Smart Transportation Market forecast to reach $128.1 billion by 2025, at a CAGR of 13.1% during 2020-2025. Increase in urban population, various government regulations, growing smart city initiatives assist in developing connected vehicle technologies such as Vehicle-to-Vehicle (V2V) and Vehicle-to-Grid infrastructure (V2I). For instance, Indian government provided a funding of $7.6 billion for the development of smart infrastructure and management services under the smart city initiative program over a five year period from 2016 to 2021. Such investments and initiatives are likely to improve the smart transportation market.
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Type – Segment Analysis
Roadways account for the highest share in the smart transportation market. According to the report given by United States Environment Protection Agency in 2017, the transportation sector generates the largest share of greenhouse emissions accounting for 28% of total emissions globally. The adoption of smart transportation solutions, such as compressed natural gas, smart fuels and connected vehicles, helps in reducing the total vehicle carbon emissions and enhancing the environmental safety. The railway sector is expected to grow at the fastest rate over the forecast period. It carries billions of tons of freight and passengers each year, which results in the development of efficient smart rail infrastructure and technologies. The government of various countries are also taking up initiatives and implementing regulations for the development of the smart railway system. In some countries including China, the government has invested $28 billion in various PPP projects for implementing smart railways.
Application – Segment Analysis
Smart traffic management solutions hold the highest CAGR of 20.22% during forecast period 2020-2025. With the growing traffic congestion, pollution, and accidents, smart traffic management are gaining popularity in various countries. For instance, in January 2018, the China-based firm, Didi Chuxing together with Chinese traffic management authorities launched a smart city traffic management solution known as DiDi Smart Transportation Brain which uses artificial intelligence (AI) capabilities to promote the transformation and upgrading of the taxi and bus industries, and help cities develop sustainable smart transportation ecosystems. Similarly in 2018, Government of India has approved to fund $8.9 billion to use artificial intelligence to decongest traffic and monitor violations. These kind of technologies are likely to accelerate smart transportation market trends.
Geography – Segment Analysis
In 2019, North America dominated the smart transportation market share for about 35%, due to rapid deployment of smart transportation solutions, which offer features such as real-time traffic information, parking management systems, smart signaling systems, electronic toll collection, and real-time information for public transit systems. For Instance in 2016, The US Department of Transportation invested approximately $160 billion for smart cities solutions. These projects are intended to provide better parking and traffic management solutions there by creating the demand for smart transportation market.
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Drivers –Smart Transportation Market
Rise in use of vehicles results in increase in parking issues worldwide, which can be overcome with the introduction of advanced parking management system (APMS). APMS assists people to find parking spots quickly, thereby enhancing the visitor’s experience. Similarly, Smart transportation systems give city managers the ability to better control the flow of traffic and provide the best routes for emergency and law enforcement personnel responding to incidents, as well as trucks delivering goods. For instance, in June 2016, the Texas Transportation Commission announced the approval of a $1.3 billion plan to reduce vehicular congestion in the most congested roadways in Texas. These kind of investments will create the demand for smart transportation market.
Smart transportation utilizes information technology and artificial intelligence to efficiently manage and coordinate advanced public transportation systems. For instance, in Germany, they are using artificial intelligence to optimize traffic light control and reduce the waiting time at an interpopulation to be aware of the traffic for better coordination and to ensure safety of the drivers. Over the past decade, traffic congestion has continued to increase globally. For instance In the U.S. alone, traffic congestion costed $305 billion in 2018, an increase of $10 billion from 2017. Increase in congestion will make the governments of different countries to deploy efficient transportation system. Hence these benefits are analyzed to drive the market in the forecast period 2020-2025.
Challenges – Smart Transportation Market
High investment in improving the infrastructures of existing transportation industry is obstructing the growth of smart transportation market size. For instance, China is investing approximately $551 million per year in Intelligent Transport System (ITS). Improvement of existing roads or rail projects requires long time period which further increases the resource and cost of the project. Similarly, complexities in advanced transportation pricing systems, infrastructure development and lack of internet penetration in under developed countries further need heavy investment for to improve supporting infrastructure for smart transportation.
Technology launches, acquisitions, Partnerships and R&D activities are key strategies adopted by players in the Smart Transportation market. In 2019, the market of the Smart Transportation industry outlook has been fragmented by several companies. Smart Transportation top 10 companies include Accenture, Cisco, GE, IBM, Siemens, Thales, SAP, Huawei, Cubic, Toshiba, Bentley Systems, Descartes, Rockwell Collins, Trimble, DNV, Conduent among others.
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