The automotive simulation market is estimated to be USD 1.8 billion in 2020 and is projected to reach USD 3.3 billion by 2027, at a CAGR of 11 % during the forecast period .Automotive Simulation Market size is proliferating during the forecast period propelled by stringent norms imposed by governments related to vehicle safety. OEMs are focusing on using the IoT for connected vehicles to assist drivers and improve passenger safety. For instance, the percentage of cars with internet connectivity is anticipated to rise from 13% in 2015 to 75% in 2020. Connected cars is expected to increase to 22% by 2020 from 10% in 2015. AI technologies such as machine learning and deep learning technologies are expected to further enhance applications such as ADAS, and adaptive cruise control, among others to drive the market growth over the forecast period.
The automotive simulation is an advanced software, which simulates passenger vehicles and their components for testing & development of driver assistance systems, on-board power electronics, vehicle dynamic controls, and engine controls. Automotive simulation in the vehicle environment is increasingly adopted in the driving training as it helps a person to learn driving without any risk to life or vehicles. Automotive simulation in manufacturing also helps OEMs to detect any shortcomings of the vehicle component before its fitted into the vehicle, enhancing the efficiency of the product.
Increasing focus on R&D activities to reduce the carbon footprint and enhance the efficiency of vehicles is driving automotive simulation market growth. OEMs are manufacturing lightweight vehicles as these can combust in less fuel, reducing the carbon footprint and increasing the efficiency of vehicles. OEMs are also manufacturing intelligent vehicles, which detect, predict, and diagnose equipment failures, and perform corrective interventions that include triaging of damage on the go following a collision.
Complications & constraints related to real-time control in simulation software are impeding automotive simulation market growth. With the automation industry moving toward self-driving and environment-friendly vehicles, old regulations imposed will hinder the growth of the automotive simulation market. The governing bodies are required to understand and complete the functioning of self-driving and environment-friendly vehicles to create several new laws along with revision of the existing laws.
With increasing connectivity and digitalization, OEMs are focusing on improving cybersecurity over connected vehicles & devices, which is expected to drive the automotive simulation market. Along with cybersecurity, rapid infrastructure development and advancements in 5G technology are anticipated to fuel the growth of the automotive simulation market over the forecast period.
With the increasing demand for design and consulting, the service segment is expected to be the fastest growing in the automotive simulation market. The service segment is gaining a large share of the market due to an increase in demand for Software as a Services (SaaS) such as pay per hour services. The on-premises segment is expected to hold the largest market share as it helps in upgrading in-house capabilities of simulation & analysis technology. It also offers various functionalities such as easy deployment, high-end security, and complete access to network solutions.
The prominent players in the global Automotive Simulation Market include ESI Group (Germany), dSPACE GmbH (Germany), ANSYS, Inc. (US), MOOG INC. (US), Dassault Systèmes (France), PG Automotive GmbH (Germany), TESIS GmbH (Germany), Siemens PLM (US).
Asia Pacific is expected to be the largest region in the automotive simulation market during the forecast period. Asia Pacific comprises emerging economies, such as China and India, along with developed nations, such as Japan, and is the largest market for automobiles. In the recent years, the region has emerged as a hub for automobile production. Infrastructural developments and industrialization in the emerging economies have opened new avenues, creating several opportunities for the automotive OEMs. To gain a competitive advantage in the market, OEMs are offering advanced applications such as HMI, keyless entry, and auto-park assist among others, which creates demand for prototyping and testing of new automotive systems. This, in turn, is expected to drive the growth of the market in the region. Moreover, the different governments in the region are set to introduce stringent environmental regulations on OEMs from2020 compelling manufacturers to change designs according to new standards. All these factors are expected to fuel the growth of the market in the region.