Car Market: The Boom Of Connected Cars And 5G By 2025

The “Smart automotive” study carried out by Counterpoint predicts a huge revolution in the automotive sector in the next five years. Here are the data and forecasts

The car market has positively absorbed the crisis caused by the Coronavirus, thanks to continuous product innovation and the incentives granted by the Government related to innovative and sustainable mobility, designed to incentivize consumers to buy the latest generation vehicles with a reduced environmental impact.

The “Smart automotive” study carried out by Counterpoint focuses precisely on the automotive sector, particularly concerning the increasingly smart future that will characterize it. In the next five years, the sector will be the protagonist of real growth and revolution, which will benefit companies that can make the most of digitization. More than 270 million cars with native connectivity are expected to be produced and sold, i.e., integrated into the system and not adopted via smartphone. This forecast lays the foundation for a real leap forward, which the sector must be able to promote and propose effectively.

Automotive and Covid-19

Aman Madhok, the analyst who took care of the study, confirms the imminent growth of the sector: the sale of connected cars in 2020 had the first push forward. There are about 7 million worldwide, but the diffusion will increase further in the coming years. Madhok analyzed the market like this:

“If we compare sales with those of the same period of 2019, we see growth, but in the second quarter sales still fell compared to the first due to the Coronavirus, despite a growth in the Chinese market that at that time was coming out of the first wave of the pandemic”.

In short, it seems that the automotive sector is among the lucky ones to have faced the crisis without too much damage. And the future will be increasingly influenced by new technologies.

Future of the automotive sector between connectivity and innovation

The vast majority of native-connected cars sold in 2020, or 88%, use 4G LTE technology. But the real news will come on the scene next year when the first cars with 5G are expected to go on sale. In 2025, 1 in 5 cars with a native connection will have integrated 5G.

China and the United States will drive the market: in these two areas of the world, we will find 50% of cars in 5G, and it is, therefore, appropriate for all operators in the sector to carefully look at what happens in these two countries, true pioneers of innovation.

Finally, it is necessary to consider which car companies will drive production: in the first place, we find the luxury brands, such as BMW and Mercedes. But alongside these, Gm, Volkswagen, and Toyota also stand out. Indeed, it is recent news that Volkswagen will invest 73 billion euros in projects for the construction of electric, hybrid, and digitized cars. At the same time, Toyota has entered into a € 400 million deal with KDDI, a Japanese telephone operator, to bring next-generation connectivity to upcoming car models.

There is no more time; in front of constant market growth and a revolution of this type at the door, all operators, including SMEs that deal with promoting and selling cars, must keep up with the times and embrace corporate digitalization.

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