Automotive software market to hit $40.1B by 2027

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CHICAGO — The global automotive software market size is expected to hit $40.1 billion by 2027, up from $21.7 billion in 2022, according to a new market research report from MarketsandMarkets.

The growth — a compound annual growth rate (CAGR) of 13.1% from 2022-2027 — is driven by the rising adoption of ADAS features in vehicles, demands for advanced applications, and the high adoption of connected car service, as well as increasing government safety regulations, according to MarketsandMarkets.

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ADAS and safety systems are expected to be the largest application of the automotive software market. ADAS and related systems enable luxury, safety and comfort. Some governments also have focused on implementing ADAS and safety features — the European Union and the U.S. both mandate that vehicles be equipped with automatic breaking systems (ABS) and forward-collision warnings, for example, MarketsandMarkets said.

China, which has been a “dynamic power in the global economy and an established market in the field of connectivity,” will be the largest in Asia Pacific automotive software market by 2027. That growth will be further driven by efforts to “enhance the intelligent driving experience in the world’s most prominent car market,” the research firm said.

Key manufacturers are focusing on strategic partnership with key market players, market expansion, R&D and product advancements to keep up with changing demands, researchers said, using the example of Bosch’s digital cabin R&D center in Shangai.

“The development of these connectivity solutions in the Chinese market will drive the demand for automotive software,” the firm said.

Autonomous driving is expected to be the fastest growing software market by 2027

“The successful deployment of autonomous driving in real-world situations will be complemented by the penetration of highly advanced software in vehicles,” the firm said.

Several vehicle makers, including Audi, BMW, Ford, Jaguar Land Rover, Mercedes-Benz, Nissan, Tesla and Volvo, already offer level 2 ADAS features — steering, acceleration and braking assistance — worldwide, the firm said.

Level 3 and higher features — where the vehicle is communicating with both other vehicles and the environment — will require advanced technology.

“Therefore, the introduction of high-level automation in the market would drive automotive software demand in the near future,” the firm said.

Access the report, “Automotive Software Market by Application (ADAS & Safety, Connected Services, Autonomous Driving, HMI, V2X, Infotainment), Software Layer (OS, Middleware, Application), EV Application (Charging, Battery, V2G), Vehicle and Region – Global Forecast to 2027”, at


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