India Connected Car Market

India Connected Car Market Size (2024 to 2029)

The global India-connected car market size is expected to reach USD 20.88 billion in 2024 and reach USD 55.16 billion by 2029, growing at a CAGR of 21.45% from 2024 to 2029.

CURRENT SCENARIO OF THE INDIA-CONNECTED CAR MARKET

Offering internet accessibility in cars is imminent as customers want an array of real-time services, like on-demand infotainment and traffic navigation alongside safety and security measures. With the advancement in machine-to-machine communication, it's now possible to leverage telematics to deal with a heap of knowledge to assess risks and advantages for both customers and OEMs.

The demand for wireless technologies, like Wi-Fi, Bluetooth, LTE, 3G, and HSPA+, is growing within the automotive industry. Wireless connectivity is clearly surpassing wired connectivity because of the new applications associated with connected cars that specialize in supporting cellular communications and mobile devices.

The key factor driving the expansion of the Indian connected car market is the increase in the number of related features in economy vehicles by OEMs.

 Additionally, a rise in vehicle legislation and industry compliances regarding convenience features, like navigation, remote diagnostics, and multimedia streaming through different platforms like Android Auto, CarPlay, and MirrorLink, are driving the Indian market. The new safety norms are cheering automakers to equip the vehicles with safety & security-connected features, which successively is hiking the demand for connected cars in this nation.

On the other hand, the absence of robust network infrastructure in India poses a challenge to the expansion of the connected car business.

MARKET DRIVERS

The increase in the number of related features in economy vehicles by OEMs is a key factor driving the expansion of the India-connected car market.

The pattern is supported by technological advancements, the rise of electric vehicles, government initiatives and schemes, growing exports, and better credit availability. Companies are incorporating modern features into economy cars like side view assistance, automatic breaks for early collision alerts, inbuilt internet connectivity, different drive modes, safety technologies, infotainment systems, and driver-assist systems attracting customers and providing better experiences. Also, the increase in income of middle-class as well as younger people is creating a strong demand for connected cars in the country. For instance, close to 2328329 units of two-wheelers, passenger vehicles, and three-wheelers were manufactured in January 2024. Among those, passenger vehicles witnessed the greatest revenue generation in the same month, with 14 percent growth.

Additionally, the rise in vehicle legislation and industry compliances regarding convenience features like navigation, remote diagnostics, and multimedia streaming through different platforms like Android Auto, CarPlay, and Mirror Link are expanding the Indian market. The new safety norms are cheering automakers to equip the vehicles with safety & security-connected features, which successively is hiking the demand for connected cars in this nation.

MARKET CHALLENGES

The absence of robust network infrastructure poses a challenge to the expansion of the India-connected car market.

There is a lack of proper infrastructure and skilled laborers, and high tariffs and taxes are specifically hurting the market growth. Apart from this, the legal and regulatory changes and burdens are also decreasing the pace at which the industry grows. And, combined with the shifting consumer choices makes the Indian market one of the hardest ones to compete. Currently, there is growing traction towards hybrid and electric vehicles which is an obstacle to automotive manufacturers since they have a long past of making petrol and diesel cars Whereas the foreign car companies after making necessary changes to suit Indian driving coupled with the integration of modern technologies and fuel system struggle to keep the prices low and attractive.

Also, the disruption in the supply chain and shortage of semiconductor chips have further worsened the market situation with waiting times as long as a year or more. The companies in the country are unable to meet the orders which is decreasing the market growth rate. Furthermore, the rising input cost of aluminum and steel around the world has also affected this industry. To make things clear, in 5 years there is a 50 per cent surge in the average selling price of passenger vehicles. At last, the Indian automobile sector depends on a wide range of laws regarding emissions, energy efficiency, and safety, which further complicates the matter for companies.

Impact of COVID-19 on the India-Connected Car Market

India's connected car market growth is derailed by COVID-19. It continues to suffer from the economic impacts of the pandemic. During the crisis, only 3500 car dealerships or franchises were functional throughout the country. Even after relaxing the lockdown restrictions in the third phase, the volume of operation vendors remained low. In reality, more than fifty percent of these just used their service center facilities. As per the Federation of Automobile Dealers Associations (FADA), even amid lockdown 3.0, on the given date, only 20 percent of the overall network was opened, i.e., 3500 stores. On the contrary, today, more than 15000 automobile franchises have 25000 dealerships, which also includes 30 state, city, and regional level Associations of Automobile Dealers. This comprises 90 percent of the entire Indian market share. Additionally, the government had also started multiple initiatives, schemes, etc., for free food distribution to a huge section of society, along with granting financial assistance to small and medium businesses for recovery. All this forced the authorities to maintain the high taxes, tariffs, and other duties on cars, and it continues now as well. Thus, COVID-19 severely affected the India-connected car market but also paved the way for EVs, hybrids, and internet-based cars.

REPORT COVERAGE

SEGMENTAL ANALYSIS 

India Connected Car Market By Platform

The key factor driving the expansion of the market is the increase in the number of connected features in economy vehicles by OEMs. The rise in the adoption of more convenient features, like navigation, remote diagnostics, and multimedia streaming, promotes the use of various platforms like Android Auto, CarPlay, and MirrorLink, thereby promoting the development of the India-connected car market.

India Connected Car Market By Connectivity Form Factor

The embedded form is predicted to be the most essential and fastest-growing form factor for connected cars in India during the foreseen period. One of the key drivers burgeoning the embedded segment is the surge in demand for infotainment and navigation services in vehicles in India. The Indian government has also started implementing several mandates for connected services.

India Connected Car Market By Hardware

The ECU and sensors are likely to register the highest growth rate and revenue in the local market in the coming years.

REGIONAL ANALYSIS

India's connected vehicle market is predicted to point out a double-digit rate of growth in the foreseen years. Consumers in this nation are increasingly emphasizing in-car technology instead of the worth or engine performance when it involves buying a car, and 40% are willing to vary brands for better connectivity. 

India's connected vehicle market is predicted to register a double-digit growth rate in the coming years. Consumers in the country are increasingly emphasizing in-car technology and engine performance, but less on worth to some extent, and 40% are willing to vary brands for better connectivity. Also, it holds a strong place in the heavy vehicles market worldwide because it is the third-largest maker in this category, 2^nd biggest producer of buses, and the largest manufacturer of tractors. Besides this, multiple policies and initiatives by the Indian government, like the scrappage policy, the Automotive Mission Plan 2026, and the production-linked incentive scheme, are projected to place this market as the world leader in four and two-wheelers. Moreover, the rising influx of cumulative equity FDI of around 35.65 billion dollars between April 2000 and December 2023. And it is on the right course to establish itself as the largest electric vehicle industry by 2030, with overall investment prospects of more than 200 billion dollars in the coming 8 to 10 years. Furthermore, the buyers are also purchasing cars with inbuilt internet and other connected features. Companies like BYD and Morris Garages are actively launching internet-based SUVs and mini-SUVs. Additionally, the country has also registered growth in luxury cars in recent years. For example, 1340 premium cars were sold by BMW in January 2024 which made it the highest in the category. At the same time, Mercedes-Benz was able to sell 1333 cars. Therefore, considering all the factors, the India-connected car market will thrive in the future.

KEY PLAYERS IN THE INDIA-CONNECTED CAR MARKET

Honda Motor Company, Toyota Motor Corporation, Hyundai Motors, General Motors (U.S.), Ford Motor Company (U.S.), Audi (Germany), BMW (Germany), Mahindra and Mahindra (India), Tata Motors (India) and Maruti Suzuki India (India) are some of the major key players involved in the India-connected car market.

RECENT HAPPENINGS IN THE INDIA-CONNECTED CAR MARKET

• The $20.7 billion Mahindra Group and US car major Ford Motor Company on Wednesday signed two definitive agreements on gearing and connected car solutions to secure their ongoing strategic alliance discussion in India that began in late 2017. 
• Electric vehicles, petrol engines, and connected vehicles are going to be among the key technology focus areas for Mahindra & Mahindra in the wake of adjusting business landscape, the corporation has said. 
• Tata Elxsi, the planning and technology services firm, a Tata group company has introduced a partnership with Tata Motors to build a unified, connected vehicle platform that will power the Nexon EV range of electric cars. 
• Motors and Microsoft India have announced a strategic agreement to redefine connected and personalized driving experiences for Indian consumers. Tata Motors will leverage Microsoft's connected vehicle technologies that compile AI (AI), advanced machine learning, and therefore the Internet of Things (IoT) capabilities on the regional hyper-scale Azure cloud to traverse the digital and physical worlds and make a highly personalized, smart and safer driving experience across the digital life of a vehicle owner. 

DETAILED SEGMENTATION OF THE INDIA-CONNECTED MARKET INCLUDED IN THIS REPORT

This research report on the India connected car market has been segmented and sub-segmented based on the application, platform, connectivity form factor, hardware, connectivity technology, and region. 

By Application

• Telematics
• Ridesharing/Hailing
• Others (OTA Updates, Safety & Security, Autonomous Driving)

By Platform

• Android Auto
• Carplay
• Mirrorlink
• Others

By Connectivity Form Factor

• Embedded
• Tethered
• Integrated

By Hardware

• Smart Antenna
• Display
• Electronic Control Unit (ECU)
• Sensors

By Connectivity Technology

• Cellular
• Dedicated Short Range Communication (DSRC)