Connected Car Market - Strategic Insights and Forecasts (2026-2031)

The connected car market is forecast to grow at a CAGR of 19.7%, reaching USD 436.8 billion in 2031 from USD 177.8 billion in 2026.

Technological advancements, increased auto manufacturing, and rising consumer desire for luxury and comfort in cars are different key factors projected to contribute to the connected car market's expansion. The development of improved suspension systems and the rise in demand for lightweight suspension systems, however, are anticipated to offer the market a greater potential for expansion.

There has been a significant change in the Indian automotive market away from well-known brands like the Fiat Padmini Premium, HM Ambassador, and Maruti 800 towards those produced by foreign OEMs. The Federation of Automobile Dealers Associations (FADA) estimates that Maruti Suzuki held a 39.17% share in the nation in 2022 and sold 98,318 units at retail, while Hyundai constituted for 15.96% market share in the same year with 40,056 units. Additionally, Tata Motors declared intentions to invest US$3.08 billion in its passenger car over the following five years in April 2022.

Collaborations and product innovation by manufacturers are propelling the market. For instance, Cisco and TELUS announced the launch of new 5G capabilities in North America to serve IoT use cases across industry verticals. The network would serve as a foundation to support drive testing by a major North American automotive manufacturer’s 5G Connected Car in February 2024.

Additionally, HARMAN announced the launch of the HARMAN Ready Connect 5G Telematics Control Unit (TCU) in February 2024, leveraging state-of-the-art Snapdragon Digital Chassis connected car technologies from Qualcomm Technologies, Inc.  Based on the Snapdragon Auto 5G Modem-RF Gen 2, HARMAN Ready Connect 5G TCU represented a significant advancement in automotive connectivity. Also, in February 2022, an Ultra Low-Latency Edge-Based Compute Platform for Turn-Key Connectivity, called HARMAN Savari MECWAVE, was introduced by HARMAN. Hazard alerts and other vehicle-to-everything (2X) communications, as well as high-throughput connection activities like interactive infotainment and video streaming, are deployed more quickly thanks to MECWAVE.

OEMs are creating software solutions for a more connected, individualized customer experience in addition to making cars. OEMs have the potential to develop new revenue streams and more continuing, direct interactions with their customers emerging from the auto industry's constant evolution.

Connected Car Market Drivers

• Growing adoption of ADAS features in cars

The increasing consumer interest in autonomous and connected cars is growing, and throughout the projected period, these technologies are expected to become more widely accepted. Consumer behavior is significantly impacted by ADAS features like collision warning, lane assistance, blind spot recognition, etc. These features are intended to improve the performance of automobiles by decreasing vehicle downtime by advising the owner of any problems with the vehicle. End customers are willing to spend more money on the newest technologies like automated driver assistance systems (ADAS) that improve driving experiences and raise driver and passenger safety as a result of the growing technical breakthroughs in the automobile sector.

According to the Highway Loss Data Institute, by 2026, at least half of all registered vehicles will only have two ADAS systems. Around 71% of registered vehicles will have rear cameras by 2026, and 60% will have back parking sensors. However, just 17% of registered cars are projected to have adaptive cruise control with lane centering by 2026, and only 13% are likely to have adaptive lighting.

To overcome the challenges of creating advanced driver-assistance systems (ADAS), several technological firms are collaborating on the market. For instance, the cooperation between PATEO Corporation and Qualcomm Technologies, Inc. (Qualcomm) was expanded in June 2022 to include the development of solutions for vehicle intelligence, smart car connection, Service-Oriented Architecture (SOA), intelligent cockpits, and multi-domain fusion based on central controllers. Veoneer Inc., a leading provider of safety technology, will be acquired by Magna International Inc. in July 2021. To purchase Veoneer Inc., a major provider of automotive safety technologies, Magna International Inc. entered into a binding merger agreement with the firm. Magna sought to improve and expand its ADAS portfolio and sector position with this acquisition.

Connected Car Market Geographical Outlook

• By geography, the connected car market is segmented into North America, South America, Europe, the Middle East and Africa, and Asia Pacific.

The United States is the dominant market in the North American region. The rising adoption of Advanced Driver Assistance Systems (ADAS) comprising features like adaptive cruise control, lane departure warning, and collision avoidance systems has emerged as a significant driver of the demand for connected car technologies. These systems enhance safety, prompting the need for connectivity to support their functionality and facilitate real-time communication and data exchange between vehicles and infrastructure.

The development and deployment of 5G networks have introduced significant advancements in connectivity, offering faster speeds and enhanced reliability. This has led to real-time data exchange and improved communication between vehicles and infrastructure in the context of connected cars. With the United States emerging as a leader in 5G deployment. The region has a significant 59% population coverage of 5G, and the potential for leveraging this technology in the connected car market is substantial. The widespread availability of 5G services fuels the growth and implementation of advanced connected car technologies in the United States.

The safety application segment of the connected car dominates the market.

Connected cars are enabled with multiple functional, informational, and behavioral safety measures. Connected cars provide emergency call service during accidents, roadside assistance, and other onboard safety measures. More vehicles are coming with 5g connectivity, improving car-to-car communication and enhancing safety measures.

The government of most of the nation is implementing the safety regulatory standard in the automotive industry. For instance, ISO-26262 is a functional safety standard certification that must be adhered to by every automotive manufacturer worldwide for the development of automotive systems-on-chip (SoCs) used in autonomous driving and advanced driver assistance programs (ADAS) applications. Connected and intelligent cars significantly reduce accidents in terms of passive safety. The rising road accidents and fatalities worldwide are pushing the demand for connected cars for enhanced security and reduced accidents.

Connected Car Market Key Developments

The market leaders for the Connected Car Market are Land Rover Limited, HARMAN International, Verizon, Daimler AG, AT&T, Vodafone Group, Telefónica S.A, BMW AG, and Audi of America. The key players in the market implement growth strategies such as product launches, mergers, acquisitions, etc., to gain a competitive advantage over their competitors. For Instance,

• March 2026: Xiaomi officially launched the next-generation SU7 connected electric sedan featuring upgraded 897-volt platform, enhanced connectivity architecture, and extended driving range, reinforcing integration of advanced connected and software-defined vehicle technologies.

• January 2026: AT&T and iM Media Labs unveiled a CES 2026 collaboration integrating AI-powered media platforms with AT&T Connected Car™ 5G connectivity, enabling personalized in-vehicle entertainment, unified content access, and scalable deployment across OEM ecosystems.

• September 2025: Connected Cars A/S and Volkswagen Commercial Vehicles announced a strategic partnership integrating CC-Link telematics hardware and CC-DataStream platform into Volkswagen’s Connect Pro ecosystem, enabling predictive maintenance, real-time diagnostics, and improved fleet efficiency globally.

• June 2025: Huawei and JAC Group began mass production and deliveries of the Maextro S800 smart vehicle, incorporating advanced connected car technologies, including AI-driven systems, an integrated digital cockpit, and an intelligent mobility ecosystem.

• March 2025: WirelessCar announced it had surpassed 15 million connected vehicles globally, highlighting rapid adoption of connected services, real-time telematics, and cloud-based vehicle data platforms across automotive OEM ecosystems.

Connected Car Market Scope