Value of connected market set to soar by billions, research finds

Value of connected market set to soar by billions, research finds
The connected car market is set to soar over the coming years, with billions expected to be added to its value, researchers have predicted.

More cars than ever before will soon use the internet for a whole range of purposes, taking the value of the industry to around £120 billion by 2022.

In the research, which has been carried out by PwC, the market is expected to grow by around 25% each year from around £40bn in 2017.

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Estimates suggest that around two out of every three cars sold in six years’ time with have the ability to connect to the internet, creating exciting opportunities for both manufacturers and drivers.

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It is thought that the greatest advantage of developing these connected cars in ever-increasing numbers will be improved safety technology for more drivers.

The biggest driver of growth in the market, however, is thought to be autonomous cars, which are expected to account for £42bn worth of the total value.

In addition, advances are also set to be made in sat-nav and in-vehicle entertainment, as well as in telematics.

These developments will see the need for many carmakers to shift their focus towards innovation, with those that struggle to keep up with the advances expected to perform poorly.

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PwC’s automotive partner Rich Parkin said: “Despite major manufacturers increasing their development budgets by 8% compared to the previous year and realigning their focus, they are still often being overtaken by newcomers.

“To capitalise on the opportunity, traditional carmakers will need to not only take advantage of the latest technologies, but also significantly accelerate their rate of innovation.”

Manufacturers including Ford, Volvo and Porsche are currently racing to develop their own autonomous driving technology, with many partnering with firms already established in the digital sector.

Among drivers themselves, there is thought to a great deal of excitement surrounding the advances in driverless vehicles, as well as some trepidation.

In a survey by Bosch, a third of respondents admitted they were wary about using driverless cars, despite the fact that two-thirds said they wanted to see more automated driving functions.

The Government is keen to encourage the development of the technology, with Transport Secretary Chris Grayling hailing the "transport revolution" that driverless vehicles will bring.

Copyright Press Association 2016. Motoring News articles do not reflect the RAC's views unless clearly stated.