Automotive System Simulation Software Market Research Report and Outlook by 2028

The market for automotive system simulation software is anticipated to grow significantly, reaching approximately US$ 2,616.37 million by 2028, up from US$ 1,142.52 million in 2021. This growth represents a compound annual growth rate (CAGR) of 12.6% from 2021 to 2028.

In the Asia Pacific (APAC) region, the automotive sector is thriving, driven by the presence of major industry players such as Geely Auto Group, Honda, Tata, and Toyota. The demand for new vehicles is surging in rapidly developing economies like China and India, as well as in more established markets such as Australia, Japan, and Singapore. The emphasis on strengthening the manufacturing sector in these Asian countries has significantly bolstered the automotive manufacturing landscape. For example, the Indian government introduced The Automotive Mission Plan in August 2021, aiming to enhance the automotive sector's contribution to the national GDP to 12% and generate approximately 50 million new jobs. Furthermore, stringent regulations on internal combustion engine (ICE) vehicles have been implemented to address the pressing issue of air pollution caused by emissions, particularly from passenger vehicles. The region is also promoting the adoption of electric vehicles (EVs), especially in China and Japan. According to ZoZo Go, electric vehicle sales in China soared to 3.3 million units in 2021, a substantial increase from 1.3 million in 2020 and 1.2 million in 2019. These developments are expected to significantly boost the demand for automotive system simulation software, as these tools facilitate faster production of vehicles and their components while ensuring reliability.

The automotive system simulation software market features prominent players such as Ansys, Inc., Hexagon AB, Siemens AG, and dSPACE GmbH, who maintain their competitive edge through various strategies, including the introduction of new products, business expansion, and acquisitions. For instance, in December 2021, dSPACE GmbH partnered with KPIT Technologies and Microsoft Corporation to deliver a unique solution for original equipment manufacturers and Tier-1 companies, facilitating the homologation process for advanced driver assistance systems.

IMPACT OF COVID-19 PANDEMIC ON AUTOMOTIVE SYSTEM SIMULATION SOFTWARE MARKET

The global automotive sector faced a severe impact due to the COVID-19 pandemic, which began in China, resulting in a staggering 71% drop in sales in February 2020. By April of that year, sales in the United States and Europe had also fallen dramatically, by 47% and 80%, respectively. Consequently, the demand for automotive system simulation software saw a decline as major automotive manufacturers struggled. However, from the third quarter of 2020 to the second quarter of 2021, the supply chain began to recover, leading to a gradual increase in production levels among automakers. This crisis has also expedited the digitization of the mobility value chain, prompting rapid transformations within the industry. Although pandemic-related restrictions caused temporary halts in production lines, non-manufacturing activities continued as employees adapted to remote work. The utilization of automotive system simulation software proved essential for automakers during this period, as it allowed product development processes to persist even with limited or no access to physical laboratories.