IT Spending in Automotive Market Size, Share & Growth By 2033

IT Spending in Automotive Market Overview

The IT Spending in Automotive Market size was valued at USD 198.34 million in 2024 and is expected to reach USD 301.4 million by 2033, growing at a CAGR of 5.37% from 2025 to 2033.

The IT spending in automotive market has rapidly evolved due to increasing digitization across manufacturing, supply chains, autonomous vehicles, and infotainment systems. In 2024, more than 70% of global automotive companies increased their IT budgets to integrate software-defined vehicle features and advanced analytics. Automotive firms have deployed over 65,000 connected platforms to monitor vehicle performance in real-time. The global automotive sector now incorporates more than 1.2 million embedded computing systems annually for diagnostics, automation, and telematics.

As of Q1 2025, the deployment rate of AI-powered manufacturing tools exceeded 43% among Tier 1 OEMs. Furthermore, over 400 auto plants worldwide now implement cloud-based ERP solutions for streamlined operations. IT spending is being influenced by the rise in smart factories, with 37% of new manufacturing units being designed as fully digital. The demand for blockchain in logistics and parts tracking surged by 29% year-on-year due to counterfeiting concerns. In addition, more than 58% of automotive R&D centers are investing in cybersecurity frameworks to mitigate growing cyberattack threats targeting connected cars and EVs.

Key Findings

DRIVER: Rising demand for autonomous and connected vehicles.

COUNTRY/REGION: United States with over 28% of global IT integration in automotive manufacturing.

SEGMENT: IT Services accounting for over 45% of total IT deployments in the automotive sector.

IT Spending in Automotive Market Trends

The IT spending in automotive market has seen transformative shifts driven by automation, electrification, and the integration of digital platforms. In 2023, more than 18 million vehicles were produced with embedded telematics systems, representing a 34% year-on-year increase. Approximately 41% of Tier 1 suppliers invested in machine learning tools for predictive maintenance. Cloud-based infrastructure adoption rose by 39% in automotive factories, enabling scalable operations and real-time analytics. The automotive sector now hosts over 15,000 AI algorithms deployed for route optimization, safety systems, and voice recognition features.

The implementation of 5G in automotive IT networks grew significantly in 2024, with over 62% of manufacturers integrating 5G modules for real-time vehicle-to-everything (V2X) communication. In the past year, more than 82% of European carmakers adopted digital twins for simulating production lines and enhancing quality control. IT spending in cybersecurity surged with $1.5 billion worth of anti-malware and network monitoring tools procured globally in 2024. Over 900 automotive firms worldwide are running IoT-based operations to monitor everything from assembly-line speed to logistics.

IT Spending in Automotive Market Dynamics

The IT spending in automotive market dynamics refers to the underlying forces and factors that influence how and why automotive companies allocate resources toward information technology. These dynamics include the drivers, restraints, opportunities, and challenges shaping the direction and intensity of IT investments within the industry. Drivers such as the growing demand for connected vehicles, autonomous driving systems, and smart manufacturing are pushing companies to increase spending on AI, IoT, cloud computing, and advanced analytics. At the same time, restraints like outdated infrastructure, high integration costs, and legacy systems limit the pace of digital transformation. Opportunities arise from trends such as the adoption of digital twins, cybersecurity solutions, and electric vehicle (EV) infrastructure, which open new areas for innovation and growth

DRIVER

Integration of Connected and Autonomous Technologies

The most significant driver in IT spending within the automotive sector is the integration of connected and autonomous vehicle technologies. As of early 2025, over 47% of vehicles globally feature advanced connectivity systems powered by edge computing and 5G integration. Vehicle-to-cloud (V2C) connectivity platforms have been deployed in more than 190 vehicle models worldwide. Automakers are prioritizing driver assistance systems (ADAS), and over 5.4 million cars were produced with Level 2 or Level 3 autonomy features in 2024. These systems rely heavily on IT components such as AI, neural networks, and centralized computing platforms. Additionally, more than 600 data centers now support real-time vehicle analytics, remote diagnostics, and software patching. Automotive firms have invested in over 8,000 AI engineers globally to support this transition.

RESTRAINT

Legacy Infrastructure and System Compatibility

A significant barrier to increased IT investment in the automotive market is the persistence of legacy infrastructure. Approximately 38% of manufacturing facilities in Europe and North America still rely on systems that are not cloud-compatible. Compatibility issues between old PLC (programmable logic controllers) and modern IT systems result in inefficiencies, often leading to system downtimes averaging 4.2 hours monthly per plant. Upgrading these systems requires high upfront capital, and over 41% of surveyed automotive SMEs reported budgetary constraints as a limiting factor. Additionally, over 19,000 software-based product recalls were recorded in 2023 due to system integration errors.

OPPORTUNITY

Expansion of Smart Manufacturing Platforms

One of the most promising opportunities lies in the expansion of smart manufacturing platforms. Over 560 new smart automotive manufacturing units are under construction globally as of Q2 2025. These plants are equipped with Industrial IoT (IIoT), enabling real-time data capture from sensors embedded in machinery and supply chains. In Asia-Pacific alone, over 2,100 robots per 10,000 employees were installed in automotive assembly lines, marking a major shift toward IT-integrated production. Blockchain adoption for supply chain transparency rose by 31% in automotive procurement processes. Furthermore, over 84% of global automotive companies are exploring cloud-agnostic IT platforms to prevent vendor lock-in and improve resilience.

CHALLENGE

Rising Costs of Software Development and Integration

One of the major challenges is the escalating cost of software development and integration. As vehicles evolve into “software-defined platforms,” the demand for real-time operating systems and functional safety compliance has grown. Over 70% of automakers reported increasing costs associated with embedded software, firmware updates, and licensing fees. It is estimated that each vehicle now carries an average of 110 million lines of code, leading to complex validation cycles. Moreover, 24% of development time is now allocated to cybersecurity and compliance tasks, further slowing product rollouts. The average cost of integrating a new digital dashboard system into a mid-range vehicle has exceeded $3,800, contributing to rising production costs.

IT Spending in Automotive Market Segmentation

The IT spending in automotive market is segmented by both type and application. The segmentation by type includes software, hardware, IT services, and autonomous vehicle technology. Segmentation by application spans automotive, manufacturing, transportation, and e-commerce. In 2024, over 62% of automotive IT budgets were allocated to software and services, while 38% went into hardware and infrastructure. More than 1.9 billion microcontrollers were shipped globally for use in automotive applications, showing strong demand in both core IT and vehicle-integrated systems.

By Type

Software: Automotive software systems have become a dominant area of IT investment. Over 77% of new vehicles launched in 2024 included custom-developed infotainment or driver-assistance software. The number of software-defined vehicles (SDVs) on the road has surpassed 85 million units globally. Automotive software platforms handle over 8 terabytes of data per vehicle per year, covering infotainment, ADAS, diagnostics, and navigation
Hardware: Hardware spending in the automotive industry has been driven by demand for control units, sensors, chips, and computing infrastructure. In 2024, more than 12 billion automotive-grade sensors were shipped worldwide. These include ultrasonic, radar, and lidar units integrated into vehicle safety systems. Over 4 million edge computing devices were deployed across automotive manufacturing facilities to enable real-time analytics.
IT Services: IT services account for the largest share of spending, supporting cloud management, system integration, cybersecurity, and digital transformation initiatives. As of Q1 2025, over 6,000 automotive companies worldwide were actively engaged with managed IT service providers. Nearly 44% of car manufacturers use third-party providers for data security and compliance
Autonomous Vehicle Technology: Autonomous vehicle tech is a fast-growing IT spending category. More than 5 million autonomous test vehicles operated globally as of late 2024. High-performance computing clusters required for autonomous driving are deployed in over 950 R&D centers globally. Sensor fusion systems that integrate lidar, radar, and vision data are found in 80% of AV prototypes.

By Application

Automotive: In the automotive domain, over 68% of OEMs and Tier 1 suppliers implemented IT solutions to improve vehicle design, production, and performance monitoring. Digital dashboards, ADAS platforms, and in-car infotainment systems are standard in over 70% of all new vehicle models. The average car now integrates over 150 ECUs, each supported by specialized firmware and diagnostics software
Manufacturing: Manufacturing IT applications have surged, especially in smart factories and flexible assembly lines. In 2024, 37% of automotive plants transitioned to Industry 4.0 platforms, incorporating machine learning and digital twins. The deployment of programmable logic controllers (PLCs) integrated with cloud IT systems rose by 25%, allowing remote management and optimization.
Transportation: Automotive logistics and transportation applications are rapidly digitizing. Over 480,000 connected trucks and delivery vehicles were managed through fleet IT platforms in 2024. Vehicle tracking and route optimization software improved delivery efficiency by 18% year-on-year.
E-commerce: E-commerce supply chains rely heavily on IT-powered transportation. In 2024, more than 125,000 last-mile delivery EVs were managed through integrated IT systems. Cloud-based inventory and dispatch platforms were implemented in 58% of e-commerce warehouses supporting automotive parts.

Regional Outlook for the IT Spending in Automotive Market

The IT spending in the automotive market varies widely across regions, influenced by levels of industrial digitization, infrastructure, and R&D focus. The most advanced regions are North America and Asia-Pacific, followed by Europe and the Middle East & Africa. In 2024, over 62% of global IT automotive deployments were concentrated in just three regions: North America, Europe, and Asia-Pacific.

North America

North America remains a leader in IT spending within the automotive industry. As of 2024, over 52% of automotive companies in the U.S. and Canada had completed digital transformation initiatives. The United States hosts more than 3,000 automotive IT solution providers. Autonomous vehicle testing is most advanced in California and Michigan, with over 140 licensed AV projects running in 2024. Data centers supporting vehicle cloud operations number over 420, with a combined capacity exceeding 3.8 exabytes. Cloud adoption in automotive manufacturing reached 63%, and R&D investment in IT exceeded that of any other global region.

Europe

Europe has made significant strides in standardizing IT systems across automotive plants. Germany, France, and the UK collectively manage over 2,700 smart factories, with over 600 of them fully automated using cloud platforms and ERP systems. In 2024, over 48% of EU auto manufacturers employed AI-powered defect detection systems on assembly lines. Cybersecurity spending in Germany’s automotive sector reached the highest in Europe, with over 19,000 endpoint protection licenses deployed. Connected car penetration in Western Europe hit 71%, while investments in EV IT infrastructure rose by 33%.

Asia-Pacific

Asia-Pacific is the fastest-growing region for IT in the automotive sector. In 2024, China, Japan, South Korea, and India accounted for more than 58% of all automotive IT spending in the region. China alone deployed over 6,500 intelligent vehicle test zones in its major cities. India saw an 81% increase in cloud ERP adoption among Tier 2 automotive suppliers. Japan leads in robotics integration, with 5.3 robots per worker in Toyota’s IT-managed smart factories. South Korea is home to more than 900 automotive R&D facilities, each with advanced IT infrastructure for simulation, testing, and embedded software development.

Middle East & Africa

The Middle East and Africa are emerging markets for automotive IT integration. In 2024, UAE and Saudi Arabia led the regional transformation with smart mobility investments, including over 1,200 EV charging IT stations equipped with predictive maintenance analytics. Africa saw a 19% year-on-year increase in IT deployments for automotive assembly plants, especially in Nigeria, Kenya, and South Africa. Over 80 regional OEMs began implementing cloud-based supply chain management systems.

List of Top IT Spending in Automotive Companies

IBM (USA)
SAP (Germany)
Capgemini (France)
DXC Technology (USA)
Infosys (India)
Bombardier (Canada)
Cisco Systems (USA)
Siemens (Germany)
CGI (Canada)
Altran Technologies (France)

IBM (USA): Deployed over 2,800 AI-powered automotive cloud solutions globally and supported over 250 OEMs in digital factory rollouts by 2024. The company operates nine automotive-specific cloud hubs in North America, Europe, and Asia.

SAP (Germany): SAP systems are installed in over 78% of global automotive OEMs for ERP, CRM, and supply chain operations. SAP's IT platforms manage over 300 million connected vehicle datasets monthly across customer ecosystems.

Investment Analysis and Opportunities

In the IT spending in automotive market, investment trends are increasingly data-centric and platform-driven. In North America, approximately $15 billion was allocated to big data analytics tools in 2024, with over 6,200 telematics data platforms integrated by OEMs and fleet services . Over 480,000 connected commercial vehicles in the U.S. are now linked to predictive maintenance systems, reducing downtime by 18% year over year . General Motors alone committed $4 billion to enhancing U.S. manufacturing—including IT automation—through 2027. Meanwhile, global VC funding for automotive tech startups surged, reaching $7.3 billion in 2024.

Investors are favoring scalable IT infrastructure projects; over 560 smart manufacturing plants were under construction in 2025, each budgeting for IoT sensor networks and cloud-based process control. Asia-Pacific saw 81% growth in cloud ERP deployments among Tier 2 suppliers . In India, IT investments totaled $247 million in 2024, supporting EV infrastructure and vehicle connectivity systems. In Europe, Germany installed 19,000 endpoint protection licenses in automotive firms, indicating strong cybersecurity spending .

New Product Development

Automation and digital-first innovation are accelerating new IT-enabled product introductions. In-vehicle operating systems experienced rapid adoption: Android Automotive OS 14 debuted in May 2023 and is already integrated in Hyundai and Porsche models, supporting Google Maps and Assistant functionality. Over 75% of all new vehicles launched in 2024 included infotainment systems with cloud voice assistant support .

Digital prototyping tools are transforming product lifecycle steps: companies using 3D digital design platforms are building 50% fewer physical prototypes, reducing time to market by 58 days and cutting prototype costs by 48%. Autonomous vehicle manufacturers are enhancing sensor fusion: 80% of AV prototypes now integrate lidar, radar, and vision data, with data pipelines managing 1–2 GB/s per vehicle .

Additive manufacturing is growing in automotive product development, with $24.9 billion of 3D printing ever built into prototyping and spare parts in 2024, and plans to reach $37.2 billion by 2026. Agile methods are scaling up: surveys show 51% of automotive developers expect new AV laws in 2024, with 32% navigating compliance issues.

Development in AI-driven software is also accelerating: a 2023 survey found 62% of product teams say consumer demand is accelerating product development; 65% report faster release cycles. Coupled with data democratization, OEMs and Tier-1 firms are expanding rapid software updates and OTA deployment systems, currently active in 76% of new models ﹘ enabling over-the-air updates across fleets.

Five Recent Developments

Android Automotive OS 14 Integration: Released May 2023, now standard in Hyundai and Porsche vehicles .
GM’s $4 B U.S. IT-Mfg Investment: Announced June 2025, targeting 2M+ annual production via IT automation .
Digital ProtOptimization: Companies using digital prototyping reduced cost by 48% and lead times by 58 days (.
3D Printing Surge: Additive manufacturing market hit $24.9 billion in 2024
Big Data Infrastructure Growth: North American automotive analytics spending peaked over $15 billion in 2023 .

Report Coverage of IT Spending in Automotive Market

The report coverage of IT spending in the automotive market encompasses a detailed and structured analysis of how information technology is transforming the global automotive industry. It includes a comprehensive breakdown of regional performance, analyzing IT adoption and spending patterns across North America, Europe, Asia-Pacific, and the Middle East & Africa. The report also covers market segmentation by type—such as software, hardware, IT services, and autonomous vehicle technologies—and by application areas including manufacturing, transportation, e-commerce, and vehicle connectivity.

It examines the integration of advanced technologies like cloud computing, IoT, AI, cybersecurity, and over-the-air (OTA) software updates, which are reshaping automotive operations and customer experiences. The report highlights key players in the industry, such as IBM and SAP, by detailing their deployment figures and influence on digital transformation. Additionally, it evaluates investment trends, innovation in digital platforms, development of smart factories, and the strategic priorities of OEMs and suppliers. By analyzing these elements, the report provides a full 360-degree view of the current landscape and future outlook for IT investment in the automotive sector, identifying growth opportunities, implementation challenges, and key technological advancements.