South Korea Connected Cars Market Overview, 2029

Connected cars refer to vehicles equipped with internet connectivity and integrated with various sensors and software, enabling communication with other devices, networks, and infrastructure. South Korea, known for its technological innovation and high smartphone penetration, presents a conducive environment for the growth of the connected car market. The seeds of South Korea's connected car market were sown in the early 2000s with the introduction of basic telematics services like emergency assistance and GPS navigation. However, significant growth began in the late 2010s with the rollout of 4G networks and the launch of advanced platforms like Hyundai's Bluelink. Government initiatives and consumer demand for safety and convenience further fueled the market. Today, South Korea boasts one of the highest penetration rates of connected cars globally, with nearly half of all new vehicles sold being connected. The South Korean connected car market is witnessing a significant shift towards 5G technology, facilitating faster data transfer and lower latency, thereby unlocking a plethora of new features and applications for connected vehicles. Concurrently, there's a notable emphasis on in-car services, with a surge in demand for subscription-based offerings like infotainment, remote diagnostics, and safety features. Moreover, the growing popularity of electric vehicles (EVs) is driving the need for connected charging solutions and advanced battery management features. Furthermore, consumers are increasingly inclined towards personalized connected car experiences, seeking tailor-made solutions that align with their individual preferences and driving habits.

According to the research report "South Korea Connected Cars Market Overview, 2029," published by Bonafide Research, the South Korean connected cars market is expected to grow with more than 17% CAGR from 2024 to 2029. The South Korean connected car market is propelled by technological advancements in 5G, V2X communication, and autonomous driving. Government support through subsidies, infrastructure investments, and regulatory frameworks also drives growth. Increasing consumer awareness of benefits like safety and convenience fuels adoption. Additionally, there's a focus on sustainability to reduce traffic congestion and emissions. Challenges include the high initial cost of technology, cybersecurity concerns, lack of standardization, and ethical considerations regarding data privacy.

Technologically, 4G/LTE presently dominates the landscape, facilitating basic connectivity functionalities such as infotainment, navigation, and safety features, although its dominance is anticipated to wane as the adoption of 5G technology accelerates. Meanwhile, the gradual phase-out of 3G is underway due to its limited capabilities and network upgrades. Conversely, the 5G segment is rapidly gaining traction, offering high bandwidth and low latency crucial for advanced applications like autonomous driving and real-time traffic management.

In terms of connectivity solutions, three main categories emerge: integrated, embedded, and tethered. Integrated solutions, pre-installed by car manufacturers, are favored among premium car segments for their seamless connectivity and advanced features. Embedded solutions, installed aftermarket with compatible hardware and software, offer flexibility and affordability, catering to older vehicles or budget-conscious consumers. Tethered connectivity, which relies on smartphones, provides basic features but with limited functionality compared to integrated or embedded solutions.

Further segmentation by application reveals several key areas driving market growth. Driver assistance leads the pack, propelled by safety concerns and government regulations, encompassing features like lane departure warning, blind spot monitoring, and automatic emergency braking. Safety features, including emergency calls, accident alerts, and stolen vehicle tracking, are also on the rise. Infotainment remains a popular segment, delivering navigation, music streaming, and hands-free calling, with anticipated growth driven by increasing demand for personalized entertainment experiences. Telematics offer valuable insights into vehicle health and performance, particularly for fleet management and insurance companies, while fleet management streamlines operations with vehicle tracking, fuel efficiency monitoring, and driver behavior analysis. Mobility management facilitates car-sharing, ride-hailing, and other mobility services through connected car technology. Additionally, emerging applications such as vehicle tracking for security purposes, parking assistants, and in-car air quality monitoring contribute to the market's diversity. Finally, the market is divided into two primary end markets: Original Equipment Manufacturers (OEMs) lead with integrated solutions embedded in new vehicles, while the aftermarket sector is rapidly expanding, offering embedded and tethered solutions for older vehicles, appealing to consumers seeking affordability and flexibility.



In South Korea, policies and regulations for the connected car market prioritize innovation, safety, and data privacy. The Intelligent Car Initiative, initiated in 2016, offers financial aid and infrastructure support. Legislation like the Telecommunications Business Act ensures data security, while the Road Traffic Act mandates safety features. The Personal Information Protection Act governs data handling in connected car systems. Compliance is ensured through certifications like the Korean Certification Scheme (KCS) and UNECE Regulation 156 for cybersecurity. Voluntary certifications such as K-Auto ITS and ISO 26262 address national ITS standards and functional safety.

The South Korean connected car market is poised for robust growth in the coming years, driven by technology advancements, government support, and evolving consumer preferences. The focus on 5G connectivity, in-car services, cybersecurity, and aftermarket solutions will further shape the market landscape. The success of the market will hinge on addressing challenges like cost, security, and standardization to ensure inclusivity and sustainable growth.