Automotive Communication Technology Market Size, Share, Growth & Industry Analysis, By Bus Module (Local Interconnect Network (LIN), Controller Area Network (CAN), FlexRay, Media-oriented Systems Transport (MOST), Ethernet), By Vehicle Class (Economy, Mid-Sized, Luxury), By Application (Powertrain, Body and Comfort Electronics, Infotainment and Communication, Safety & ADAS, Others), and Regional Analysis, 2024-2031

Automotive Communication Technology Market Size

The global Automotive Communication Technology Market size was valued at USD 7.5 billion in 2023 and is projected to reach USD 14.8 billion by 2031, exhibiting a CAGR of 9% during the forecast period, driven by advancements in-vehicle connectivity and the increasing integration of electronics in modern vehicles.

This growth is due to a surging demand for infotainment systems, advanced driver-assistance systems (ADAS), and vehicle-to-everything (V2X) communication technologies. The rise of electric vehicles (EVs) and self-driving tech fuels the market's growth. These vehicles need advanced communication networks for safety and efficiency.

Also, strict government vehicle safety and emissions regulations are prompting automakers to adopt advanced communication technologies. The rising inclination toward smart, connected vehicles is expected to boost market development, especially in North America and Europe. In addition, 5G technology is anticipated to facilitate automotive communication. It enables faster data transmission and supports real-time apps. This is estimated to aid market growth over the forecast period.

Automotive Communication Technology Market Trends

Three major trends are shaping the automotive communication technology market. First, the rise of autonomous vehicles is boosting the demand for advanced communication systems. Autonomous vehicles need strong V2X communication to interact with their surroundings. This requires reliable networks. This trend may lead to substantial investments in automotive communication tech. In particular, it boosts work on sensor fusion systems, radar, LiDAR, and other key components for self-driving cars.

Second, the rise of electric vehicles (EVs) is impacting the market. According to International Energy Agency, in 2023, about 14 million new electric cars were registered globally, bringing the total number on the road to 40 million, closely reflecting the sales projection from the Global EV Outlook (GEVO-2023). Electric vehicle sales in 2023 were 3.5 million greater than in 2022, representing a 35% year-on-year growth.

EVs need advanced communication systems. These systems manage battery performance, energy distribution, and smart grid integration. The rise in EVs is increasing the demand for communication protocols. These include Controller Area Network (CAN) and Ethernet. They are essential for real-time data exchange in EVs.

Third, the integration of 5G technology into automotive communication systems is gaining momentum. 5G enables faster data transmission, lower latency, and better connectivity. It allows for more reliable, real-time communication between vehicles, infrastructure, and cloud services. This trend supports the rise of connected cars, which are expected to be more common in the coming years. These trends show a rising need for advanced communication tech in cars. It is due to a demand for safer, more efficient, and smarter vehicles.

Automotive Communication Technology Market Growth Factors

Several key factors are bolstering the growth of the automotive communication technology Market. A major factor is the surging adoption of advanced driver-assistance systems (ADAS). ADAS technologies, like lane departure warning and adaptive cruise control, rely on seamless communication between vehicle components to work.

As automakers add these systems to their vehicles, demand for reliable, efficient communication tech is rising. Another significant growth factor is the rising trend of vehicle electrification. Electric vehicles (EVs) need complex networks. They manage power, monitor batteries, and ensure performance. The need for advanced protocols like CAN and LIN is growing due to surging EV adoption. The focus on vehicle safety and new government rules are stimulating market growth.

Governments worldwide are imposing stricter safety standards. They require communication-based safety features in vehicles. These regulations are prompting automakers to invest in new communication tech. They must meet compliance standards and improve vehicle safety.

In addition, the fast rollout of 5G technology is estimated to aid market growth. 5G's low latency and high speed enable real-time communication between vehicles and infrastructure. This facilitates advanced applications such as connected and autonomous vehicles.

Segmentation Analysis

The automotive communication technology Market is categorized into several key segments that influence its development. Among these, the segments by Bus Module, Vehicle Class, and Application are particularly important, as they address the diverse needs of the automotive industry.

By Bus Module

The bus module segment is vital in the automotive communication technology Market. It includes protocols like CAN, LIN, FlexRay, and Ethernet. CAN leads this segment. Its use in vehicles allows efficient communication between microcontrollers and devices. However, Ethernet is rapidly gaining traction, particularly in advanced applications like autonomous driving, where high-speed data transmission is critical. FlexRay is vital in safety-critical systems for its fault tolerance. It is a key part of this segment.

By Vehicle Class

The Vehicle Class segment is crucial. It is bifurcated into Passenger Cars, Light Commercial Vehicles (LCVs), and Heavy Commercial Vehicles (HCVs). Passenger Cars dominate the market. There is high demand for connected and autonomous vehicles in this segment. The use of communication tech in LCVs and HCVs is rising. This is due to the need for fleet management, advanced safety systems, and telematics. Demand for better communication systems is expected to grow owing to the rising popularity of EVs. These systems manage power distribution and improve connectivity.

By Application

Application-based segmentation encompasses use cases for automotive communication technologies. These include Powertrain, Infotainment, Safety and ADAS, Body Control, and Telematics. Safety and ADAS applications are growing rapidly. This is attributed to the rise of advanced driver-assistance systems in vehicles. Infotainment systems also play an important role. Consumers are more inclined to more connected, interactive experiences. There is a demand for real-time vehicle tracking, diagnostics, and fleet management, leading to increased popularity of telematics.

Automotive Communication Technology Market Regional Analysis 

The Automotive Communication Technology Market shows varied growth across regions. This is due to differences in tech adoption, regulations, and consumer demand. North America is a dominating market. The regional market prioritizes vehicle safety and technology adoption. Major automotive manufacturers are also present. The U.S. is leading in adopting advanced communication technologies.

In the United States, new electric car registrations reached 1.4 million in 2023, up more than 40% from 2022. Government initiatives promote connected and autonomous vehicles. In 2023, North America captured about 35% of market share. This dominance continues as the region invests in 5G and smart transport.

Europe is a key market for automotive communication tech. Stringent safety rules and a push to cut carbon emissions support this development. Germany, the UK, and France are leading in advanced vehicle communication systems, which is evident in electric and autonomous vehicles. The EU's push for vehicle safety and eco-friendliness is boosting innovation in communication tech. In 2023, it held a 30% market share. The need for reliable networks in EVs and smart vehicles is anticipated to bolster growth.

The Asia-Pacific automotive communication technology market is experiencing rapid growth , propelled by the surging demand for connected vehicles and the widespread adoption of EVs. China, Japan, and South Korea are at the forefront of this growth. China leads, as a result of its thriving automotive industry and strong support for electric and self-driving vehicles. In 2023, Asia-Pacific accounted for approximately 25% of the global market share, with expectations for significant growth as the region continues to invest in 5G infrastructure and smart city initiatives.

Latin America and the Middle East & Africa are emerging markets. Growth is fueled by rising vehicle ownership and a gradual shift to advanced automotive tech. While these regions currently hold a smaller market share, they are expected to witness steady growth as automotive communication technologies become more accessible and affordable. These regions are likely to see higher demand for communication technology. Their automotive sectors are expanding. They are also implementing regulations to improve vehicle safety and emissions.

Competitive Landscape

The competitive landscape of the Automotive Communication Technology Market is characterized by the presence of several key players who are driving innovation and shaping the market's direction. Companies such as NXP Semiconductors, Robert Bosch GmbH, and Texas Instruments dominate the market, accounting for a significant share due to their strong portfolios in automotive communication solutions. These companies are focusing on developing advanced communication protocols, such as CAN, LIN, and Ethernet, to meet the growing demand for connected and autonomous vehicles.

Additionally, strategic partnerships, mergers, and acquisitions are common in this market as companies seek to enhance their technological capabilities and expand their market reach. The competition is intensifying as new entrants bring innovative solutions to the market, challenging established players and driving further advancements in automotive communication technology.

List of Key Players in Automotive Communication Technology Market

• Robert Bosch GmbH
• Broadcom
• STMicroelectronics
• Analog Devices Inc.
• NXP Semiconductors
• Texas Instruments Incorporated
• Toshiba Corporation
• ROHM CO. LTD.
• Infineon Technologies AG
• Melexis

Key Industry Developments

The automotive communication technology market has witnessed several notable developments in recent years. In 2023, NXP Semiconductors announced the launch of its new S32G3 vehicle network processor, designed to enhance in-vehicle communication and support the growing complexity of automotive networks. This processor is expected to play a crucial role in enabling advanced driver-assistance systems (ADAS) and autonomous driving technologies.

Another significant development occurred in 2023 when Robert Bosch GmbH expanded its portfolio by acquiring a leading automotive Ethernet solutions provider. This acquisition is aimed at strengthening Bosch's position in the automotive communication market, particularly in the area of high-speed data transmission for connected and autonomous vehicles.

Additionally, Texas Instruments introduced its latest automotive communication transceiver in 2023, which offers improved data rates and reliability for in-vehicle networks. This transceiver is designed to support the growing demand for high-speed communication in electric and autonomous vehicles, further solidifying Texas Instruments' position as a leader in the automotive communication technology market.

These developments highlight the ongoing innovation and investment in automotive communication technologies, driven by the need for advanced, reliable, and high-speed communication solutions in modern vehicles.

The global Automotive Communication Technology Market is segmented as:

By Bus Module

• Local Interconnect Network (LIN)
• Controller Area Network (CAN)
• FlexRay
• Media-oriented Systems Transport (MOST)
• Ethernet

By Vehicle Class

• Economy
• Mid-Sized
• Luxury

By Application

• Powertrain
• Body and Comfort Electronics
• Infotainment and Communication
• Safety & ADAS
• Others

By Region

• North America
• U.S.
• Canada
• Mexico
• Europe
• Germany
• UK
• France
• Italy
• Spain
• Russia
• Rest of Europe
• Asia-Pacific
• China
• Japan
• India
• South Korea
• Rest of Asia-Pacific
• Middle East & Africa
• GCC
• South Africa
• North America
• Rest of Middle East & Africa
• Latin America
• Brazil
• Argentina
• Rest of Latin America