$100B Market
The Korea Institute for Industrial Economics & Trade (KIET) said on May 28 that the size of the global connected car market is expected to reach US$100 billion in 2019 and the ratio of connected cars to all types of vehicles in operation is expected to reach 55% in 2020.
The KIET also mentioned in its report that not only automakers and IT companies but also service providers are coming up with products and services related to connected cars these days and these cars are likely to be a tool with which people can experience the fourth industrial revolution. According to the report, examples of the services include IT services based on automotive navigation systems, content services for providing schedule management, mobile office features based on in-car voice recognition and so on, insurance and financial services such as car insurance premium discount based on driving habits and public services like public transportation efficiency enhancement based on traffic analysis and automatic bus fare and parking fee payment.
According to industry sources, the ratio of U.S. car insurance policy holders experienced in usage-based insurance (UBI) based on smart technology increased from 2% to 8.5% between 2012 and 2014 and is likely to reach 36% in 2020. In addition, 37% of drivers in the United States are willing to buy a new car if it provides better services and 32% are willing to pay for the services. Moreover, it has been found that the use of traffic lights reflecting traffic information and data in real time can reduce the number of times a car has to be stopped by 40%, fuel consumption by 10% and duration of driving by 25%.
According to the KIET, the connected car market is a very promising one in view of all of the factors mentioned above and its segments covering telematics, mobile services and vehicular wireless communications in particular are likely to show a rapid growth. It added that some inter-business disputes are also predicted to occur with regard to the installation of hardware such as communication modules and sensors, ownership of information and data regarding vehicles, distribution of income from such services, etc.