The global market for automotive smart assistant is forecast to reach $12.5 billion by 2026, growing at CAGR 8.6% from 2021 to 2026. The market growth is mainly driven by the factors including technological development and increasing investments in artificial intelligence (AI) & machine learning (ML) and wide adoption of IoT. Furthermore, in-vehicle smart assistant systems can be integrated into other ecosystems such as home automation, smart-phones, tablets, computers, laptops and others and increases the security level. These features are set to boost the growth of automotive smart assistant industry. Various car makers including Audi, BMW, Hyundai, Toyota, Honda, Nissan, Ford and others have incorporated intelligent virtual assistant technology into their vehicles. Apart from this, the high investments and growing demand of driverless vehicles plays a major role in the growth of automotive smart assistant market size. The above mentioned factors are set to boost the market growth for automotive smart assistant during the forecast period 2021-2026.
Automotive Smart Assistant Market Report Coverage
The report: “Automotive Smart Assistant Market – Forecast (2021-2026)”, by IndustryARC covers an in-depth analysis of the following segments of the Automotive smart assistant market.
By Type: Integrated, plug-in.
By Vehicle Type: Passenger Vehicles, Commercial Vehicle.
By Channel Type: OEMS, After Market.
By Service Type: General Services, OTT services.
By Geography: North America (US, Canada, Mexico), Europe (Germany, France, UK, Italy, Spain, Rest of Europe), APAC (Japan, China, India, Australia, South Korea, rest of APAC), South America (Brazil, Argentina, rest of South America) and RoW (Africa, Middle East)
Key Takeaways
Integrated automotive smart assistant market will register the fastest growth in the forecast period, as most of the automotive manufacturers integrate this technology into their vehicles.
North America dominated the market by a market share of more than 35% in 2020 due to the early adoption of this technology and the presence of technologically advanced research institutes working for the development of AI technologies.
The demand for automotive smart assistant is estimated to witness significant upsurge during the forecast period 2021-2026, owing to the increasing investment and government’s initiatives for AI across the globe.
The market is consolidated with top market players including Continental AG, Google, LLC, Apple Inc., Amazon.com, Inc., BMW AG, IBM Corporation and others.
Automotive Smart Assistant Market Value Share, by Geography, 2020 (%)
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Automotive Smart Assistant Market Segment Analysis- By Type
Based on type, automotive smart assistant market is segmented into integrated and plug-in type. Integrated automotive smart assistant is the fastest growing segment in this market and estimated to grow at a CAGR of 10.3% during the forecast period 2021-2026. In present most of the car manufacturers integrates software-based smart assistant into their vehicles to provide their consumer a better and smooth driving experience. In August 2020, Sound-Hound announced the integration of their Houndify voice AI platform in to Honda e-electric cars that are available in Europe. Since October 2020, the above mentioned Honda e-electric car became available in Japan as well.
Automotive Smart Assistant Market Segment Analysis- By Vehicle Type
On the basis of vehicle type, this market is segmented into passenger vehicles and commercial vehicle. Passenger vehicle market held the largest market share of 29.3% and is anticipated to grow at CAGR 9.5% during the forecast period 2021-2026. Growing demand for cars to run rental business or for individual use is the major driver for this software agent based technology. According to the report of Society of Indian Automobile Manufacturers (SIAM) published on December 2020, the sales of passenger vehicles increased 4.65% to 264,898 units in November. Automotive smart assistant offers smooth driving experience by providing general and OTT services such as navigation, appointment booking, making calls, parking area information, entertainment services and many more which is a growth accelerating factor of this market. Apart from that, demand for popular smart vehicles such as electric passenger cars, driverless vehicles is a major growth fuelling factor for this market which is set to boost the adoption of automotive smart assistant. According to the Global EV Outlook 2020, 2.1 million electric cars were sold globally in 2019.
Automotive Smart Assistant Market Segment Analysis- By Geography
North America dominated the global automotive smart assistant market with share of 35% in 2020 due to the early adoption of this technology and is estimated to maintain this lead during the forecast period 2021-2026. This region has many technologically advanced research institutes working for the development of AI technologies which is primarily driving the North American smart assistant market. Willingness to adopt emerging technologically advanced smart assistant tools and rising popularity of smart vehicles, smart homes and connected vehicles among the consumers of this region as well as the presence of major smart assistant manufacturing companies play an important role in the growth. In January 2020, Amazon launched Echo Auto, a smart voice assistant device that enhances the driving experience by providing many services. Moreover, APAC is estimated to witness highest market growth during the forecast period 2021-2026 due to rapid industrialization, increasing demand for vehicles and huge investments in automotive sector. With rising demand for vehicles, the demand of automotive smart assistant is also rising. According to some recent reports of Invest India, India is estimated to become world’s third largest manufacturer of passenger vehicles by 2021. Furthermore, involvement of major market players in this region, coupled with on-going research and advancements in technical innovations, is poised to create tremendous growth opportunities for this market in this region during the forecast period 2021 to 2026. In October 2020, Toyota Motor announced an investment of $500M in a Japanese telecommunication company, KDDI for jointly conducting R&D projects on telecommunication platform that connects cars, homes, users and others.
Automotive Smart Assistant Market Drivers
Increasing Investment and Government’s Initiatives for AI:
Increasing investments in AI is anticipated to be one of the major driving forces for the development of automotive smart assistant and growth of the market during the forecast period. BMW i Ventures invests in companies which are focused on developing the automotive ecosystem, designing AI processing for autonomous cars and intelligent systems that innovates the automotive industry. In May 2019, Google announced about their enhanced in-car smart assistant, Android Auto which will have some new features and darker mode. This increasing investment in AI is all set to improve the performance level of the automotive digital assistant devices and poised to open up new growth avenues for the market. Apart from that, Government is also encouraging and taking initiatives to develop AI and ML infrastructure. In June 2020, Indian Government launched a website, National Artificial Intelligence Portal which will be a one stop platform for AI related developments of India.
Safety Measures:
The traffic law forbids everyone from using the smart-phones while driving the vehicles, still many people ignores the law and get distracted while driving. In this situation a fatal accident can take place. According to recent research report of CDC injury centre, every day approximately 8 people die in the U.S. from vehicular accidents caused by distracted driving. According to National Institute of Health, it is estimated that every year around 3,300 people die from crashes that involves distracted driving. A digital voice assistant system allows the drivers to have an access to their smart-phone applications without even drifting their gaze off the road. It helps in navigation, making contact with other people, provides entertainment services and minimizes the driving distraction which decreases the number of accident cases. Apart from that, after detecting an accident, smart assistant can send information to the nearest aid centre and to victim’s relatives. This enhances the safety level and acts as a growth boosting factor for the market.
Automotive Smart Assistant Market Challenges
Voice Recognition Issue:
Smart assistant has many advantages but it has few major disadvantages too. Voice recognition issue is one of the major challenges the market is facing. Maximum smart assistant system supports American English accent and works perfectly when there is no noise in the background. If either of these lacks, the smart voice assistant may not work properly which is major drawback of this technology. This challenge is poised to impede the automotive smart assistant market growth during the forecast period 2021-2026.
Automotive Smart Assistant Market Landscape
Partnerships and acquisitions along with product launches are the key strategies adopted by the players in the automotive smart assistant industry outlook. As of 2020, the market for Automotive smart assistant market is consolidated with the top players Continental AG, Google, LLC, Apple Inc., Amazon.com, Inc., BMW AG, IBM Corporation, Groupe PSA, Alibaba Group Holding Limited, Microsoft Corporation and others.
Acquisitions/Technology Launches/Partnerships
In November 2020, Chinese e-commerce giant Alibaba Group had collaborated with German based premium carmaker Audi in order to provide a better navigation and digital assistant system that can satisfy the demands of Chinese customers by improving the level of in car applications. To improve the connectivity among vehicles and homes, this platform will also introduce in-car smart assistant Tmall Genie.
In July 2019, German based company, Continental AG had launched a smart voice assistant for vehicles. According to the Company’s press release, this smart voice assistant is specifically designed for cars.This product is a hybrid solution with a cloud connection which helps the driver and the vehicle to communicate with each other even in dead spots. It understands multiple questions in one sentence and can detect logical connections.