Smart Transportation Market: The Role of AI in Travel Efficiency

The global smart transportation market was valued at USD 110.53 billion in 2022 and is projected to reach USD 285.12 billion by 2030, growing at a CAGR of 13.0% from 2023 to 2030. The growth of the market is primarily driven by advancements in urban projects, government initiatives aimed at reducing greenhouse gas emissions, and the increasing demand for technology integration in traffic management systems.

A significant range of challenges, such as poor-quality public transportation, inadequate capacity for managing public transport, road safety concerns, and parking issues, are affecting cities worldwide. These issues have highlighted the need for more efficient and safer transportation systems, which is driving the demand for smart transportation solutions. Additionally, factors such as urbanization, greater acceptance of IoT-based technologies, and the expansion of 5G connectivity are making smart transportation infrastructure more feasible and easier to implement.

From 2018 to 2019, there was a considerable surge in the application of advanced technologies in vehicles and transportation infrastructure to improve traffic management, reduce maintenance costs, and make better use of transportation networks. Moreover, the introduction of autonomous vehicles, the growth of Mobility as a Service (MaaS), the decline in vehicle ownership, and the increasing investment in smart city initiatives will likely provide significant opportunities for growth in the smart transportation sector.

For example, in September 2022, Indra Sistemas S.A. announced a collaboration with Masmovil Group to create an advanced ecosystem for 5G smart transportation solutions, enabling the development of innovative solutions for smarter, more connected, and sustainable mobility.

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Key Market Trends & Insights

• North America’s Market Leadership: North America accounted for over 33% of the global smart transportation market revenue in 2022. The region is the largest adopter of smart transportation solutions due to the significant emphasis placed on improving transportation infrastructure, particularly in response to issues like congested highways, poor air quality, and rising highway accidents. The presence of major ICT companies in the U.S. that provide smart transportation solutions has further bolstered the region’s dominance.
• Traffic Management Solutions Lead the Market: The traffic management segment accounted for over 32% of the market share in 2022 and is expected to remain the largest segment throughout the forecast period. Key solutions within this segment include integrated monitoring systems, intelligent parking solutions, transportation planning systems, and ticketing management systems. Traffic management remains the most widely adopted smart transportation solution.
• Cloud Services Segment Dominates by Service Type: The cloud services segment held the largest market share of 42.4% in 2022. This segment is expected to maintain its dominance due to its ability to handle the vast amounts of data generated by mobile devices, sensors, and IoT systems used in smart transportation. Cloud platforms provide critical capabilities like data storage and processing power, which are essential for traffic forecasting and overall traffic management. The rise of big data analytics, machine learning, IoT, and cybersecurity will also significantly influence the growth of this segment.

Market Size & Forecast

• 2022 Market Size: USD 110.53 Billion
• 2030 Projected Market Size: USD 285.12 Billion
• CAGR (2023-2030): 13.0%
• North America: Largest market in 2022

Key Companies & Market Share Insights

The smart transportation market is highly competitive, with several established players dominating the sector. These companies cater to a variety of smart transportation segments and are working on expanding their market positions through strategic initiatives, including collaborations and partnerships. However, the continuous development of differentiated solutions and services is expected to create opportunities for new entrants.

Key players are focusing on innovative solutions to meet the growing demand from consumers and end-users. For example, in October 2022, Iteris, Inc. announced that it had received approval from the City of Anaheim to implement its newly unveiled set of managed services as part of an ongoing smart mobility, security, and sustainability initiative. The use of Iteris' cloud-enabled managed services in managing transportation operations is expected to reduce traffic congestion, enhance safety, and create a more sustainable transportation infrastructure.

Key Players

• Accenture PLC
• Alstom, SA
• Cisco System, Inc.
• Cubic Corporation
• General Electric Company (GE)
• Indra Sistema S.A.
• International Business Machines Corporation
• Kapsch
• LG CNS Corporation
• Xerox Holdings Corporation

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Conclusion

The smart transportation market is poised for significant growth, with a projected expansion from USD 110.53 billion in 2022 to USD 285.12 billion by 2030. Driven by the increasing demand for smart urban infrastructure, government initiatives focused on reducing emissions, and the integration of advanced technologies in transportation systems, the market is set to benefit from multiple growth drivers.

North America is expected to maintain its position as the largest market for smart transportation, while Asia Pacific is anticipated to experience rapid growth due to expanding urbanization and government investments in infrastructure. The traffic management and cloud services segments will continue to be the primary areas of focus for market players, offering lucrative opportunities as cities around the world continue to implement smarter and more efficient transportation solutions.

As the market evolves, the growing need for technology-driven solutions, including autonomous vehicles, MaaS, and 5G-connected transportation systems, will provide further opportunities for innovation and growth.