Automotive Cyber Security Market

The Global Automotive Cyber Security Market was valued at USD 1.13 billion in 2017 and is projected to grow at a CAGR of 23.16% during the forecast period, to reach USD 5.77 billion by 2025. In this study, 2017 has been considered the base year, and 2018–2025 the forecast period, for estimating the size of this market.

The report analyzes and forecasts the automotive cyber security market size, by value (USD million), of the global market. The report segments this market and forecasts its size, by region, form, security, application, vehicle, and electric vehicle. The report also provides a detailed analysis of various forces acting in the market including drivers, restraints, opportunities, and challenges. It strategically profiles key players and comprehensively analyzes their market shares and core competencies. It also tracks and analyzes competitive developments such as joint ventures, mergers & acquisitions, new product launches, expansions, and other activities carried out by key industry participants.

The research methodology used in the report involves various secondary sources such as National Highway Traffic Safety Administration (NHTSA), GENIVI Alliance, Japan Automobile Manufacturers Association (JAMA), European Automobile Manufacturers Association (ACEA), Canadian Automobile Association (CAA), and Korea Automobile Manufacturers Association (KAMA). Experts from related industries, automotive cybersecurity suppliers, and manufacturers have been interviewed to understand the future trends in the global automotive cybersecurity market. The automotive cyber security  market size of the individual segments was determined through various secondary sources such as industry associations, white papers, and journals. The vendor offerings were also taken into consideration to determine the market segmentation. The bottom-up approach has been used to estimate and validate the size of the global market. The data triangulation and market breakdown procedures were employed to complete the overall market engineering process and arrive at the exact statistics for all the segments and sub segments.

The figure given below illustrates the break-up of the profile of industry experts who participated in primary discussions.

To know about the assumptions considered for the study, download the pdf brochure

Market Dynamics

Reinforcement of mandates by regulatory bodies for vehicle data protection

White hat hackers have demonstrated the vulnerabilities of a modern automobile. For instance, in 2015, security researchers hacked a Jeep Cherokee, which enabled them to control the car remotely. This demonstrated that systems such as air conditioning, radio, windshield wipers, and transmission are vulnerable to external threats owing to a lack of cybersecurity measures. The same team also hacked a Toyota Prius and a Ford Escape. These events increased the focus of the manufacturers on cybersecurity solutions and regulations. The Security and Privacy in Your (SPY) Car Act, a legislation proposed in the US in 2015, aims to mandate that critical software systems in cars are isolated and that the entire vehicle is safeguarded against hacking by using cybersecurity measures. It also specifies that data stored in the car should be secured to prevent unauthorized access, and vehicles should detect the same, alert the drivers, and respond to hacking attempts in real time. Along with these measures, the act, which is developed by the NHTSA, will also regulate the information collected, transmitted, or shared by the vehicle by sharing the same with its owner. The act also proposes to offer the driver a choice to opt out of data collection without affecting the functionality of key features such as navigation. Recently, BMW AG (Germany) rectified a fault that potentially granted hackers unauthorized access to a vehicle through the connected drive system. This was possible as BMW’s servers were not encrypted, and the attacker could thus imitate a server and send a lock or unlock command to BMW’s cars. In 2017, the UK government issued the cybersecurity guidelines for connected and autonomous vehicles: ‘The key principles of vehicle cybersecurity for connected and automated vehicles.’ The guidelines consist of 8 principles to make vulnerable cars safer.

Additionally, automotive stakeholders such as automotive trade groups, Tier-I suppliers, and OEMs are establishing standards and promoting the sharing of information regarding cybersecurity solutions. Whereas, stakeholders from non-automotive industries are researching to examine the cybersecurity level globally. For instance, in 2017, the International Telecommunication Union (ITU) released the Global Cybersecurity Index (GCI). According to the report, the level of commitment of different countries for making data safe and secure has been increasing year-on-year. These standards mandating cybersecurity solutions are expected to drive the adoption of cybersecurity measures.

Complex ecosystem with multiple stakeholders

The automotive industry is now becoming the focus area for many non-automotive suppliers. As the value chain is fragmented among all types of industries, revenue distribution has become a tough task for the stakeholders. In the cybersecurity market, the development of countermeasures is very difficult because of the lack of standardization of cybersecurity solutions. The solutions for cybersecurity depend on the specifications given by the OEMs. These solutions vary due to the use of different platforms in the same vehicle model, differences in the electronic architecture, and different features in the vehicle. As a result, the automotive cybersecurity solution providers face integration risks to deal with threats and vulnerabilities of a vehicle.

The inherited nature of OEMs to buy all the components for a vehicle from various suppliers and assemble them into one vehicle can make the car more vulnerable. Every supplier has its own platform of electronic components, and it would be difficult to integrate all the electronic components of different suppliers. Hence, regardless of the strength of individual components, poor integration of these components can lead to cyberattack exposure. Hence, it is necessary to release standards for cybersecurity products and services throughout the stakeholders of the value chain to make vehicles less vulnerable to cyberattacks

Exceptional technological development in autonomous vehicle space

Autonomous vehicles are gaining an unprecedented amount of traction. Companies such as Mercedes, Ford Motors, and Tesla are investing heavily in their R&D capabilities to revolutionize the traditional way of driving. For instance, Ford Motors has tripled its investment in the autonomous fleet market and is testing 30 autonomous Fusion hybrids in Michigan, California, and Arizona. Similarly, Google, Uber, and Tesla are also ramping up their investments to bring an autonomous vehicle on the road that will comply with all the statutory rules and regulations and make driving a seamless experience. The growth of autonomous vehicles offers unparalleled opportunities to cloud providers, OEMs, and other stakeholders to collaborate and partner with automotive companies to leverage this growth. The agreement between Daimler AG, the manufacturer of Mercedes-Benz, and Uber Technologies Inc. to develop self-service vehicles is another instance that suggests autonomous vehicles would be a reality soon. The advent of autonomous vehicles will increase cybersecurity threats and, hence, drive the automotive cyber security industry.

Driverless cars are still in a nascent stage and are currently being tested on the road in Texas, Arizona, California, Pennsylvania, Washington, and Michigan under specific test areas and driving conditions. These cars would soon be a part of mainstream reality, according to automotive experts. Jen-Hsun Huang, CEO of NVIDIA, announced at Bosch Connected World 2017 in Berlin that NVIDIA will offer technology enabling Level-4 autonomous driving capabilities by the end of 2018. Similarly, BMW is also expected to unveil its self-driving electric vehicle, BMW iNext, by 2021. These developments would offer several opportunities to cloud and cybersecurity service providers to come forward and partner with automotive companies to take the driving revolution ahead with robust vehicle security.

Time lag in the delivery of cybersecurity updates to the market

Most of the automobile manufacturers do not have any necessary software development capabilities. The automobile manufacturers are only responsible for integrating the cybersecurity solution with the hardware of the vehicle while the rest is the responsibility of the cybersecurity provider. Hence, due to the absence of robust capabilities within automobile manufacturing plants and service centers, the time lag in the rectification of the identified vulnerabilities increases. The security code update development is a time-taking process due to back-end system records, which hampers the whole process of delivering the updates to the market without any delay.

Also, the timely delivery of the security package at the time of vehicle recalls becomes a big challenge for the OEMs. The cybersecurity providers need to expedite the development functions and deliver that to production and service centers of automobile manufacturers. The cybersecurity solution development also requires risk management, progress monitoring and reporting, and incident management, which should be put in the process of developing the solution. The cybersecurity solution providers are looking for new ways to reduce the time lag for updates as it would give them a competitive edge among other players. Hence, product innovation and accuracy are crucial for the effective implementation of cybersecurity.

The ecosystem of the automotive cyber security market consists of manufacturers such as Harman (US), Continental (Germany), NXP (Netherlands), Escrypt (Germany), and Vector (Germany), as well as research institutes such as Japan Automobile Manufacturers Association (JAMA), European Automobile Manufacturers Association (ACEA), Canadian Automobile Association (CAA), and Korea Automobile Manufacturers Association (KAMA).

Target Audience

• Automotive cyber security manufacturers
• Automobile organizations/associations
• Compliance regulatory authorities
• Government agencies
• Investors and Venture Capitalists (VCs)
• Raw material suppliers for automotive cybersecurity
• Traders, distributors, and suppliers of automotive cyber security

Scope of the Report

Market, By Region

• North America
• Europe
• Asia Pacific
• Rest of the World

Market, By Form

• In-Vehicle
• External Cloud Services

Market, By Security

• Endpoint Security
• Application Security
• Wireless Network Security

Market, By Application

• Telematics Systems
• Infotainment Systems
• Powertrain Systems
• Body Control & Comfort Systems
• Communication Systems
• ADAS & Safety Systems

Market, By Light-duty Vehicle

• Passenger Vehicle
• Commercial Vehicle

Market, By Electric Vehicle

• Battery Electric Vehicle (BEV)
• Hybrid Electric Vehicle (HEV)
• Plug-In Hybrid Electric Vehicle (PHEV)

Available Customizations

MarketsandMarkets offers the following customizations for this market report:

• Detailed analysis and profiling of additional market players (up to 3)
• Detailed analysis of automotive cyber security technology for commercial vehicle market
• Detailed analysis of automotive cybersecurity for aftermarket

The global automotive cyber security market is estimated to be USD 1.34 billion in 2018 and is projected to grow at a CAGR of 23.16% during the forecast period, to reach USD 5.77 billion by 2025. The major growth drivers for the market are the growing number of connected cars and electronic content per vehicle and reinforcement of mandates by regulatory bodies for vehicle data protection. The increasing number of cloud-based applications in the automotive industry and technological advancements in the autonomous vehicle space can create new revenue generation opportunities for automotive cyber security manufacturers.

The global market is segmented by form, security, application, vehicle, electric vehicle, and region. The report discusses two form types, namely, in-vehicle and external cloud services. The in-vehicle segment accounts for the largest share of this market. This segment is driven by factors such as the increasing use of endpoint applications such as mobile, radio, and smart antenna in vehicles in developing economies and rising demand for in-vehicle applications such as telematics, ADAS, and infotainment.

The application security segment is estimated to be the fastest growing market for automotive cyber security, by security type. It is followed by wireless network security. The application security segment is estimated to experience significant growth due to the increasing sales of mid-size and luxury vehicles across the globe.

The powertrain system segment is estimated to be the fastest growing market for automotive cyber security, by application. The number of electronic applications in modern vehicles is increasing day by day. Modern vehicles have a powertrain system equipped with latest mechatronics technologies comprising electronic control units (ECUs). These ECUs are vulnerable to the threat of a cyberattack.

The passenger vehicle segment is projected to be the largest market for automotive cyber security. The market growth in this segment can be attributed to the increasing electronic content inside the vehicle that is controlled by ECUs. Moreover, passenger vehicles are connected to external cloud services for telematics and fleet management applications.

The extensive study has been done on four key regions, namely, Asia Pacific, Europe, North America, and the Rest of the World.

The Asia Pacific market is estimated to hold the largest market share and is estimated to grow at a significant CAGR during the forecast period. The market growth in the region can be attributed to the increase in vehicle production and rising adoption of connected vehicles. Expansion of leading OEMs and automotive component suppliers in developing economies such as China and India is also projected to drive the market growth in this region.

Some of the major restraints for the global market are the high cost involved in automotive cybersecurity and complex ecosystem with multiple stakeholders. Some of the major players in the global automotive cyber security market are Harman (US), Continental (Germany), NXP (Netherlands), Escrypt (Germany), and Vector (Germany). The last chapter of this report covers a comprehensive study of the key vendors operating in this market. The evaluation of market players is done by taking several factors into account such as new product development, R&D expenditure, business strategies, product revenue, and organic and inorganic growth.

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