The Global automotive cloud market is estimated to be valued at US$ 27.84 Mn in 2024 and is expected to exhibit a CAGR of 6.3% over the forecast period from 2024 to 2031.
Key Takeaways
Key players operating in the Automotive Cloud Market Size are Stoelting Co., Kopf Instruments, NeuroLabware, Harvard Apparatus, and RWD Life Science. Key players are focusing on strategic collaborations and partnerships to expand their cloud connectivity solution offerings. The growing demand for connected vehicles and personalization of in-vehicle services is expected to drive the need for automotive cloud platforms. More automakers are also opting to leverage the cloud for over-the-air updates, remote diagnostics, and data-driven services. The automotive cloud market is witnessing rapid global expansion as automakers target developed as well as emerging markets with their connected vehicle platforms and services.
Market drivers
The major driver boosting the automotive cloud market is the rising adoption of connected vehicles. As vehicles get equipped with advanced telematics and wireless technology, automakers are increasing dependent on cloud solutions to offer features like vehicle diagnostics, navigation and infotainment, performance tracking, and remote operation. This growing demand for connectivity in vehicles has accelerated the need for automotive cloud platforms that support personalized in-vehicle services, remote access, and over-the-air software upgrades.
How current geopolitical situation is impacting Automotive Cloud market growth and future strategies:
The automotive cloud market is witnessing significant changes and challenges due to the ongoing geopolitical uncertainties and tensions across various regions. Many automakers were heavily dependent on critical components sourced from conflict-prone areas like Europe and East Asia for their connected car technologies. However, the supply disruptions caused by the Russia-Ukraine war and lockdowns in China have impacted their just-in-time manufacturing models. This necessitates automotive companies to diversify their sourcing strategies and establish local manufacturing hubs or forge strategic partnerships in politically stable markets like North America to gain supply chain resilience. Similarly, escalating trade conflicts have affected cross-border automotive digital services and mobility solutions between competing economies. To overcome such geopolitical risks in the long run, automakers need to focus on decentralizing their networked cloud infrastructures, adopt edge computing architectures and explore regional data sovereignty and localization strategies to insulate their operations from adverse geostrategic developments. Local content policies across emerging markets also compel them to tailor their connected mobility solutions by integrating with local suppliers and tech startups to accelerate their market access.
Geographical regions where Automotive Cloud market value is concentrated:
North America represents the largest and most valuable market for automotive cloud currently. The region accounts for over 35% of the global market value, primarily driven by the massive in-vehicle connectivity and autonomous vehicle initiatives undertaken by US-based automakers and tech giants. Besides, the widespread adoption of advanced driver-assistance systems, vehicle telematics technologies and strong consumer demand for connected car services also contribute to North America's leading position. Europe stands as the second largest regional market, valued at around 25% of the total, benefiting from the robust digital transformation of its automotive sector into smart, electric and software-defined mobility solutions. Countries like Germany and the UK are major European automotive cloud markets, aided by their significant automotive manufacturing bases and digitization agendas.
Fastest growing region for Automotive Cloud market:
The Asia Pacific region is projected to witness the highest growth in the automotive cloud market during the forecast period. It is estimated that the APAC region will grow at over 8% CAGR until 2031. This exponential growth can be attributed to the rising motorization rates, evolving mobility landscapes and increasing partnerships between automakers, tech companies, and cloud service providers across emerging countries like India, Indonesia, Vietnam, and Thailand. The developing APAC nations present a massive untapped market for connected cars and new-age digital services. Moreover, initiatives like 'Make in India' are incentivizing global OEMs to set up local manufacturing clusters, accelerate R&D investments, and customize mobility solutions by leveraging incumbent automotive cloud ecosystems. These factors are cementing APAC's position as the fastest expanding regional market for automotive cloud technologies over the next decade.
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