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The global intelligent transportation system market size was valued USD 21.82 billion in 2020 and is projected to grow from USD 22.91 billion in 2021 to USD 42.80 billion in 2028, exhibiting a CAGR of 9.34% during the forecast period. The market is surging with the growing smart city initiatives, technological advancements in transportation, and the growing need for efficient traffic management, fostering substantial market growth.
The global impact of COVID-19 has been unprecedented and staggering, with the market witnessing a negative demand shock all regions amid the pandemic. The sudden fall in the CAGR value is attributable to the lockdowns induced in countries due to the pandemic.
Road traffic congestion is a major problem globally, causing massive loss to economic productivity. This is primarily occurring because of a lack of infrastructure growth compared to the growing number of vehicles on roads due to cost and space constraints. Many nations are implementing a strategic plan of intelligent transportation systems to reduce road traffic congestion and accidents through advanced safety systems by wireless communications. The same is done through automatic electronic toll collection systems, pedestrian safety systems, traffic signals, automated vehicle systems, and wireless devices.
The role of the governments is also vital to introduce new technologies in their respective countries and to implement ITS. The impact of growing traffic congestion on the environment is harsh. Implementing an intelligent transportation system leads to ultimate benefits such as powerful and wide-ranging mobility, safety, and the environment. In addition, the implementation of such systems provides better traffic commuting. It also increases the efficiency of vehicles by lowering the burning of fuel from vehicles at signals. These systems also help nations to lower air pollution as well as prevent loss of economy.
Other notable benefits of ITS include reduced road fatalities and comfortable passenger transit. These systems allow all the road and transportation infrastructure systems to be fully connected, leading to a wide range of applications for users. The countries implementing ITS are likely to have a better future as the world enters the era of connected and autonomous cars.
Covid-19 Impact: Slowdown of Ongoing Projects & Mobility Restrictions to Hamper Growth
The lockdown and economic crisis induced due to the COVID-19 pandemic has severely impacted the financials for many transit authorities in 2020. The COVID-19 crisis is creating uncertainty in the market, disruption of supply chains, decline in businesses, and increasing panic among customer segments.
The importance of ITS is growing considering the increasing urbanization and subsequently rising travel time. It provides a seamless digital solution for traffic management and also reduces the need of a worker to operate it manually. Moreover, increase in single occupancy vehicles commuting particularly in suburbs & main cities further drives the need for such systems. The adaptive traffic signal controllers of ITS contribute to the environment by reducing CO2 and NOX emissions, as waiting time for vehicles at the signals and intersections is reduced significantly.
Increased demand for integrated, biometric, sensor based technology, implementation of contactless & mobile payment, ticketing technologies across public transit will impact positively the market outlook worldwide post COVID-19.
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Arrival of Autonomous and Connected Cars and Emerging Opportunities
The increasing number of automated and connected cars on the roads makes the transportation infrastructure future-ready. Also, transportation agencies need to be prepared for the future. Many ITS service providers deliver their expertise in design, planning, implementation, and tasks to improve solution and system performance. The increasing urbanization, rising disposable incomes, and need for advanced vehicles to ease the driving experience have propelled many transportation service providers to demand a well-connected transportation system, improved infrastructure, and improved road safety. In addition, upcoming smart city projects, advanced communication networks, and government initiatives for smart development in China, India, Singapore, Dubai, and other emerging countries will create new opportunities for market growth.
Advancements in AI and VR to Bring Revolutionary Changes in ITS Technologies
The increasing advancements in artificial intelligence and virtual reality show promise to enhance transportation networks across the globe. These technologies include a head-up display for motor transit and creation of visualization. They help drivers and they aid other transportation system users. AI has the potential to create changes in the modeling of the system.
Traffic management solutions providers are adopting AI. For instance, in March 2020, Lilin - a Taiwanese manufacturer of IP video-based systems - unveiled an AI-based traffic management system named Aida ALPR series along with a range of surveillance cameras and other innovative city equipment. This complete system provides accurate object detection for plate recognition, vehicle speed detection, parking spot detection, truck, motorbike, and pedestrian violations.
Rising Road Traffic Congestion to Drive Market Growth
The growing number of vehicles on the road and the lack of adequate transportation infrastructure results in traffic congestion. The rising road traffic congestion, in turn, leads to a negative impact on the environment due to vehicle emissions and may cause an increase in road fatalities. Nearly 36,600 deaths were reported due to traffic accidents on the U.S. roadways in 2018, and around 1.35 million deaths across the globe were reported due to road crashes.
Government Investments in Advanced Traffic Management Solutions to Fuel Market Growth
Active funding by the respective governments for planning, designing, and implementing ITS is likely to drive the intelligent transportation system market growth during the projected period. Governments in many countries are collaborating with private partners to take active measures towards minimizing traffic congestion. Intelligent transport service providers also support the government by providing expertise on implementing ITS in the transportation infrastructure.
Financial Crisis in Some Emerging Economies to Limit Technology Adoption
Ongoing financial crisis in some parts of the world may hamper the market growth to some extent. The implementation and deployment of such intelligent systems requires active investments from the government. The COVID-19 pandemic has caused a further surge in financial crisis in many countries, which may act as a roadblock to market growth.
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Advanced Traffic Management System Segment to Grow Substantially over 2021-2028
Based on type, the market is segmented into the advanced traffic management system (ATMS), advanced traveler information system (ATIS), advanced public transportation system (APTS), advanced transportation pricing system (ATPS), and others. The advanced traffic management system (ATMS) segment is anticipated to dominate the forecast period. The increasing investment by the government in this segment, use of the latest technologies in the system to ensure safe and smooth commutes, and the regional department of transportation’s development in smart infrastructure, owing to lower traffic congestion, is likely to boost the growth of this segment in the market.
The advanced public transportation system (APTS) segment is also estimated to show good growth in the ITA market over the forecast period attributing to the rising development of the bus route planning and structure in some countries. The advanced traveler information system (ATIS) segment is also expected to show good growth in this market over the forecast period due to the rising usage of smartphones to gain information regarding the weather and all modes of transport. The advanced transportation pricing system (ATPS) segment is also projected to show steady growth in the market over the forecast period. The increasing development of e-toll collection centers in many countries is driving the growth of this segment in this market.
Asia Pacific Intelligent Transportation System (ITS) Market Size, 2020 (USD Billion)
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Asia Pacific to Dominate Spurred by Increasing Traffic Congestion
By region, the market has been segmented into Europe, North America, Latin America, Asia-Pacific, the Middle East, and the Rest of the World.
Asia-Pacific region currently dominates the global market, and is expected to have the significant contribution in this market over the forecast period. China is second leading the market in this region owing to funding by the Chinese government to implement the ITS in the country. South Korea is the leading country with the most considerable financing in this region for ITS deployment.
Europe is expected to show significant growth in the market over the forecast period. The U.K. is a leader attributed to a substantial deployment of ITS in the country for public transportation. Also, other European countries also contributing towards development of this market. For instance, France has funded around 8.5 million euro for the development of ITS from 2016-2020.
North America is projected to show steady growth in this market over the forecast period owing to the implementation of ITS by Canada at a slower rate. The U.S. among the region is leading in contributing to growth of the region due to its FAST Act, use of advance technology and rising adoption ratio, and overall government involvement for smart cities project.
Latin America is also projected to show good growth in the market as Brazil and Mexico support the ITS planning and deployment in the countries.
The markets in the Middle East & the Rest of the World regions will experience rapid growth. This can be attributed to the early adoption of advanced technologies and the government’s initiatives like free trade zones in the UAE, which have sensed opportunities in the automotive industry.
Key Market Players Emphasize Collaborations for Better Design, Planning, & Implementation of ITS Solutions
The key companies are collaborating with expert ITS companies for design and product development. They are also developing advanced products for hassle-free and better service. Furthermore, many small enterprises are also working with the government to provide better transportation services.
At present, many small market companies are also great players withholding substantial intelligent transportation system market share. The dominance of the key players is also current owing to the provision of advanced and developed products. Key companies leading the market are Denso, Siemens Ag, EFKON GmbH, and Hitachi, among other prominent players.
Kapsch TrafficCom AG and Axxes SAS formed a joint venture for designing, planning, and implementing an electronic toll collection service.
An Infographic Representation of Intelligent Transportation System Market
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The market research report covers a detailed analysis of the market. It focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the current market trends and highlights key industry developments. In addition to the aforementioned factors, the report delivers an in-depth market analysis of several factors that have contributed to its growth over recent years.
Value (USD Billion)
Fortune Business Insights says that the global market size was USD 21.82 billion in 2020 and is projected to reach USD 42.80 billion by 2028.
In 2020, the Asia Pacific market size stood at USD 15.07 billion.
The market will grow at a CAGR of 9.34% during the forecast period (2021--2028).
Advanced Traffic Management System (ATMS) is the leading segment in the global market in 2020.
Rising road traffic congestion and the rising use of advanced technologies in ITS systems are vital to the market driver.
DENSO CORPORATION, Siemens AG, and Hitachi Ltd. are the top companies in the market.
Asia Pacific held the largest share in the market in 2020.
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