Global Connected Car Market Growth, Share, Size, Trends and Forecast (2025 - 2031)

Global Connected Car Market, Segmentation by Service

The Global Connected Car Market has been segmented by Service into Navigation, Remote Diagnostics, Multimedia Streaming, Social Media & Other Apps, OTA Updates, On-Road Assistance, eCall & SOS Assistance, Cyber Security, Remote Operation, Collision Warning, Auto Parking/Connected Parking, Autopilot, Home Integration, Vehicle Management and Asset Tracking.

The services segment within the connected car market is a key driver, encompassing a wide range of offerings designed to enhance the driving experience. Navigation services, for instance, help drivers find the most efficient routes in real-time, while remote diagnostics enable vehicle owners to monitor and address potential issues remotely. Other services such as multimedia streaming, social media apps, and over-the-air (OTA) updates ensure that users have access to the latest entertainment and vehicle software. Safety-focused services like collision warning, on-road assistance, and e-call ensure that connected cars are safer, helping prevent accidents and providing quick responses in emergency situations. Additionally, the evolution of autonomous features like autopilot, connected parking, and vehicle management solutions is creating a more seamless, convenient, and safe driving environment.

The demand for these services is driven by consumer preferences for enhanced convenience, improved safety, and better vehicle performance. These offerings also provide automakers with a competitive edge by allowing them to differentiate their vehicles. Consumers are increasingly looking for connectivity features that help make their driving experience smoother and more enjoyable. With the advent of autonomous technologies, connected car services are further evolving, with vehicles offering more intelligent capabilities, such as remote operation and home integration. These trends suggest that the services sector within the connected car market will continue to grow rapidly as more vehicles become equipped with advanced connectivity features.

Global Connected Car Market, Segmentation by Hardware Type

The Global Connected Car Market has been segmented by Hardware Type into Head Unit, Central Gateway, Intelligent Antenna, Electronic Control Unit, Telematic Control Unit, Keyless Entry Systems and Sensors.

Hardware components play a crucial role in the operation of connected cars, enabling communication between various systems and external networks. The head unit, which serves as the central control interface, is one of the key hardware components, allowing drivers to interact with navigation, entertainment, and vehicle systems. The central gateway and telematic control unit are responsible for managing data communication, while intelligent antennas ensure stable connections across various networks, including 4G, 5G, and DSRC. Electronic control units (ECUs) and sensors play a vital role in the real-time monitoring of vehicle performance and safety, enabling features such as collision warning and lane-keeping assistance. The integration of keyless entry systems further enhances convenience, while sensors in the vehicle help detect obstacles and improve driver awareness.

The demand for these hardware components is driven by advancements in automotive technology and the increasing complexity of connected car systems. As vehicles become more autonomous and feature-rich, there is a growing need for reliable and high-performance hardware. This includes components that enable seamless communication and data transfer between vehicles and external systems. The rise of electric and autonomous vehicles further boosts demand for these advanced hardware components, which are crucial for ensuring that the vehicles can interact effectively with their environment. As automakers seek to develop vehicles that are increasingly connected and autonomous, the hardware segment of the market is expected to continue evolving and expanding.

Global Connected Car Market, Segmentation by Form Type

The Global Connected Car Market has been segmented by Form Type into Embedded, Tethered and Integrated.

Connected car technologies can be implemented in three primary form types: embedded, tethered, and integrated. Embedded systems are directly installed within the vehicle during manufacturing, providing a seamless experience with high levels of security and stability. These systems allow for real-time data exchange and direct connectivity to cloud services, ensuring the vehicle is always connected. Tethered systems, on the other hand, rely on external devices, such as smartphones, to connect to the vehicle’s onboard systems. This form offers greater flexibility and is often less expensive but may be limited by device compatibility and connectivity issues. Integrated systems combine both embedded and tethered technologies, offering a hybrid solution that provides the benefits of both approaches. These systems are gaining popularity as they allow for enhanced features and adaptability in connected cars.

The form type used depends on factors like cost, vehicle type, and the intended user experience. Embedded systems are more commonly found in high-end vehicles with advanced features, as they are more reliable and offer better performance. Tethered systems are often used in vehicles with a more basic level of connectivity, as they offer a cost-effective solution. Integrated systems are favored in vehicles that offer a mix of entry-level and advanced features, providing flexibility and adaptability as consumer demands evolve. The choice of form type has a direct impact on the connectivity experience, influencing factors such as ease of use, cost, and system reliability. As the market for connected cars grows, these form types are expected to continue evolving based on consumer preferences and technological advancements.

Global Connected Car Market, Segmentation by End Market

The Global Connected Car Market has been segmented by End Market into OEM and Aftermarket.

The connected car market can be segmented into OEM (Original Equipment Manufacturer) and aftermarket sectors. OEMs are responsible for designing and manufacturing vehicles with integrated connected car technologies, offering consumers the latest features such as real-time navigation, advanced driver assistance systems (ADAS), and infotainment systems. These vehicles are sold with pre-installed hardware and software, providing a fully integrated experience from the moment the car is purchased. In contrast, the aftermarket sector caters to consumers who wish to add connected car features to existing vehicles. This sector includes third-party solutions like aftermarket navigation systems, telematics, and additional sensors. Aftermarket solutions are particularly appealing to consumers who cannot afford or choose not to purchase new connected vehicles.

OEMs are the primary drivers of the connected car market, as automakers continue to develop and integrate advanced technologies into their vehicles. The aftermarket market, however, offers substantial growth opportunities, particularly in regions where the adoption of new vehicles is slower or where consumers seek to upgrade their older vehicles. As vehicle owners increasingly seek connectivity features, the aftermarket sector will continue to grow, providing services such as retrofitting older vehicles with telematics, infotainment, and safety systems. Both OEM and aftermarket segments are expected to play an essential role in the expansion of the connected car market, as they cater to different consumer needs and preferences.

Global Connected Car Market, Segmentation by Transponder

The Global Connected Car Market has been segmented by Transponder into Onboard unit and Roadside unit.

The transponder segment in the connected car market includes onboard units (OBUs) and roadside units (RSUs), both of which enable communication between vehicles and external infrastructure. OBUs are installed in the vehicle itself and facilitate data exchange with RSUs located along roads, highways, and urban areas. These devices allow for communication between vehicles and infrastructure to enable features like toll collection, traffic management, and vehicle-to-infrastructure (V2I) communication. Onboard units play a crucial role in enabling the vehicle to interact with its environment, improving safety and traffic flow. Roadside units, on the other hand, serve as the infrastructure that communicates with vehicles, facilitating efficient management of transportation networks and ensuring better coordination between vehicles and traffic systems.

The transponder market is driven by the increasing demand for smart cities and intelligent transportation systems (ITS), where OBUs and RSUs form the backbone of communication between vehicles and infrastructure. As governments invest in smart city projects and transportation upgrades, the need for robust vehicle-to-everything (V2X) communication systems will continue to grow. OBUs and RSUs enable a wide range of applications, from toll collection to real-time traffic updates, collision avoidance, and autonomous vehicle operations. As V2X technologies mature, the demand for advanced transponders is expected to increase, driving innovation and growth in this segment of the connected car market.

Global Connected Car Market, Segmentation by Network

The Global Connected Car Market has been segmented by Network into DSRC and Cellular.

The network segment in the connected car market is characterized by two primary communication types: DSRC (Dedicated Short-Range Communication) and cellular networks. DSRC is a specialized communication protocol designed for low-latency, high-priority vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication. It operates on short-range frequencies and is particularly effective in ensuring real-time communication between vehicles, supporting safety features like collision warnings and adaptive traffic management. Cellular networks, particularly 4G and 5G, offer broader coverage and higher data transfer rates, allowing for enhanced infotainment, cloud services, and remote diagnostics. Cellular networks are increasingly being adopted for connected car applications due to their widespread availability, scalability, and ability to support high-bandwidth applications.

The choice between DSRC and cellular networks depends on the specific use case and the type of connected car features being deployed. DSRC is typically favored for applications that require ultra-low latency and real-time communication, such as vehicle safety systems and automated driving. Cellular networks, on the other hand, are better suited for applications that involve large amounts of data, such as media streaming, remote updates, and cloud-based services. As 5G networks continue to roll out, cellular technology is expected to play a significant role in enabling next-generation connected car features, particularly autonomous driving, where fast and reliable communication is essential. The development of both DSRC and cellular communication technologies will be key to realizing the full potential of connected cars and their integration into smarter transportation systems.