Asia Pacific Internet of Cars - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Asia Pacific Internet of Cars market is anticipated to register a CAGR more significant than 16% during the forecast period (2021 - 2026).

Key Highlights

• Vehicles today are equipped with various electronics and machinery equipment. However, significant technological developments over the last decade have let rise to connected cars come into use today, and it is expected to evolve in the future. Connected cars improve road safety, facilitate anti-theft features, and assist the driver by exchanging critical information between nearby infrastructure and vehicles.
• China is the fastest-growing region for an automotive technology manufacturer. Due to growing affordability, the consumption patterns of the Asia Pacific region are seeing a change. India is a growing technology hub with recent advancements in IoT and telematics, which has enhanced connectivity, communications, and responses that offer infotainment, safety, security, and increased vehicle management to drivers, passengers, and commuters.
• Global production of vehicles prior to COVID-19 was expected to grow from approximately 90-95 million units in 2020 to approximately 110-115 million units by 2025. The production outlook should have shown significant growth from 2021 to 22 as per OICA publications, OEMs, and some governments have taken multiple steps to attract customers.
• Most OEM and Tier I companies have experienced some supply disruptions in the last few months due to the outbreak of COVID-19. Supply chain disruptions obstruct the supply of raw materials and parts, resulting in production delays. Hence, global car production will decline in 2020.

Key Market Trends

The emergence of various technologies such as 5G and AI is expected to boost the demand for Internet-enabled cars

• The enhanced user experience for all connected cars depends on wireless connectivity. Many telecom industry players are developing 5G to increase the safety and efficiency of connected cars.
• According to the International 5G automotive associations, 68% of accidents can be avoided with the upcoming 5G technology. For instance, the EU and South Korea have signed a deal to work together on 5G development, while both have promised USD 782 million and USD 1.5 billion, respectively, in funding for local 5G projects.
• With the increasing use of sensors and other technologies that collect data, AI will be essential to making sense of everything. Some automobiles already use AI for Level 3 autonomous driving, but for the industry to reach Level 5, significant enhancements need to be made to the cars and infrastructure.

China and India Will Hold A Significant Share of the market

• Owing to the increase in the connectivity features in the latest car models, China is likely to lead the market in the Asia Pacific. As the domestic market of China is growing, it will shape the future related car industry with increasing technological advantages in ICT, data processing and platform services, secure industrial investment, and a very dedicated industrial strategy and support from the central government. China's powerful planning agency, the National Development and Reform Commission, expects one in every two new cars sold to be equipped with smart autonomous functions by 2020.
• In developing countries like India, the growth of communication and information technology infrastructures like 5G or 4G LTE will push the demand for connected cars. Also, favorable government policies will increase the growth market owing to the rise in the safety regulations for security & protection and authorization.
• Nowadays, companies such as Maruti Suzuki and Nissan India are collaborating with connected car manufacturers for equipping connecting-car technology and offering additional features in the context of control, convenience, safety and security, and social sharing. As a result, automobiles are to see carmakers offer more technology in their vehicles.

Competitive Landscape

The Asia Pacific Internet of cars market is moderately consolidated with existing players such as Cisco, Google, IBM, AT&T, Verizon, Toyota, Volvo, Tesla Motors. As the demand for connected systems and the Internet of Things are growing in the region, the cars manufacturers are trying to have the edge over their competitors by making joint ventures, partnerships, launching new products with advanced technology. Some of the recent developments include:

• July 2020 - Kia Motors India has revealed that within ten months of its first product launch in India, Internet-connected vehicles have sold over 50,000. The company has surpassed 50,000 activated connected cars on the road, including Seltos and Carnival models. This automaker is the only manufacturer to achieve this feat within just ten months of the first product launch in the country.
• May 2020 - Huawei has partnered with 18 automakers to build a 5G-enabled automotive ecosphere to accelerate the commercialization of the latest 5G technology in the automotive industry. Partnerships include First Automobile Group, Chang'an Automobile, SAIC Motor Corporation, Great Wall Motors, Dongfeng Motor Corporation, Guangzhou Automobile Group, BYD Auto, Chery Holdings, and JAC Motors. As the automotive industry evolves towards enhanced autonomous driving and entertainment capabilities in connected cars, 5G technology is gaining momentum due to the significant benefits of transmission speed, reliability, and low latency.

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