Augmented Reality Automotive Market

Augmented Reality Automotive Market Size (2023-2028):

The Global Augmented Reality Automotive Market was worth US$ 1.2 billion in 2022 and is anticipated to reach a valuation of US$ 14.4 billion by 2028 and is predicted to register a CAGR of 18.1% during 2023-2028.

Market Overview:

Augmented reality is a bridge between humans and machines and assists in Human Machine Interaction (HMI). Augmented reality has grown significantly in recent years and has applications in almost every segment of human life. AR technology in the automotive industry has various applications like smartphone applications and AR Heads Up Displays (HUD). Augmented Reality comprises of technique in which virtual components are superimposed into the real world to create an illusion. 

Market Drivers:

Original Equipment Manufacturers are rapidly shifting to Augmented Reality to give an enhanced driving experience that is prompting market shares. AR can be used to provide entertainment as well as navigation in the vehicle. 

Consumer awareness has led to an increase in demand for augmented reality’s implementation in automotive. Safety is the major reason for the rising demand for AR technology in vehicles. AR technology is capable of warning the driver about the potential threats on the streets over a limited distance by analyzing using the sensors. The demand from consumers propels the augmented reality automotive market growth.

The Advanced Driver Assistance System generates real-time data to assist the driver. AR technology presents the data in a format that is easy to understand. For instance, traffic jams, lane departure, and other such warnings are given to drivers on the screen to assist. The implementation of ADAS can drive the augmented reality automotive market demand.

Market Restraints:

The high cost of development is majorly restricting the growth rate of the market. The augmented reality technology is difficult to implement and requires specific hardware and software to use efficiently. The development and implementation of AR technology as per the form factor of the vehicle is a challenging task, and thus, many automobile manufacturers restrain from providing AR technology in vehicles and provide other features.

Growing security concerns are likely to hamper the augmented reality automotive market value. Augmented reality system collects a lot of information regarding the consumers, which includes location, speed of the car, and also some personal information. This information can be misused if it gets leaked. This raises the issue regarding the user's privacy. This concern about privacy and security can be a restraint for the augmented reality automotive market.

Lack of standardization

At present, every automobile manufacturer has developed an augmented reality system for their products. This makes the implementation of the AR system to the Original Equipment Manufacturer. This can restrict the growth of the augmented reality automotive market shares.

Market Opportunities:

The growing prevalence of the customization of vehicles is escalating the growth opportunities of the market. Using augmented reality technology, while buying a vehicle, users can customize their vehicle as per their preference and comfort, and the manufacturers can produce the vehicle specially made for that customer. For instance, Rolls Royce gives the customer the freedom to customize their vehicle even with the material to be used, and the paint job is done as per the customer's choice. This enhances consumer satisfaction. This can act as an opportunity for the growth of the augmented reality automotive market.

AR technology can be implemented in such a way as to work as an entertainment system in the vehicle. Games, movies, and music can be played using the AR system. This enhances the user experience and can affect the sales of the vehicle as well. So, the implementation of AR as the entertainment system in vehicles can act as an opportunity for the growth of the augmented reality automotive market share.

AUGMENTED REALITY AUTOMOTIVE MARKET REPORT COVERAGE:

Market Segmentation:

Augmented Reality Automotive Market - By Sensor Technology:

• Radar 
• LiDAR
• CMOS image sensor

The CMOS image sensor segment is ruling the augmented reality automotive market with a market share of over 56%. CMOS sensors are less expensive as compared to radar and LiDAR sensors. This sensor produces better images which help in gesture recognition systems and navigation.

The LiDAR sensors are more expensive but offer better accuracy and range as compared to CMOS sensors.

The radar system is also an option for automotive manufacturers, but it does not provide the level of accuracy that the LiDar sensors can provide.

Augmented Reality Automotive Market - By Level of Autonomous Driving:

• Conventional  
• Semi-autonomous

The semi-autonomous segment is leading the augmented reality automotive market with a higher share than the conventional segment. The major reason for the growth of the semi-autonomous segment is the growing popularity of semi-automatic vehicles. Turn-by-turn navigation can be done by using AR technology.

The conventional vehicles segment is growing at a very slower pace as implementation of AR in conventional vehicles is very difficult. Although, as the technology is getting more affordable with advancements, the implementation of AR in conventional vehicles is possible.

Augmented Reality Automotive Market - By Region:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

North America is leading with the dominant shares of the augmented reality automotive market. The United States is the biggest market in the region as the government spends a lot on AR research and development. North America’s augmented reality automotive market share is 40%.

Europe holds second place in the augmented reality automotive market, with a market share of around 30%. Europe is home to the manufacturers of many of the luxury and supercars which have AR technology inbuilt as standard. Countries like Germany, Italy, and the UK are the biggest market in the region.

Asia Pacific region accounts for around 25% augmented reality market share. Countries like China and Japan are the biggest market in the region. The biggest automakers in the global market, like Honda, Hyundai, Suzuki, and Toyota, belong to Japan, while China is the biggest producer of electric vehicles.

The Latin America and, Middle East & Africa regions hold the lowest market share in the augmented reality automotive market. They both combined account for only a 5% share in the augmented reality automotive market.

COVID-19 Impact on the augmented reality automotive market: 

The automotive sector’s market share decreased significantly during the COVID-19 pandemic, as the shares were reduced along with the reduced production. This ultimately had an impact on the augmented reality automation market. The types of equipment required to operate an augmented reality automotive market are highly specific, and the supply of this raw material came to a halt during the pandemic due to supply chain and transportation issues all over the world. The major problem was the semiconductor chips shortage, due to which not only the augmented reality automotive industry but the whole electronics industry had to shut down for a certain period., So, the COVID-19 pandemic had a negative impact on the augmented reality automotive market. But the augmented reality automotive market share bounced back in the post-pandemic period as consumers prefer safe driving options and enhanced driving experiences nowadays.

Market Key Players:

1. Delphi Automotive
2. Alphabet
3. Denso
4. Garmin International
5. BMW

Market Recent Developments:

• In January 2021, Panasonic Automotive developed a new Augmented Reality based (HUD) Heads Up Display.
• In March 2021, Audi launched its new car Audi Q4 e-Tron an all-electric car that had a AR HUD.