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The global traffic signal controller market size was valued at USD 4.19 billion in 2021. The market is projected to grow from USD 4.62 billion in 2022 to USD 11.76 billion by 2029, exhibiting a CAGR of 14.3% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with traffic signal controller experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global traffic signal controller market exhibited a decline of 13.9% in 2020 as compared to 2019.
With advanced surveillance tools, the Traffic Signal Controller (TSC) has enabled traffic flow regulation efficiently on the existing road infrastructure. It has reduced unnecessary jamming of roads due to cross movements of vehicles resulting in the smooth flow of traffic and minimizing accidents. Moreover, it not only controls the traffic but also aids in maintaining rules and regulations. This will help develop smart infrastructure and improve road safety, thereby increasing the market trends of intelligent mobility management systems.
Furthermore, such controllers have enabled the coordination of traffic signals at adjacent intersections resulting in streamlining of the traffic movement. It also helps in the diversion of traffic at critical junctions.
Halts in Investment Contracts and Delay in Projects amid COVID-19 Impacted Market Growth
The impacts of COVID-19 stopped investment contracts more broadly and caused liquidity problems both during and after the pandemic.
Contractors and companies in the infrastructure industry, which depended heavily on labor and equipment, encountered liquidity problems as a result of rising debt levels and declining cash flows. The availability of components and equipment will continue to be impacted by supply chain disruptions, which will eventually have an impact on projects. The opening of several roads and other projects was postponed until 2021. Significant assets such transportation infrastructure saw a drop in demand and usage due to the lockdown. Even after COVID-19, this kept having an impact on demand and revenue generation.
A Michigan-based transportation data management company, MS2, launched the “Daily Traffic Volume Trends (DTVT)" traffic dashboard to provide timely information for monitoring traffic impacts. According to their data, overall national traffic dropped by up to 65%. Similar statistics have been provided by Google; the reduction in traffic volumes ranged from 40% to 65% by the state. Some companies, such as Movebr and TTI, used this situation effectively to complete or upgrade traffic control systems. The traffic signal industry has also seen a positive impact in terms of companies' initiatives to overcome the loss in COVID-19, and they started getting projects and contracts with the controller manufacturers. For example, in 2020, 'The Korea Bizwire,' the Korea Road Traffic Authority selected 80 intersections in significant urban areas of the region where gridlock is severe or traffic accident-prone areas are higher and installing new traffic signals at the intersections to help in reducing accidents and increasing traffic speed.
During the COVID-19 lockdown, traffic controller goods and services experienced robust demand. A number of new projects were unveiled, and an increase in client orders in 2021 sparked actions that led to the reopening of markets in the majority of regions. Many players active in the adaptive traffic control system market are currently focusing on designing adaptive traffic control systems to support various intelligent city traffic applications such as Transit Signal Priority (TSP), eco-driving assistance, and message broadcasting. The emphasis on developing smart cities and urban planning systems has witnessed significant growth rate in recent years. This critical parameter resulted in a substantial impact on the rise of the camera-based traffic surveillance system market.
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Smart City Projects Worldwide to Impact Market Growth Opportunities Positively
Smart cities are imagined as urban settings where various IoT and ICT solutions are safely connected to control various city operations. The growing urbanization trend and citizens' demand for a higher quality of life have pushed the adoption of smart city technologies. Cities with growing populations, such as Mumbai, Tokyo, and New York, face difficulties managing their infrastructure and providing services. Smart cities can provide better commuter experiences overall by reducing traffic congestion, streamlining traffic flow, enhancing road safety, and more. In developing nations where parking spaces and roads are already at capacity, autonomous technology could help tackle the loss of time and energy.
With the early deployment of electric vehicles and smart mobility, the Chinese government has seized the lead. In a number of Chinese cities, smart operation sensors that regulate traffic signals, traffic flow, and other techniques to manage traffic congestion are already in use. Similar to this, India's national government initiative Smart Cities Mission works with state governments to create smart cities. As part of the project, USD 27.60 billion had been invested as of March 2021, while projects worth USD 5.40 billion had already been finished.
These projects require large capital investment. Hence, to successfully implement these projects in India, public-private partnerships are a major area of focus. Hence, there is a rising trend of smart city initiatives, especially in India and China, which include the most number of cities (46 and 102, respectively) with a population of more than 1 million, where the potential for retrofitting smart city concepts is considerable.
Rapid Urbanization Coupled with Urban Traffic Congestion to Drive Market Growth
Owing to increasing urban traffic congestion, many governments are taking initiatives through their regulations and implementing solutions and projects of smart cities and traffic management systems to deploy smart services. For instance, in 2019, the Government of India introduced ITMS in its capital Delhi. Moreover, this Intelligence Traffic Management System (ITMS) is an AI initiative deployed by the Delhi Police. It has used the 3D radar-based Red-Light Violation Detection Camera (RLVD) system at 24 junctions across Delhi to monitor red-light violations and a gantry-mounted radar-based system to detect over-speeding.
Further, this system includes high-resolution cameras with sensor-based real-time traffic volume count technology, advanced controllers, and Google maps for efficient operation of traffic management. Additionally, governments in emerging economies, such as Dubai, Singapore, China, India, South Korea, and Japan, are aimed at the smart development of their economies. Such initiatives are expected to drive the traffic signal controller market growth in the coming years.
Increased Government Initiatives for Traffic Management System to Boost Market Growth
Due to increasing city traffic congestion, many governments are taking initiatives such as smart cities and traffic management systems. For instance, in 2019, the Government of India introduced ITMS in its capital Delhi. Intelligence Traffic Management System (ITMS) is an AI initiative deployed by the Delhi Police. In this system, Delhi Police will use the 3D radar-based Red-Light Violation Detection Camera (RLVD) system at 24 junctions across Delhi to monitor red-light violations and a gantry-mounted radar-based system to detect over-speeding.
Another great initiative is the Georgia Navigator. It is an Advanced Traffic Management System used in the U.S. state of Georgia. Georgia Navigator uses video detection cameras rather than point detectors to gather traffic flow data. All devices are connected by buried optical fiber, which is linked to the Transportation Management Center (TMC) in Atlanta. Such initiatives are expected to drive the growth of the market.
Increased Demand for Efficient Road Networks Around the Globe to Propel Market Growth
Developed economies are now focusing on an environment-friendly commute that is giving rise to technologies such as electric vehicles, connected vehicles, and autonomous vehicles. These vehicles function by gathering data from their surroundings, exchanging it with other vehicles, connecting to the smart transportation infrastructure, and giving transportation authorities access to real-time traffic information for better road management and infrastructure development.
Moreover, these technologies also need infrastructural support for smooth functioning. The companies involved in the camera-based traffic surveillance system business are actively contributing significantly to growing the market. For instance, Kyosan Electric’s Autonomous Distributed Signal Control (ARTEMIS) adaptive road traffic signal controller relieves road traffic congestion and cuts down CO2 and nitrogen oxide emissions.
The time-based conventional controller utilizes traffic data collected via active vehicle sensor, and currently, the use of a new technology-based product named ARTEMIS has resolved this hurdle by using the road TSC itself with access to real-time traffic updates at each signal intersection.
Therefore, apart from orderly moving traffic and reducing the frequency of accidents, smart controllers contribute to sustaining the environment by reducing the pollution caused by unnecessary halts and a long row of vehicles accumulated due to traffic in cities.
The surge in demand for connectivity solutions, encouraging development and promotion of green fuel, and the rising need for timesaving traffic management solutions are responsible for the growing demand for traffic signal controllers across the globe.
Absence Uniform and Standardized Technologies Could Hinder Market Growth
A precise mechanism helping to create a successful traffic management system is the traffic signal controller. Although it will be run continuously, there are some operational restrictions. Only a standardized and uniform technological infrastructure supporting them would ensure the overall system operates effectively and lasts a long time. Due to internet connectivity, the widely used modern surveillance system and its IP-based cameras are exposed to a number of vulnerabilities, making them easy targets for hackers.
The system's cyber security may suffer from a lack of standardized and uniform technological instruments, which could result in accidents and pose a threat to road safety. Although traffic management systems are governed by various norms, there is not presently a common encoding standard for RFID tags. A foreign car could cause system faults when it is encountered by the network. Thus, the combination of all these factors, together with data security, high capital expenditure, and privacy concerns, is the main factor limiting the expansion of the global industry.
The use of smart traffic signal controllers is also significantly growing. However, there are numerous privacy and security problems because this system is heavily reliant on ICT and Internet of Things technologies. The IoT network used in the system has low storage and power capabilities and deals with a considerable amount of fluctuating data at a time. Hence, it is especially vulnerable to Denial of Service (DoS) attacks, focusing on the system's weakest part, such as the sensor node.
Radio Frequency Identification (RFID) is also heavily used in smart transportation and traffic systems to recognize the intended tag signal automatically. However, the RFID reader may accidentally read from several tags simultaneously, owing to a large number of nodes in a smart traffic light system. The system will receive incorrect data.
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Standard Controller Dominates Market Owing to Less Complex Structure and Cost
By product type, the market segments into standard controller and smart controller.
The standard controller segment secures the maximum global traffic signal controller market share in 2021, and is expected to lead the market during the forecast period. However, the market share of smart controller is projected to increase over the forecast period, owing to increasing demand for connected and autonomous vehicles. However, the standard controller segment will witness high demand due to the high cost of a smart controller.
Urban Segment to Capture Largest Market Share
Based on application, the global market is segmented into urban and suburbs.
The urban segment accounts for the largest global market share owing to various factors, such as the growing urban population and their traveling needs. Considering the low operating costs, connected and autonomous cars make them the preferred choice for customers. The growing concern related to increasing environmental pollution due to the propulsion of IC engine vehicles in developed countries of Europe and North America is expected to surge the demand for electric connected and autonomous passenger cars.
Rapid urbanization, improved living standards, and increasing high net worth of individuals have increased the spending capacity of individuals, which eventually increased vehicle sales which, in turn, caused traffic issues at major junctions. Also, there is a growing demand for these controllers in the suburbs owing to the concerns over road safety and traffic management in the suburbs. Hence, the suburbs segment is expected to grow at a substantial rate during the forecast period.
North America Traffic Signal Controller Market Size, 2021 (USD Billion)
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North America to Hold Largest Market Share due to Rising Popularity of Traffic Signal Controllers
North America stood at USD 1.59 billion in 2021 in the market of traffic signal controller. The region is likely to dominate the global market as it is home to many leading manufacturers. Furthermore, the rising acceptance of connected EVs is expected to bolster the market in the region in the coming years. The development of the market is also attributed to the presence of well-established infrastructure and technological giants.
Europe holds the second-largest position in the market, of which Germany ranks first in this regional market as major auto manufacturers are situated here. Furthermore, the government's strict regulations on road safety and increasing support of AI and automation will enhance the global market growth.
Asia Pacific traffic signal controller is anticipated to be the fastest-growing region during the forecast period. This region is anticipated to show the highest CAGR in 2022-2029. This region's growth is due to the high population in China and India, taking up more than 38% of the global population. As per the International Organization of Motor Vehicle Manufacturers (OICA), the annual automotive production in the Asia Pacific region has seen significant growth over the years owing to rising product demand and luxury features in vehicles. Several initiatives implemented by the governments in the automobile sector to revive the industry from the effects of COVID-19 are expected to bolster the market. Additionally, the region is showing interest in connected and autonomous vehicles; high urbanization and smart cities are expected to propel the market growth.
The Latin America region is expected to show steady growth during the forecast period. This is due to many underdeveloped and developing countries present in this region. The automobile market has struggled since way before the coronavirus pandemic; hence, the market is expected to show steady growth in the forecast period.
The Middle East & Africa region is expected to show steady growth during the forecast period. It is anticipated to exhibit a stable CAGR during the forecast period. As of 2019, automotive sales in the Middle East and North Africa reached 1.99 billion units. The sales volume has dropped by almost one-third since 2014. During this period, passenger car sales outperformed worldwide commercial car sales with 68.6 million to 26.3 million, respectively.
Significant Product Offerings by Econolite to Brighten its Market Prospects
German multinational Siemens AG specializes in power generation and distribution, intelligent building infrastructure, distributed energy systems, process and manufacturing industry automation, and digitalization. The business offers all the necessities needed for efficient urban traffic control on a global scale. The business offers sophisticated hardware and software solutions to manage and enhance traffic flow and road safety. Across 2,93,000 people work for Siemens AG in 200 locations around the world. Siemens completed the acquisition of Aldridge Traffic Controllers (ATC), an urban traffic control system provider in Australia, in 2021.
Econolite is a pioneer in providing traffic management solutions and collaborates with other firms to leverage their mutual expertise. In January 2021, Econolite announced its next-generation Advanced Transportation Controller software, EOS, has been added to the Florida Department of Transportation (FDOT).
An Infographic Representation of Traffic Signal Controller Market
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The market report provides a detailed analysis of the market research and focuses on key aspects such as leading companies, product types, and leading product applications. Besides this, the research report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors contributing to the market's growth in recent years.
Value (USD Billion) & Volume (Units)
By Product Type
Fortune Business Insights says that the global market size was USD 3.84 billion in 2020 and is projected to reach USD 10.06 billion by 2028.
In 2020, North America stood at USD 1.47 billion.
The market is projected to grow at a CAGR of 13.3% and will exhibit steady growth during the forecast period (2021-2028).
The standard controller is expected to be the leading segment in this market during the forecast period.
Increasing urban demands for efficient & smooth transportation services, rising urbanization and vehicles sales are the growth factor of market.
Aldridge Traffic Controller is the leading player in the global market.
The North America region dominated the market share in 2020.
Technological advancements in a connected and autonomous vehicle will help drive its adoption.
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