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The global virtual reality in automotive market size was valued at USD 759.3 million in 2019 and is projected to reach USD 14,727.9 million by 2027, exhibiting a CAGR of 45.1% during the forecast period.
The increasing automation trend in the automotive industry is creating opportunities for virtual reality technology providers. The automotive industry is implementing this technology to provide an immersive and interactive experience for its customers. Also, the adoption for virtual training tools is increasing owing to the increasing demand for skilled and efficient workers and engineers. The implementation of the virtual reality (VR) technology is supporting the digital revolution across the automotive industry.
Virtual Reality is Supporting Automotive Industry to Deal with COVID – 19 Pandemic
The automotive industry is one of the highly impacted sectors during the pandemic. The demand for social distancing in factories and offices has slowed down the production of the industry. Similarly, the industry is witnessing a decline in sales amid the lockdown. However, the adoption of virtual reality technology provided new opportunities for automotive players to deal with the current situation. VR tools and simulators can offer proper professional training to the technicians by maintaining the required social distance. Similarly, new designs and prototyping can be achieved from a remote location with the help of a VR headset.
Furthermore, the implementation of a virtual reality showroom and in-house virtual test-driving environment for the customers is likely to boost sales. For instance, Vroom, the automobile dealer, is adopting the technology to showcase its new models in a remote location. The company will take the entire setup to the customers' place to offer them a driving experience in the virtual world. Thus, the market is likely to grow significantly post-pandemic.
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Escalating Demand for VR Simulator to Boost Growth
The VR simulator is exhibiting growing applications in the automotive industry. For instance, it is being widely used to create virtual environments for automobile manufacturers and dealer centers. In the automotive manufacturing unit, simulators can provide effective learning lessons to the new employees. Whereas, it can also be implemented for prototyping and designing of new cars.
For instance, the vehicle manufacturers of Skoda & Volkswagen group used the VR simulator for designing the exterior and interior of the model in 3D view. It offers a virtual car representation with features such as size, color, design, structure, and more. Also, these virtual designs helped the engineers of the company to check and detect the defects of the model. Similarly, it offers car assessment features for the customers at the dealer’s showroom. Customers can have virtual test drives and check the systems of the car such as parking assistance, and reverse view cameras. This is likely to drive the adoption of VR in automotive industry.
Adoption of Virtual Reality in Automotive Retail to Boost Sales Will Drive Growth
The VR technology offers vast advantages in marketing and sales for the automotive industry. VR offers an immersive experience for automobile marketing to create better customer engagement. With immersive marketing solutions, the company can offer virtual car driving experience to the customer. It helps car dealers to present their car designs and features virtually to the customers. Virtual marketing creates prolific influence on the customers and helps in boosting sales at showrooms.
This modern trend elevates customer engagement, buying experience, and drives the sales conversion. Thus, the immersive technology is increasingly deployed in the automotive industry for sales and marketing. For instance, in 2017 Jaguar Land Rover launched its electric model I-PACE virtually in London and Hollywood. The company offered a virtual experience of the car to the customers with the support of HTC headsets, Dell EMC, and creative agencies.
Similarly, the technology will offer customers to modify car configurations such as select color, accessories, and others as per their choice. This is likely to drive the adoption of virtual reality in this market in the near future.
Lack of Communication Flexibility in Training Might Hamper Market Growth
The virtual reality simulators and tools offer excellent solutions to train employees. However, virtual learning sessions might deteriorate human connection. Thus, owing to the communication gap, employees might not understand the purpose of the job and the organization's vision.
Additionally, the simulator lacks in providing flexibility during training sessions such as asking doubts and resolving them. This limited-fidelity simulator can demotivate trainees on site. This might further add to the complications during the practical hands-on services. Also, simulator sickness symptoms may undermine training effectiveness and might affect their usability. This is likely to hamper the virtual reality in automotive market growth.
Hardware Segment to Grow Rapidly Owing to Decreasing Headset Costs
Based on components, the virtual reality in automotive market is categorized into hardware, software, and content. The hardware segment is likely to gain a significant share in the coming years owing to the decreasing headset costs. Also, the rising investment by companies in the research and development of advanced VR devices is likely to boost the growth of this segment in coming years.
The software segment is likely to gain traction owing to the increasing availability of innovative virtual software solutions. For instance, Autodesk Inc offers VRED software for virtually designing, concept modeling, and prototyping the vehicle. Similarly, the content segment is observing a steady growth owing to the increasing demand for creating virtual environments for customers’ engagement and employee training solutions.
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Virtual Showroom Segment to Grow Steadily Backed by Better Customer Experience
The applications covered in the market are designing & prototyping, training, virtual showrooms, research and development, others. The training application segment is expected to gain traction owing to its substantial training capabilities for engineers and technicians in the automobile industry. It also provides a safe environment for trainees and helps to reduce the error rates significantly.
Virtual showrooms are also exhibiting a rising demand to provide better customer experience. For instance, Audi designed a virtual showroom in London, which provides simulated designs of its cars and other accessories. With the provision of wearable devices, it offers an interactive experience to its customers. This is likely to uplift the growth of the segment.
The designing and prototyping segment is likely to have the maximum market share for virtual reality in automotive as it aids in reducing production time and money. For instance, SEAT automobile manufacturers reported a 30% reduction in the designing and prototype time with the adoption of virtual reality. Ensuring the safety of humans and self-driving cars, the automobile research and development team is focusing on implementing VR technology. This is likely to boost the growth of the segment.
North America Virtual Reality in Automotive Market Size, 2016-2027 (USD Million)
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North America is expected to hold the maximum virtual reality in automotive market share in the forecast period. The U.S. is likely to grow rapidly as the prominent automakers such as Ford Motor Co, Tesla, and General Motors are highly spending on technological research and development. According to the American Auto Council, the U.S. auto production is likely to reach 12 million by the year 2025. This is likely to drive the market growth in the region.
Europe’s automotive industries are the early adopters of VR technology. The automotive companies such as Renault, Jaguar Land Rover, BMW, and Volkswagen have collaborated with the VR solution providers. This is boosting the demand for VR technology in the region. Germany and France are expected to gain traction with the rising implementation of virtual showrooms by the automobile dealers. Similarly, with the government initiatives and automobile sector investment, the U.K. is likely to create opportunities for the technological shift in the automotive industry.
Asia Pacific is likely to grow rapidly owing to the increasing automotive industries in countries such as China, Japan, and India. China's automotive industries are highly investing in the technology to gain skilled and efficient technicians at the manufacturing units. Japan is growing significantly with the introduction of 5G technology, virtual and augmented reality applications, and government support. Further, Latin America and the Middle East & Africa are expected to have steady growth of the market for virtual reality in automotive in near future. GCC is likely to show encouraging trend by adopting the technology across the automobile industry. For instance, in 2019 UAE’s Galadari Automobiles Co. Ltd collaborated with the virtual and AR technology agency Virtuality, to launch first Mazda Interactive Automotive Showroom.
Key Companies are Focusing on Digitizing Automotive Industry
The VR solution providers are collaborating with various automobile companies to enhance the production units. Companies such as Microsoft Corporation, Unity Technologies, and Continental AG are developing in-vehicle virtual infotainment systems. Whereas, companies, namely, Google LLC, Oculus, and Autodesk Inc., are providing VR headsets, simulator, and glasses for different applications to automobile companies.
Robert Bosch GmbH is highly investing in the research and development of technologies to enhance automotive production. The company aims to provide virtual reality solutions to ease down the manufacturing process, improve maintenance efficiency, and the technical support of the industry. The company has collaborated with car manufacturers to provide virtual training solutions to enhance its manufacturing unit potential.
February 2020 – Robert Bosch GmbH collaborated with Ford Motor Co. to develop a new VR tool for training the technicians at the manufacturing unit. Bosch developed its automotive services training tool in 2019 and Ford first implemented it for a powertrain repair course for all its electric SUV.
January 2020 – Robert Bosch GmbH launched its new product, Virtual Visor in Las Vegas at the 2020 CES tech show. The Virtual Visor offers hands-free operation while driving. Once started, it requires no more actions from the driver.
An Infographic Representation of Virtual Reality (VR) in Automotive Market
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The market research report for virtual reality in automotive highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest industry trends and analyzes technologies that are being deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the market.
Value (USD Million)
The global virtual reality in automotive market is projected to reach USD 14,727.9 million by 2027.
In 2019, the market was valued at USD 759.3 million.
The market is projected to grow at a CAGR of 45.1% in the forecast period (2020-2027).
The hardware segment is likely to lead in the market
The adoption of VR in automotive retail is driving the market growth.
Microsoft Corporation, Autodesk Inc., Continental AG, Robert Bosch GmbH, and Google LLC. are the top players in the market.
North America is expected to hold the highest market share.
The training segment is expected to grow with the highest CAGR.
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