Automotive On Board Unit (OBU) Market Size, Share, Growth, and Industry Analysis, By Type (Sngle-chip OBU (Without IC Card Interface), and Double-chip OBU (With IC Card Interface)), By Application (Commercial Vehicle, and Passenger Vehicle), and Regional Forecast to 2032

AUTOMOTIVE ON BOARD UNIT (OBU) MARKET OVERVIEW

The global Automotive On Board Unit (OBU) Market size expanded rapidly USD 2.3 billion in 2023 and is projected to grow substantially USD 5.24 billion by 2032, exhibiting a prodigious CAGR 9.1% during the forecast period.

The market for automotive onboard units (OBUs) is witnessing a massive upsurge owing to the growing use of telematics, connected vehicles, and advanced driving assistance systems (ADAS). An onboard unit is an essential unit in modern vehicles as it controls processing from all other vehicle systems. It ensures connectivity and communication with networks and other systems external to the vehicle, such as vehicle-to-everything (V2X). As vehicles become more advanced and self-sufficient, OBUs are crucial in augmenting safety, navigation, and the entire driving experience.

Some of the primary aspects driving the growth of the market are the increase in the demand for electric vehicles and a focus on connectivity as well as the regulatory enactments aimed at enhancing safety on the roads by means of advanced vehicle technologies. Moreover, the development of the Internet of Things and the fifth-generation of mobile networks has also stimulated the use of On-board Units (OBUs) since data processing can be performed in real-time through effective communication between vehicles and the infrastructure.

The regional dynamics of the OBU market, North America and Europe hold key positions owing to their well-developed automotive sector and high amounts of expenditure on smart infrastructure development. However, Asia-Pacific is predicted to witness faster development on account of growing vehicle manufacturing, the rise in urban population, and state policies aimed at smart transport systems.

GLOBAL CRISES IMPACTING AUTOMOTIVE ON BOARD UNIT (OBU) MARKET COVID-19 IMPACT

Automotive On Board Unit (OBU) Market Had a Negative Effect Due to disruption in global automotive production and supply chains

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

The COVID-19 outbreak has adversely affected the Automotive Onboard Unit (OBU) markets owing to the halt in global automotive manufacturing and supply chain operations. The restrictions, namely lockdowns, have resulted in a decrease in production level of vehicles thus decreasing the need of OBUs. Also, rescheduling of works on smart city infrastructural development and connected transportation systems contributed to the slowdown of the market. However, with the auto industry’s recovery on the horizon and the current trends of connected and driverless vehicles paving the way in the long-run, demand is anticipated to be on the positive side even after the pandemic.

LATEST INDUSTREY TREND

"Integration of 5G technology within OBUs, enabling ultra-low latency and high-speed communication to Drive Market Growth"

The Automotive On-Board Unit (OBU) market  is witnessing significant expansion owing to the developments in V2X (Vehicle-to-Everything) technologies that facilitate the transfer of information to and from a vehicle to any other entity thereby improving traffic efficiency and safety. One of the remarkable tendencies observed is the introduction of 5G technology in the onboard unit which allows communication at ultra-low latencies and high speeds. This improvement allows applications such as advanced driver-assistance systems (ADAS), and self-driving cars, hence the development of smart transport systems. The growing penetration of 5G-capable OBUs is expected to change the landscape of vehicle connectivity making it more effective and safety aiding road networks.

AUTOMOTIVE ON BOARD UNIT (OBU) MARKET SEGMENTATION

BY TYPE

Based on Type, the global market can be categorized into Sngle-chip OBU (Without IC Card Interface), and Double-chip OBU (With IC Card Interface)

• Single-chip OBU (Without IC Card Interface): Single-chip OBUs are space efficient and budget friendly device that incorporates all the required features within a single chip, eliminating the need for interfacing with an IC card. These OBUs are common in primary toll collection systems and fleet management systems. Their straightforward structure and reasonable prices are best suited for less developed regions.
• Double-chip OBU (With IC Card Interface): Dual-chip OBUs come equipped with an extra chip that provides an IC card interface that adds advanced features such as secure wallets and improved voice communication. Such OBUs are widely applied in areas where sophisticated tolling and smart transportation systems are already in place. Due to their enhanced security and functionality, these Obus fulfill the ever-increasing demand for connected cars and self-driving vehicles.

BY APPLICATION

Based on application, the global market can be categorized into Commercial Vehicle, and Passenger Vehicle

• Commercial Vehicle: In freight mobility, OBUs are usually deployed for the purposes of electronic tolling, monitoring fleet activities and tracking the whereabouts of vehicles. Such devices ensure lucrative investments by improving the route optimization, lowering the operational costs, and securing vehicles from logistic threats. This is important for companies that are engaged in long haul transport as effective distribution and regulatory compliance are highly interrelated.
• Passenger Vehicle: OBUs are used in passenger vehicles for tolling, parking, and connecting with smart cities among other applications. These systems are aimed at providing drivers with comfort by providing seamless payments systems and quicker movement of cars within the city. Further, the OBUs in passenger vehicles enable embedding of some futuristic technologies like self-driving cars that communicate with everything (V2X) inclusively.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.                  

DRIVING FACTORS

"Rising Demand for Smart Transportation Solutions to Boost Market Growth"

The rising use of smart transportation solutions such as electronic toll collection systems and fleet management systems underpins the Automotive OBU market growth. With the demand for effective and safe traffic treatment, OBUs are increasingly becoming necessary in facilitating timely information provision and management of vehicle movements along given routes.

"Government Initiatives for Road Safety and Smart Infrastructure to Drive Market Growth"

The Automotive OBU market growth can be attributed to the increasing government regulations and incentives aimed at enhancing road safety through the installation of vehicle communication systems. Nations are focused on building smart transport systems, which call for the use of OBUs to improve communication and information sharing, thereby increasing road safety and improving transportation efficiency.

RESTRAINING FACTOR

"High initial cost of implementation and integration with existing systems to Potentially Impede Market Growth"

One of the primary inhibiting factors for the Automotive On Board Unit (OBU) market is considered to be the high upfront implementation costs and the integration with the existing systems. A number of fleet operators and transport companies operate within budget constraints, making it impossible for them to embrace such sophisticated systems especially in developing economies. In addition to this, the expenses for repairing and upgrading also restrict the technology from widespread appropriation.

OPPORTUNITY

"Growing adoption of smart transportation solutions and connected vehicle technologies To Create Opportunity for the Product in the Market"

One of the new opportunities present in the Automotive On Board Unit (OBU) market is the increasing use of smart transportation systems and connected vehicle technologies. Given the cities and states are beginning to invest in smart road infrastructure, including road pricing systems, it is necessary to integrate OBUs into the systems for navigation, traffic management and electronic toll collection. This trend bodes well for the future growth of OBUs in commercial as well as private vehicles. Additionally providing the scope for OBUs in commercial fleets and individual cars enhances the growth prospects.

CHALLENGE

"High cost associated with advanced OBU technology and infrastructure requirements for deployment Could Be a Potential Challenge for Consumers"

One of the prevailing concerns in the Automotive On Board Unit (OBU) market can be concluded as the high expense, associated with the advanced OBU technologies and infrastructure costs involved in the deployment. Introduction of OBUs entails hardware and software upgrade costs in addition to the existing infrastructure integration costs, which may prove difficult for some regions and organizations. More so, the fact that there is a need to achieve compatibility across many vehicle types and manufacturers, also adds to the impediment to the growth of the market.

AUTOMOTIVE ON BOARD UNIT (OBU) MARKET REGIONAL INSIGHTS

• NORTH AMERICA

The United States Automotive on Board Unit (OBU) market has its kingpin in North America, largely owing to its superior transport systems and commitment towards road safety and traffic control measures. There are high penetration levels of vehicle-to-everything (V2X) communication technology in the region, as this is enhanced by robust government funding for smart transportation networks. Furthermore, the innovation and enhancement of OBUs in the US is fast, due to the presence of many automobile and technology industry players in the region. This emphasis on putting smart technology into vehicles gives north America an upper hand in the OBU market.

• EUROPE

The Automotive On Board Unit (OBU) market share is at its peak in Europe due to the safety regulations in place and the high uptake of in vehicle communication. This has increased the adoption of OBUs owing to the European Union efforts towards the implementation of smart transport systems such as C-ITS. This has been the case in the case of many major automakers and technology developers based in Germany, France, and other countries, who have been involved in several projects in the field of OBUs. Moreover, the existence of robust Government support towards the easing of traffic and safety of the roads, gives Europe an added advantage in this market.

•  ASIA

Asia is the clear leader in the Automotive On Board Unit (OBU) market share owing to the expanding automotive industry as well as technological advancement in transportation in countries such as China, Japan and South Korea. In addition to this, several government programs encouraging road and vehicle safety, urban transport improvement and vehicle and technology acceptance have fuelled the adoption of the OBU in the route covered. There is also high demand for the OBUs as a result of China advocating for electric as well as self-driving cars. In addition, better development of smart transportation infrastructure investments is enhanced Asia's dominance in the market of OBUs.

KEY INDUSTRY PLAYERS

"Key Industry Players Shaping the Market Through investing in advanced technologies that enhance vehicle-to-everything (V2X) communication and improve road safety"

The Automotive On Board Unit (OBU) Market is being driven by weighty investments in advanced technologies that improve vehicle-to-everything (V2X) communication and road safety, among key industry players. In particular, these companies are working on creating OBUs that would have high connectivity and support applications such as tolling, fleet management, traffic monitoring, and so on. Moreover, it is anticipated that the proliferation of OBUs will be facilitated by strategic alliances with automobile manufacturers and governments for the development of smart transportation systems. Major player’s offering River, an intelligent mobility and logistics solution prepares the market for growing opportunities oriented toward intelligent mobility and efficient logistics thereby fueling the market growth.

LIST OF TOP 10 COMPANIES

• Continental (Germany)
• Q-Free (Norway)
• Dynniq (Netherlands)
• Commsignia (Hungary)
• Neusoft (China)
• Danlaw (U.S.)
• SolarEdge Technologies (Israel)
• Movyon SpA (Italy)
• Gohigh Networks (China)
• CiDi (China)

KEY INDUSTRY DEVELOPMENTS

September 2023: One industrial development in the Automotive On Board Unit (OBU) Market is announced by Continental AG. They recently achieved a remarkable progress in the market for Automotive On-Board Unit (OBU) by launching 5G based OBU that is aimed at enhancing the vehicle communication systems for future applications of V2X. This OBU compatible with the present LTE as well as the future 5G Network facilitates better connectivity for high end driving features like Cooperative Intelligent Transport Systems (C-ITS). This comes in tandem with Continental’s efforts to enhance road safety and manage traffic more efficiently by ensuring effective vehicular communication with the infrastructure because this will be necessary in environments of self-driven and semi-driven vehicles.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

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