GCC Vehicle-to-Vehicle (V2V) Communication Market Research Report: Forecast (2023-2028)

Market Definition

Vehicle-to-vehicle communication is a network that enables automobiles to wirelessly exchange information with each other about their speed, location, route, safety warnings, traffic information, etc. This innovation is crucial for enhancing road safety by providing incident alerts before a driver discovers them. This technology gives persistent 360-degree surveillance of potential hazards, improving efficiency and security.

Market Insights & Analysis: GCC Vehicle-to-Vehicle (V2V) Communication Market (2023-28)

The GCC Vehicle-to-Vehicle (V2V) Communication market is projected to grow at a CAGR of around 3.58% during the forecast period, i.e., 2023-28. The growth is attributed to the rising focus of the GCC nations to adopt digitalized & advanced cellular-based technologies in various industrial verticals, including automotive. Regional countries such as the UAE & Saudi Arabia are expected to register higher growth rates & hold a significant market share due to the growing uptake of the national governments & automotive manufacturers to boost the production activities of autonomous vehicles & boost their deployment in the national transportation services.

Moreover, continuous improvements & investments in upgrading the network technology from 3G & 4G to high-speed 5G connection by the government of Saudi Arabia & the UAE to enhance the penetration of digitalized services & adopt advanced mobility solutions is presumed to continue to support the integration of this communication technology in the automobiles in both the countries.

On the other hand, the absence of supportive government policies due to a lack of awareness & a shortage of potential automotive manufacturers in GCC nations such as Kuwait, Qatar, Bahrain, and Oman is expected to contribute to a marginal or negligible share of these countries in the market in the region. Additionally, the marginal demand for this communication technology from these countries is expected to be witnessed from the aftersales segment dominantly.

Further, the region is witnessing a rise in automotive manufacturing activities by companies such as Saudi National Automotive Manufacturing Company (SNAM), Falak Motors, etc., who are largely focused on electric & autonomous vehicle manufacturing activities. Thus, this is predicted to propel the demand for this communication technology from OEMs, hence aiding in enhancing the GCC Vehicle-to-Vehicle (V2V) Communication Market size in the upcoming years.

Market Dynamics

Key Driver: Increasing Initiatives of the Government to Minimize Road Accidents

GCC governments are encouraging the use of vehicle-to-vehicle communication technologies to improve road safety, reduce traffic congestion, and enhance the overall efficiency of transportation systems. This is because V2V communication permits vehicles to interact with each other in real-time, which can provide drivers with warning of potential accidents or hazards on the road & aids in minimizing the number of mishaps & fatalities on the roadways.

The region is experiencing rapid urbanization, which is leading to increased traffic congestion & accidents. This technology can help to reduce these mishappenings by providing real-time traffic updates & rerouting suggestions. Additionally, the environmental benefits associated with this technology which include reducing the time that vehicles spend on the road & improving the efficiency of the transportation system, are further encouraging the government to promote the deployment of this communication technology in vehicles across the region.

Thus, with the growing awareness about road safety in the region, there is a greater focus on adopting technologies such as vehicle-to-vehicle communication, which would continue to propel the market growth during 2023-2028.

Possible Restraint: Potential Threat of Cyberattacks to Restrict the Growth

With the surging integration of various software in autonomous & electric vehicles, the threat of cybersecurity breaches has widely increased, thereby leading to slower adoption of vehicle-to-vehicle communication. The technological systems employ a wide range of software & networking options, including sensors & information technology-based solutions, to generate statistics related to traffic & accidents, etc., to be used by the drivers for efficient & low-risk transportation.

As a result of the likelihood of this software being hacked, as all vehicle-related data is stored in cloud-based services, there has been a surge in data breaches, raising security worries among car makers and individuals preferring to use autonomous services. This has made it difficult for suppliers of this communication technology services to maintain a level of security to promote efficient & effective transportation while also engaging in R&D operations to introduce new technology, thus negatively impacting the market growth.

Growth Opportunity: Rising Production Activities of Automated & Electric Vehicles in the Region

The rising manufacturing of autonomous vehicles in the GCC region is predicted to have a substantial impact on communication technology demand. This is because autonomous vehicles rely heavily on V2V communication to operate safely & efficiently by detecting critical & dangerous situations early on & getting the essential safety-related information in a fraction of a second. As the manufacturing of self-driving vehicles and their deployment on the road is projected to grow, so would demand. For instance,

• In 2022, Lucid Motors announced the signing of an agreement with the Saudi government to build an electric vehicle manufacturing facility in the country with a capacity of 155,000 vehicles per year. The manufacturer is expected to embrace the technology, which would be integrated into the vehicles, as the company concentrates on launching sophisticated electric automobiles.

Thus, the rise in the production of autonomous vehicles in the GCC is likely to drive the market as these vehicles increasingly rely on this technology to operate safely & efficiently.

Key Trend: Surging Adoption of Connected Cars to Shape the Market

The adoption of connected cars by the government of GCC nations, such as the UAE & Saudi Arabia, is driving the demand for V2V communication in the GCC region as it allows for enhanced road safety, improved traffic management, and reduced congestion. For instance:

• In 2021, the government of the United Arab Emirates announced the deployment of over 4,000 self-driving vehicles by 2030, which would be manufactured by Cruise, as part of the agreement signed between Dubai's Roads and Transport Authority & Cruise.

Furthermore, the development of 5G networks in the GCC region is driving the adoption of connected cars & this technology, as 5G networks provide faster & more reliable connectivity, enabling seamless communication between vehicles & the surrounding infrastructure, and allowing the development of new applications & services.

As a result of the rising demand for connected vehicles, companies such as General Motors, BMW, Audi, Mercedes-Benz, etc., have announced to launch of connected vehicles in the upcoming years. Thus, the growing focus of the government in introducing the use of connected cars for environmental & social benefits is the key factor that would lead to increased growth of the market in the upcoming years.

Market Segmentation

Based on the Connectivity Type:

• Dedicated Short-Range Communication (DSRC)
• Cellular-based

Here, Dedicated Short Range Communication (DSRC) captured a larger share in the GCC Vehicle-to-Vehicle (V2V) Communication market historically & the same trend is anticipated to continue in the upcoming years as well. The ease of implementation & communication verified data security standards & higher safety offered by the dedicated short-range communication is a key factor augmenting their use of this technology. Additionally, the ability of the DSRC to effectively communicate with other vehicles within short- to medium-range, without much interference, makes DSRC a suitable connectivity type to be deployed in autonomous & advanced vehicles.

Automotive manufacturers such as Volkswagen, General Motors, and Toyota, etc., are progressively adopting DSRC-based technology in their newly launched automobiles & are focussing to launch them in regional countries such as the UAE & Saudi Arabia. This is due to the growing propensity of national governments to deploy self-driving vehicles in their transportation systems. On the other hand, usage of cellular connectivity for safety-related applications experiences many challenges, as the LTE networks cannot handle too much data when some V2V applications produce continuous traffic among vehicles.

As a result, cellular networks do not provide high data bandwidth at a low latency across all coverage areas, leading to their negligible adoption by automotive manufacturers. Further, as the economy of Saudi Arabia & the UAE is witnessing investments in advanced vehicle production activities, the demand for DSRC-based connectivity is expected to continue to rise in the forthcoming years.

Based on the Vehicle Type:

• Passenger Cars
• Commercial Vehicles

Commercial Vehicles are likely to witness higher demand for V2V communication compared to passenger vehicles. This is because commercial vehicles, such as trucks & buses, often travel long distances on highways & frequently encounter various safety & traffic-related issues, such as congestion, accidents, and road closures. This communication technology can help commercial vehicles communicate with each other, as well as with surrounding infrastructure to avoid such issues & improve safety & efficiency. There are currently no such investments or deployments of this communication technology in commercial vehicles in the region.

However, various initiatives & pilot projects are already ongoing in the region to investigate the potential benefits of this communication technology for commercial vehicles. Similarly, the King Abdullah University of Science and Technology (KAUST) in Saudi Arabia is developing this communication technology for trucks. Thus, the increased attempts by GCC governments to implement V2V in commercial vehicles are projected to boost their market share in forthcoming years.

Regional Projection

Geographically, the market expands across:

• The UAE
• Saudi Arabia
• Qatar
• Kuwait
• Bahrain
• Oman

Off all the countries across the GCC region, Saudi Arabia is anticipated to hold a substantial share in the GCC Vehicle-to-Vehicle (V2V) Communication market during the forecast period. The issuance of supportive government policies, including the development of 5G infrastructure & increasing the use of spectrum-related technologies in automotive & related industries, are the key factors anticipated to support the revenue growth of the market in Saudi Arabia. The country's government is also aiming to potentially add over USD133.25 million to the country’s GDP by promoting the use of spectrum technology in automotive & corresponding industries, representing around 3% of the GDP by 2025, to boost their non-oil economic growth.

Moreover, Saudi Arabia is a high disposable income economy & enjoys significant revenue from the sales of automobiles. According to the US-Saudi Business Council, Saudi Arabia is the largest automotive market in GCC & represents over 50% of the market share. Thus, with the rising launch of autonomous vehicles & booming manufacturing of electric & autonomous cars in the country, it is anticipated that the demand for this technology from both OEMs & aftermarkets is expected to flourish in the forecast years.

Regulatory Landscape in the GCC Vehicle-to-Vehicle (V2V) Communication Market

• In 2020, Saudi Arabia Communications and Information Technology Commissions (CITC) issued a National Spectrum Strategy 2020-2025 (NSS) to unlock the potential of radio communication in Saudi Arabia for a smarter & safer future. This is a holistic vision that outlines the potential of radio spectrum, to transform Saudi Arabia into a digital society by enabling the use of smart communication in automotive & other industrial sectors.

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