As reliance on smart technologies continues to increase, the demand for advanced features will persist high among both commercial and passenger vehicles. On this premise, the 5G technology has penetrated the automotive sector and it is expected to revolutionize the consumer experience in the years to come, thus creating a massive opportunity for the market.
The trend of integrating internet services in automotive applications has been gaining traction in developing economies in the recent past. The number of vehicles with connection to cellular networks that offer features - such as real-time navigation, infotainment, and emergency services - is growing year-on-year. Moreover, the integration of 5G in automotive and smart transportation applications is anticipated to facilitate advanced features such as autonomous driving and vehicle-to-vehicle communication, to name a few.
It is estimated that nearly 70% of light-duty vehicles and trucks will have a connection to the internet by 2023. This opens a gargantuan revenue opportunity for players operating in the 5G automotive and smart transportation market to capitalize on
Increasing Emphasis on Road Safety
According to the Association for Safe International Road Travel (ASIRT), road traffic crashes lead to the death of 1.35 Mn people each year with middle-income countries registering a higher fatality rate than high-income countries. Although the Asia Pacific holds a relatively lower percentage of vehicles, the World Bank estimated that the region witnesses nearly 2,000 mortalities each day due to road accidents, and the numbers continue to surge year-on-year. While road safety norms and speed limit guidelines have been in place for years, they do not seem to make a drastic difference.
As a result, the installation of efficient navigation and communication systems backed by 5G technology is expected to emerge as an ideal solution to curb road accidents. 5G in automobiles facilitates communication between vehicles through a consistent flow of data between them, thus subsequently lowering the risk of a road crash. The telematics and smart sensors, which are the major advantages of 5G technology, enable the C-2VX (vehicle-to-everything) framework and create a communication path between vehicles, drivers, and monitoring stations.
Empowered by 5G, these sensors utilize the images transmitted by a vehicle-mounted camera for advanced processes such as image processing and machine learning to analyze road-traffic behavior in real-time. The data collection and analysis helps drivers in making decisions. Moreover, these sensors enable several features such as automatic braking, autonomous driving, and blindspot detection, among others, which collectively help in lowering the incidence of road accidents.
On a broader spectrum, all the aforementioned facets aid in improving the flow of traffic and alleviating the difficulties associated with traffic management. This is expected to give a boost to the transportation sector by reducing the commuting times. On the back of these factors, the 5G technology is set for healthy adoption in automotive and smart transportation.
Automotive Players Opting for 5G
The high speed and reliability of 5G are expected to remain the crucial growth attribute to the market through the forecast period. With multimedia no longer considered a luxury during travel, the need to ensure uninterrupted audio, video, and browsing services is increasing among passenger-transport service providers, especially in long-distance routes. As a result, 5G is expected to gain prominence owing to the exponentially high upload and download rates it offers.
The high speed, instantaneous communication, and increased reliability are collectively enhancing the consumer experience and has encouraged the manufacturers to add multimedia features in their vehicles.
In addition to the demand-side advantages, 5G technology is bestowing numerous supply-side advantages by improving the productivity of manufacturing plants. For instance, several automotive brands, including the names of Mercedes-Benz cars and BMW Brilliance Automotive, have announced the implementation of 5G technologies in their production facilities. The move is expected to boost the speed, efficiency, and overall transformative productivity on the manufacturing side.
As automotive market players continue to seek advanced methodologies to enhance production efficiency, 5G will remain highly sought-out on the supply side for the years to come.
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High Cost & Cybersecurity Threats: Key Challenges
Although the advent of autonomous driving and connected cars will minimize physical theft, it is giving rise to cybersecurity threats. As 5G technology integrates the vehicle's functionality with the internet, there is a high risk of exploitation through cellular networks and WiFi. Besides, the vehicle-to-everything option possesses a high risk of hacking and unauthorized access owing to the easy accessibility of data, making it highly vulnerable to swindling. To mitigate the challenges, automotive manufacturers are seeking collaborations with organizations such as the National Highway Transportation and Safety Administration (NHTSA) and network providers.
On the other hand, the high cost is a cause of concern for both consumers and manufacturers. The integration of communication technologies raises the expenses incurred during the production phase, which consequently transmute into the high selling price and Total Cost of Ownership (TCO).
For instance, Senturion, a player specialized in developing vehicle keys, launched a wearable digi-key solution that operates on Radio Frequency Identification (RFID) technology to establish communication between the car and the key. The feature, which is also adopted by several leading manufacturers including Bugatti, Ferrari, Bentley, Lamborghini, and McLaren, among others. Although it improves safety and reliability, it significantly increases the purchasing cost, thus limiting the growth to an extent.
North America 5G in Automotive and Smart Transportation Market
North America is forecasted to maintain hegemony over the regional landscape, outpacing other major regions. The primary factor attributing the region's dominance is the high number of cars in the region coupled with the growing preference among consumers towards connected cars. Moreover, it is expected that the proportion of connected vehicles in the US is expected to cross 90% by 2023, opening growth avenues for manufacturers.
The region's growth is also favored by the presence of tech giants such as Intel and Qualcomm. The aforementioned companies are collaborating with automotive players to develop innovative digital radio and antenna architectures that are compatible with 5G frequencies. Their semiconductors and other tools are helping autonomous vehicles to function as mobile data centers, and are enabling driverless vehicles to make real-time decisions. Backed by these factors, North America will prevail as the largest regional market for 5G in automotive and smart transportation.
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East Asia 5G in Automotive and Smart Transportation Market
Closely tailing North America is East Asia, which is poised to remain the second most lucrative region for the years to come. The growth of East Asia is majorly attributed to the presence of a thriving automotive industry in China, which prevails as the leading automobile producer in the world.
The revenue of the 5G in automotive and smart transportation is expected to remain concentrated in China through the forecast period as vehicle sales continue to rise year on year. Although the region experienced a slump in sales in the first and second quarter of 2020, due to the outbreak of COVID-19, the automotive industry is on a road to recovery and a complete revamp is clearly in sight.
The China Association of Automobile Manufacturers stated that the sales of passenger cars and commercial vehicles increased 11% in June as compared to the previous year, indicating a positive trajectory. Moreover, collaboration with private entities such as Tencent, Baidu, and Alibaba for government-sponsored projects to integrate 5G in numerous applications, including automobiles, will bolster the growth of the 5G in the automotive and smart transportation market.
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Europe 5G in Automotive and Smart Transportation Market
Among the major regions, Europe is poised to expand at a faster pace during the assessment period backed by unanimous support by governments to develop the industry using 5G technology. In July 2019, 21 out of the 28 European Union (EU) nations voted against European Commission's plan to shut out 4G/5G cellular communications as an option for vehicle-to-everything. The move has been crucial in cementing Europe's position as a prominent region.
European governments are focusing on improving road safety by enabling communication between traffic elements, such as cars, roadside infrastructures, and networks. On these lines, support from the government is encouraging automotive manufacturers to advance 5G to improve the safety and efficiency of vehicles. This will continue to drive the demand for 5G in automotive and smart transportation applications.
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Hardware Components Emerge Dominant
Among solutions, hardware components are expected to remain the most sought out solutions. It is expected to account for nearly 2/3rds of the global market share by the end of 2030. Delving into hardware components, Onboard Units (OBUs) are forecasted to register the highest sales.
The demand for OBUs is attributed to owing to their capability to deliver a full suite 5G network for precise positioning of the vehicle in the vehicle-to-everything applications.
Fleet Management Holds Lead
By application, fleet management is projected to account for a share little below 3/5th of global value, owing to high demand among commercial vehicles. Transportation and trading companies, including cab-services such as Lyft and Uber, are finding the 5G technology revolutionary in the fleet management and maintenance processes.
The process of tracking parameters - such as geo-location, fuel efficiency, distance traveled, and comprehensive performance - of vehicles has been simplified with the advent of 5G. On the back of these factors, fleet management will remain the most lucrative application for 5G in automotive and smart transportation.
Automotive and Defense Industries Exhibit High Demand
On the basis of industries, automotive and defense industries are anticipated to channel 3/4th of overall market value. The plethora of benefits associated with 5G during production and in improving driving and riding experience will continue to fuel the adoption in the automotive sector.
On the other hand, 5G has emerged as a game-changer in the defense sector with the 5G-enabled autonomous driving feature being the primary factor driving demand in the sector.
Market players are closely monitoring the movements of automotive manufacturers to capitalize on their demand. For instance, General Motors announced its plans to launch 5G-connected vehicles in China starting from 2022, thus opening a wide window for market players to leverage. Likewise, service providers and automotive manufactures are focusing on spreading their wings to Europe and East Asia. On these lines, BMW Group is setting up private 5G networks at its manufacturing plants in Germany.
Moreover, major automotive manufacturers and network providers including Robert Bosch GmbH, BMW AG, Deutsche Telekom AG, and Nokia, among others, are taking part in the 5G NetMobil project. The 5G NetMobil project is coordinated by Robert Bosch GmbH with an aim to find solutions for key challenges in automotive real-time communication. The project is expected to yield fruitful results pertaining to smart traffic control while also improving the fleet management of commercial vehicles.
5G in Automotive and Smart Transportation Market Report: Scope
Historical Data Available
USD Million for value
Key Regions Covered
North America, Europe, East Asia, and Rest of the World (Southeast Asia and Pacific, Latin America, and Middle East and Africa)
Key Countries Covered
US, Canada, Germany, U.K., Rest of Europe China, Japan, South Korea
Key Segments Covered
Material, Application, End User, and Region
Key Companies Profiled
AUDI AG; BMW AG; Robert Bosch GmbH; Deutsche Telekom AG; Telefonaktiebolaget LM Ericsson; Huawei Device Co., Ltd.; Daimler AG; Nokia; Qualcomm Technologies, Inc.; Telefónica S.A.; Verizon; Vodafone Limited; and Volkswagen
Market Forecast, brand share analysis, competition intelligence, DROT analysis, Market Dynamics and Challenges, Strategic Growth Initiatives
Customization & Pricing
Key Questions Answered by the Report
- What is the size of 5G in the automotive and smart transportation market?
The global 5G in automotive and smart transportation market is expected to reach a valuation of US$ 9,500 Mn.
- Which is the largest market for 5G in automotive and smart transportation market?
North America currently leads the 5G in automotive and smart transportation market and is expected to remain dominant through the course of the forecast period
- Which are the top companies in 5G in automotive and smart transportation market?
Key player operating in the market include AUDI AG, BMW AG, Robert Bosch GmbH, Deutsche Telekom AG, Telefonaktiebolaget LM Ericsson, Huawei Device Co., Ltd., Daimler AG, Nokia, Qualcomm Technologies, Inc., Telefónica S.A., Verizon, Vodafone Limited, and Volkswagen
- Which industry is expected to channel the majority of revenue to 5G in automotive and smart transportation market?
The automotive industry is expected to channel the majority of revenue to the 5G in the automotive and smart transportation market through the forecast period.
- What is the outlook on 5G in automotive and smart transportation market?
The growth of the 5G in automotive and smart transportation market is majorly driven by increased demand for advanced features in automobiles from both the demand and supply side, coupled with penetration of 5G into the manufacturing sector.
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5G in Automotive and Smart Transportation Market Segmentation
- Hardware Components
- Telematics Control Units (TCUs)
- Roadside Units (RSUs)
- Onboard Units (OBUs)
- Software Solutions
- Consultation Services
- Integration and Installation Services
- Maintenance and Support Services
- Vehicle-to-Everything (V2X)
- Infotainment and Telematics
- Fleet Management
- Transportation Infrastructure (Highways etc.)
- Warehousing and Logistics
- Public Safety
- North America
- East Asia
- Rest of the World