According to a new market publication by Transparency Market Research (TMR), the global smart transportation market is considerably fragmented. Despite being a nascent one, the smart transportation market witnesses the presence of several large players. Some top players having significant presence in this market are Cisco Systems, Siemens AG, GE Transportation, Alstom AG, and Cubic Corporations. These players are striving to design newer systems that are accordance with pollution control norms. To attain this, top companies in the smart transportation market are working closely with government bodies for environment protection regulations.
As per the TMR report, the global smart transportation market is likely to rise at a stellar 18.50% CAGR between 2015 and 2021. Rising at this rate, the market which was valued at US$45.10 bn in 2014 will become US$176.5 bn by the end of 2021.
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Among the key segments based on solutions, traffic management system is likely to rake in the lion’s share of the market over the forecast period. Geography-wise, Europe leads the pack due to higher adoption of smart transportation processes in most urban areas.
Efforts for Sustainable Traffic Congestion Solution boosts Adoption
The worldwide smart transportation market is expected to display stellar growth in the coming years. Firstly, nations across the world are grappling with traffic congestion issues and are seeking sustainable solutions. Huge hours of traffic congestion in urban areas is leading to spike in air pollution, waste of fuel, and reduced manpower productivity. Traffic congestion in urban areas, especially emerging economies, is often related to poor traffic management, soaring number of vehicles, insufficient infrastructure, and poor road conditions.
Smart transportation systems have emerged to be a sustainable solution to serve traffic management issues. These include traffic update, ticketing, driver and pedestrian safety, parking, and overall integrated supervision.
Besides this, modernization of the transportation and logistics sector in developing countries is likely to positively impact the smart transportation market. These countries are following suit gathering from the success of smart transportation systems in developed countries. For example, the government in the U.K. adopted smart transportation system for improved driver safety, and improved logistics. The new-age urban development pursuits and planning of smart cities are also stoking the demand for smart transportation system.
Lack of Reliable Communication Network limits adoption in Emerging Economies
On the downside, high installation cost and requirement of skilled personnel to handle the system are key factors limiting the adoption of smart transportation systems. Besides this, the requirement of a reliable communication network have been a reason for higher adoption in developed countries thus far.
Factors such as poor road conditions and lack of large databases are also limiting the adoption of smart transportation systems in developing economies.
Nevertheless, mega infrastructure development projects undertaken by governments in emerging economies is likely to open growth opportunities for the smart transportation market.