The connected vehicles and packing space market are expected to witness a CAGR of 22.3% during the forecast period (2020 - 2025). While fully automated vehicles are moving toward a widespread scale, it is in the transition phase where connected cars are expected to dominate the market for at least the next 20 years.
- Over the years, the development of connected vehicle has been taking place and is expected to be a huge technological advancement which will allow the vehicles to communicate with their surroundings. This will further fuel the trend from car ownership to more mobility-related services. In urban areas, particularly, the decline in the number of vehicles is expected to reduce dramatically. According to the ADAC automobile association in Germany, the adoption of a private car to decline by close to 30% by 2040.
- At the same time, the parking industry is also slowly gaining traction across several countries. This is mainly due to the slow-changing nature of the parking industry, which includes both on-street as well as off-street parking. According to the latest survey by PYMTS.com, there are more than 4,000 garages and surface parking lots in the United States, and commercial real estate developers own most of this property to REITs and even some cities. Also, the company has stated that over 30% of the traffic is the major cities is created in search of parking space.
- However, amid the ongoing outbreak of COVID-19 across the world has hit across the industries. As the governments have announced the mandatory work from home in most of the countries, the market for parking spaces as well as connected vehicles has impacted. Europe is the prominent market for both the automotive manufacturing and parking industry is also affected due to the severe COVID-19 outbreak in the region.
Key Market Trends
Connected Passenger Car Vehicle Market is Expected to Grow Significantly
- The rising automotive sales and increasing production of autonomous vehicles across the world are driving the automotive industry. According to VDA (The German Association of the Automotive Industry), the sales of automotive worldwide, in 2019, reached 65.5 million units. Moreover, according to the UBS, the global market for autonomous vehicles manufacturing and sales is expected to reach USD 243 billion by 2030. Such high growth in automotive sales might lead to potential growth for the market during the forecast period.
- Additionally, to seize growth opportunities in autonomous vehicles, critical automotive manufacturing companies worldwide are extensively investing in production expansion. For instance, in November 2019, Volkswagen announced to start the construction of its new connected vehicle production facility in its Chattanooga site in the United States. With an investment of over USD 800 million, the company plans to start production by 2022. It also plans to create a new battery pack assembly facility on the site.
- Last year, BMW also declared an investment of over EUR 1 billion for building a new car manufacturing facility in Hungary. These expansions are expected to fuel the demand for the global automotive inertial systems market.
Europe is Expected to Hold the Largest Market Share in Parking Industry
- The smart city projects in Europe are looking forward to the enhanced mobility solutions with an aim to reduce pollution, congestion, time for passengers in search of parking spaces, and improve accessibility. The European Union has mentioned that the digitization, and working in tandem with appropriate political strategies are the main pillars for improving parking efficiency and offer new parking services to serve better cities’ Sustainable Urban Mobility Plans (SUMP).
- Dynamic pricing is one of the ongoing pricing strategies offered by most of the parking space providers in the region. The dynamic pricing has been standard practices in many industries, e.g., in the airline and hotel industry. To make the parking space easily available, these providers are revamping parking policies and updating zoning rules to induce and encourage clean mobility oriented developments.
- Over the past ten years, the parking sector has experienced the introduction of several technological innovations, such as dynamic information systems, mobile apps to find, pay, and reserve, automated number plate recognition (ANPR) systems, sensors, and cameras for paid parking. Oslo (Norway) and Madrid (Spain) are some of the cities that recently commenced both on-street and off-street parking with a dynamic pricing model.
The connected vehicles and parking space industry are more inclined toward a consolidated market with few major and established players operating and holding major market share. Due to the high investment cost needed for entering the market, there is a high barrier to entry in the market. Some of the recent developments made by key players in the market are as follows.
- May 2020 - Volkswagon AG announced to invest over USD 2.2 billion for its electric vehicle venture with a Chinese partner in a USD 1.1 billion deal, and another USD 1.1 billion for battery manufacturing in China. With this expansion, the company will be the biggest shareholder in battery production globally.
- May 2020 - Parklio barriers had been set up in 42 reserved parking spaces in front of nine hotels in Split to help prevent further misuse of these parking spaces.
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