NEXT GENERATION IN-VEHICLE NETWORKING (IVN) MARKET ANALYSIS

Next Generation In-vehicle Networking (IVN) Market Size and Forecast – 2024 to 2031

Global Next Generation In-vehicle Networking (IVN) Market is estimated to be valued at USD 1.61 Bn in 2024 and is expected to reach USD 2.91 Bn by 2031, growing at a compound annual growth rate (CAGR) of 8.8% from 2024 to 2031.

Key Takeaways from the Next Generation In-vehicle Networking (IVN) Market Report:

• Passenger cars dominate the Next Generation In-vehicle Networking (IVN) market with a share of 49.3% in 2024.
• Controller Area Network (CAN) is expected to account for a market share of 40.3% in 2024.
• North America is a dominant market with a projected leading share of 48.4% in 2024.

Market Overview:

The demand for next generation in-vehicle networking is increasing at a brisk pace. OEMs are increasingly integrating advanced network technologies in vehicles to enable features like connected cars and autonomous driving. This is driving investments in 5G technologies and standards like IEEE 802.11p for vehicle communications. Additionally, consumer demand for infotainment and comfort features that require high-speed in-vehicle networks is also promoting the need for extensive networking capabilities inside modern vehicles. The technological shifts in automotive technologies are projected to define the future growth trajectory of next generation in-vehicle networking market until 2031.

Segmental Insights

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Vehicle Type Insights, Passenger Car Contributes Highest Market Share Owing To Consumer Demand for Advanced Connectivity

Passenger cars are expected to dominate the global market with a share of 49.3% in 2024 due to an increasing demand for advanced connectivity features among consumers. The demand within the passenger car segment is driven primarily by the need for enhanced safety, comfort and entertainment applications in vehicles. With rising disposable incomes and evolving consumer lifestyles, buyers expect their vehicles to offer a similar connected experience as their mobile devices. This is propelling automakers to integrate more sophisticated networking technologies in passenger cars. 

Connectivity Type Insights, CAN contributes the Highest Market Share Owing to Its Widespread Deployment and Compatibility with Legacy Systems

Among various connectivity protocols, Controller Area Network (CAN) is expected to account for a market share of 40.3% in 2024 attributing to its widespread deployment base across different vehicle classes since long. CAN has been the primary in-vehicle communication standard due to its robustness, error detection capabilities and affordable implementation costs. It is a message-based protocol designed specifically for automotive applications like engine control, transmission control, anti-lock braking systems and others. The adaptability of CAN buses to support additional modules without major modifications makes it compatible with legacy vehicle architectures. This facilitates seamless integration of new features without necessitating complete network overhaul.

Regional Insights

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North America Next Generation In-vehicle Networking (IVN) Market Trends

North America dominates the Next Generation In-vehicle Networking market and is expected to account for 48.4% market share in 2024. The growth can be attributed to the strong presence of leading automotive companies and semiconductor players in the region. Countries like the U.S. and Canada have favorable policies supporting R&D and adoption of advanced automotive technologies.

Asia Pacific Next Generation In-vehicle Networking (IVN) Market Trends

Asia Pacific region is expected to exhibit the fastest growth and accounting for a market share of 31.4% in 2024 fueled by the rising vehicle production and sales in countries such as China, Japan and South Korea. Governments in these countries collaborate actively with automakers to accelerate the development of connected vehicles technologies.

Next Generation In-vehicle Networking Market Outlook for Key Countries

United States Next Generation In-vehicle Networking (IVN) Market Trends

The United States In-vehicle Networking (IVN) Market continues to witness rising investments from major automakers like General Motors and Ford in building next-gen vehicle platforms integrated with high-speed networking solutions from players like NXP and Intel. The adoption of connected car technologies is driving significant changes in the regional market. Vehicles are becoming more software-defined than ever before, with advanced electronic control units and networks facilitating infotainment, telematics, and advanced driver assist functions.

China Next Generation In-vehicle Networking (IVN) Market Trends

China's market growth is driven by the bulk procurement deals signed between domestic automakers such as SAIC and international chipmakers to mass produce advanced electronic control units for luxury and commercial vehicles. The emerging trends of connectivity and automation in vehicles are strongly influencing the development of next generation in-vehicle networking solutions in China. As more vehicles are being equipped with advanced driver assistance systems, sophisticated infotainment interfaces, and capabilities to connect to cloud services, the need for high-speed, reliable networking within the vehicle is growing exponentially.

Germany Next Generation In-vehicle Networking (IVN) Market Trends

Original equipment manufacturers in Germany are focusing on upgrading to next generation Ethernet based networking solutions that support high speed data transmission and scalability. Ethernet is emerging as the communication protocol of choice as it offers 100 times faster speed compared to CAN and switch-based network topology for flexible expandability. Several automakers have already started production of vehicles with Ethernet based networks or have announced plans for the same in next 2-3 years. For instance, Volkswagen started production of models like Volkswagen Tiguan and Volkswagen Arteon with Ethernet from 2021. BMW also unveiled plans to introduce Ethernet across its product range by 2025.

Japan Next Generation In-vehicle Networking (IVN) Market Trends

The Japan Next Generation In-vehicle Networking (IVN) market has seen significant changes in recent years due to evolving technology and consumer trends. As vehicles are incorporating more advanced driver assistance systems and connectivity features, the requirements from onboard networking systems have increased substantially. This has driven automakers and their suppliers to invest heavily in research and development of newer and higher-speed IVN protocols that can support these new functionalities into the future.

Market Players, Key Devlopment, and Competitive Intelligence

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Key Developments:

• In June 2024 Renesas Electronics Corporation expanded its IVN product portfolio with a new series of microcontrollers that offer increased processing power and support for multiple networking standards, catering to the growing complexity of vehicle systems.
• In July 2024 Broadcom Inc., announced the development of a high-bandwidth automotive Ethernet switch, enabling faster data transfer rates to support advanced in-vehicle applications and improving overall network performance.
• In August 2024, Qualcomm Technologies unveiled a new automotive connectivity platform that integrates 5G capabilities with existing IVN infrastructures, enhancing vehicle-to-everything (V2X) communication and supporting the evolution towards autonomous driving.

Top Strategies Followed by Next Generation In-vehicle Networking (IVN) Market Players

• Established Players: Leading companies in the IVN market focus extensively on research and development to deliver high-performance innovative solutions. For example, companies like Bosch, Continental, and Denso invest over 5% of their annual revenues into R&D each year to develop cutting-edge network technologies, security solutions, and vehicle integration systems. These players also form strategic global partnerships with automakers to solidify their market presence. Bosch has partnerships with nearly all major automotive brands to provide customized networking systems tailored to each manufacturer’s needs and development timelines.
• Mid-Level Players: Medium sized IVN solution providers focus on delivering quality cost-effective products. Companies such as Molex and Yazaki invest in low-cost manufacturing capabilities in Asia and Eastern Europe to offer affordable networking hardware and software modules. They additionally form technical collaborations, such as Molex partnering with Cloudify to integrate advanced cloud-based networking capabilities into their universal gateway modules. These partnerships help mid-tier players boost technologies and remain competitive against larger rivals.
• Small-Scale Players: Emerging local players target niche automotive sub-sectors or geographically concentrated markets. For example, German company Anthropic focuses on developing AI-based cybersecurity tools for commercial vehicles, a niche with less competition. Meanwhile, French startup Oksi targets the domestic aftermarket by offering modular hardware upgrades tailored for popular French automobile models through local automotive shops across the country.

Emerging Startups - Next Generation In-vehicle Networking (IVN) Industry Ecosystem

• Innovative Technologies: Startups are actively developing technologies like autonomous driving system provider Anthropic, which applies self-supervised learning techniques to computer vision problems. Aurora Innovations is developing a flexible, scalable “driving graph” to enable autonomous operation of vehicles without high-definition 3D maps. These types of advanced AI and connectivity solutions have potential to significantly impact industry technologies and business models in the coming years.
• Sustainable Solutions: Startups also focus on sustainability, like Carlightful that collects and analyses in-car data to reduce emissions and improve driver safety through eco-driving tips and scoring. Eco motive upgraded older fleet vehicles with advanced networking and electrification solutions to decrease oil dependence and lower lifetime emissions.

Market Report Scope

Market Dynamics

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Next Generation In-vehicle Networking (IVN) Market Driver - Increasing Demand for Passenger Cars Around the Globe

As economies around the world continue to grow steadily, disposable incomes of middle-class households are rising consistently. More people now have access to affordable means of transportation which is fueling the demand for passenger cars significantly across both developed and developing regions. The rising affluence is enabling consumers to fulfil their basic mobility needs as well as experience enhanced comfort and convenience through vehicle ownership. Manufacturers are also widening their production capacities and dealer networks to tap into new markets. The rapid rate of urbanization is another macro trend propelling the automobile sector on an upward trajectory. As people migrate to cities for better living standards and job opportunities, personal vehicles are becoming indispensable for daily commutes.

Next Generation In-vehicle Networking (IVN) Market Challenge - High Total Cost of Ownership of Flash Storage

One of the major challenges currently being faced by the next generation in-vehicle networking market is the high total cost of ownership of flash storage devices that are commonly used in modern vehicles for network connectivity and infotainment functions. As vehicles continue to adopt more advanced connectivity capabilities through IVN technologies, the storage requirements have also increased significantly. However, flash storage devices like SSDs and eMMCs that are predominantly used come with short lifespans and high replacement costs. The volatile memory chips used in flash storages are susceptible to wear and tear from continuous read/write operations. This leads to decreased performance over time and eventual failure within 5-7 years of vehicle usage. The replacement of defective flash storage units contributes significantly to the overall maintenance costs of newer vehicles.

Next Generation In-vehicle Networking (IVN) Market Opportunity- Integration with Electric Vehicles (EVs)

One of the major opportunities available for the next generation in-vehicle networking market is its growing integration capabilities with electric vehicles. As EVs continue to penetrate mainstream vehicle markets globally, they require advanced computational and sensing capabilities to support autonomous driving functions as well as enabling connectivity between charging infrastructure and vehicles. Next-gen IVN platforms are uniquely positioned to support these requirements through high-speed low-latency networks within EVs. Their ability to connect hundreds of sensors and ECUs together while also linking to external cloud networks makes them an ideal technology substrate for self-driving EVs. The development of IVN-enabled smart EV charging solutions, vehicle-to-grid integration, and advanced computer-based driver-assistance features present a sizable market opportunity. 

Analyst Opinion (Expert Opinion)

• The adoption of advanced safety, entertainment and connectivity features in vehicles is driving the next generation in-vehicle networking market. Technologies like advanced driver assistance systems, autonomous driving and rich infotainment demand high speed communication networks within vehicles. This increases the need for scalable and flexible interconnect solutions that support emerging applications. The increasing computational demands from advanced applications is also propelling automakers to look for networking technologies beyond CAN bus that have greater bandwidth and lower latency. However, constraints in available space, power consumption and cost sensitivity in automotive manufacturing remains a challenge for network switch manufacturers.
• Establishing new networking standards for scalable architectures also requires collaboration between automakers, suppliers and silicon companies. This delays the wide adoption of new IVN technologies. The market also sees cutthroat competition as major automakers promote their preferred networking solutions.
• The Asia Pacific region, led by China and Japan, offers largest opportunities due to the high production volumes of automakers based in the region. The presence of leading automobile electronics suppliers along with automotive design capabilities makes it an attractive region. In Europe, countries like Germany and UK are innovating networking solutions for integrating advanced driver assistance technologies in premium vehicles. The North American region is also gaining traction as major tech companies are investing in vehicle connectivity and autonomous driving projects.

Market Segmentation

•  Vehicle Type Insights (Revenue, USD Bn, 2019 - 2031)
• • Passenger Car
  • HCV
  • LCV
  • AGV
• Connectivity Type Insights (Revenue, USD Bn, 2019 - 2031)
• • CAN
  • LIN
  • FlexRay RF
  • Ethernet
  • MOST
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
• • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
  • Acome
  • Aricent Inc
  • Agilent Technologies
  • AISIN AW Co Ltd
  • Analog Devices
  • Broadcom
  • Bosch
  • Daimler AG
  • Freescale
  • Harman
  • NXP
  • Renault SA
  • Renesas
  • Visteon
  • Wurth Elektronik
  • Yazaki Corporation