Trends and developments in the European automotive software industry

Digital developments will likely cause the automotive industry to evolve from an OEM oriented value chain towards a technology-driven value chain as we have seen in the telecommunication industry (Nokia vs Apple). For 25 years EuroDev has been the preferred European business development partner for over 350 North American companies seeking to expand their European presence.

The market for automakers is increasing the growth of the automotive industry. Currently, Europe is home to 298 automobile assemblies and engine production plants. Of which 196 of these are situated in the European Union. European car manufacturers have manufactured about 18.8million cars, trucks, and buses. The industry accounts for EUR 440.4billion in taxes in major European markets. According to EAMA, the EU leads the world in patents for self-driving vehicles, accounting for about 33.3% of all applications.

The automobile industry is experiencing rapid growth for Hybrid electric vehicles and battery electric vehicles in Sweden, Germany and the Netherlands. The graph below shows whether European drivers are comfortable with the adoptation of software systems.

Key European trends

Electrification: In the forecast period (2017-2018), electrification vehicle sales rose by 65%. In 2020, the growth further increased by 9%, indicating strong growth in the market. The first quarter of 2020 sales rose as the overall electrification vehicle penetration rate in all regions increased to 7.5 per cent. 

Autonomous vehicles: The European autonomous cars market size in 2017 was assessed to be over 9 million units and projected to grow by CAGR of 12% over the forecast period. The industry is highly propelled by the supportive government initiatives and policies; increasing infrastructure investments to enhance communication technologies for autonomous vehicles. Further, the European Union is continuously funding new projects to conduct research allowing autonomous cars to operate on roads without permits and extra insurances.

Shared mobility: The shared mobility market between China, Europe and the USA was 54 billion in 2016. The market is expected to experience annual growth from 2015 to 2030 of 15.2%. This new development has contributed 14% to the automotive industry.

Connectivity: The connected car device market is expected to continue growing at a CAGR of 16.3% between the forecast period of 2017 to 2021. In Europe, this market is expected to reach 34.37 billion by 2025; growing at a CAGR OF 7% (2020-2025). Car manufacturers in Europe are focusing on providing connectivity solutions to increase sales. Further, consumers are also increasing their willingness to stay connected to the outside world, increasing the demand for connectivity solutions. In Europe, the autonomous connectivity sector is highly driven by the following markets; Germany, UK, France, Spain, Italy, Sweden, Denmark, Switzerland and Netherlands.

From the graph , Almost 50 percent of the drviers are comfortable with using connected car features; vehicle break down diagnostic data, vehicle data and driver profile.  Moreover, a signifcant number of drivers are also comfortable with having geo-location data, driving profiles and entertainment usage data.

European drivers who feel comfortable using connected car features

European software market

Conclusion

With many developments moving fast, it makes it more difficult for market players to adapt. Going direct or working with channel partners. The safe option is most likely targeting and establishing relationships across the different levels and staying on top of trends and building relationships with fast-growing disruptive start-ups.

Europe has been one of the leading markets and considering the growth of the electric vehicle industry combined with environmental trends, growing geographical density and population, producing shared cars the need for mobility remains to grow in a different way offering tremendous growth opportunities for the automotive software industry.

To learn more about the European software industry, visit this page  or schedule a meeting with an industry expert. 

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About EuroDev

EuroDev, established in 1996 with offices in The Netherlands and France, has a single, defined purpose to help mid-sized North American companies expand their business in Europe. We have created a proven, successful business development model and since our founding, have partnered with over 300 companies to help them define and meet their European business goals. Services provided include Sales Outsourcing, HR Outsourcing and Digital Marketing.

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