According to a new report by Allied Market Research ( the global connected cars market is forecast to reach $141 billion by 2020, growing at a CAGR [compound annual growth rate] of 32.7% during the period (2014 – 2020).

Integrated connectivity solutions segment is expected to emerge as a preferred connectivity solutions for connected cars, surpassing embedded connectivity solutions segment in 2016. North America currently garners major market share and would maintain the position throughout the forecast period.

The availability of faster communication networks, advanced connectivity solutions and a user friendly interface should drive global connected car market, says Allied Market Research. Also, an enhanced driving experience, offered by connected cars and favorable rules and regulations across numerous countries will fuel the market growth.

The research group says North America is a relatively mature market for connected cars, as it was amongst the first regions to adopt this new technology. The European connected car market will foresee tremendous growth with the passing of Ecall regulations by the European Parliament. This rule mandates the installation of an Ecall System for every car in production from the year 2015. The eCall system automatically alerts the nearest help service in case of an emergency. This system cuts the emergency service response time by 50% to 60%.

The European Union claims that mandating the eCall system could approximately save up to 2,500 lives every year. Following this, Russia and Brazil also look forward to implement a similar kind of legislation into their country. This would also help in tracing cases of car thefts.

A research undertaken by the US National Highway Traffic Safety Administration (NHTSA), states that the American government is also looking forward to mandate the use of M2M connectivity solutions into the vehicles. In the years to come, Asia-Pacific should be a prominent automobile market for connected cars, owing to rising disposal incomes and a growing population of tech savvy youth in this region.

2G, 3G and 4G/LTE are the network technologies that are deployed for connectivity within the cars. Among these, 2G technology used for providing connectivity will gradually fade out, and will be replaced by the 3G and LTE technologies, predicts Allied Market Research. Some of the prime reasons for this technological shift would be the rapidly changing telecommunication technology and the introduction of faster & reliable communication networks.

Integrated, tethered and embedded are the network solutions used in connected cars. In 2013, embedded connectivity solutions led the market with a share of almost 40% of the global connected cars, followed by integrated and tethered connectivity.

However, Allied Market Research says the prevailing scenario should change by the year 2020, as integrated solutions would lead the market by accounting about 45% of the market share. Freedom of choice provided to the users to customize their connectivity device, data plans, etc. according to their preference and stipulated budget in integrated solutions could be the main reason for this drastic change in its market share.

Embedded connectivity solutions would give a tough competition to the integrated connectivity solutions in terms of revenue generation and would hold second position in the market due to its ability to function even in the absence of a mobile connection or a drained battery. In embedded connected cars, the SIM or connectivity device is in built, enabling the system to send an SOS in case of an emergency.