There were 237 million connected cars in operation as of 2021. This figure is expected to go up to 400 million by 2025. Despite the pandemic-induced supply chain disruptions, the global connected car market stayed resilient, with 90% of 2021’s connected cars on cargo being 4G vehicles. As a result, the global IoT automotive market size is projected to rise to approximately $191 billion by 2028 from $59.70 billion in 2021. As Neil Shah (Partner & Research Director, Internet of things (IoT), Mobile & Ecosystems, Counterpoint Research) predicts that four in every five cars will be 5G-enabled by 2025, at “Connected & Autonomous Vehicle Summit, 2021,” the world’s first 5G-enabled car, BMW iX, is all set to debut into the market this year (2022). What’s so special about this? This launch will amplify the importance of connected vehicles, and why they are inevitably going to become the new norm.

What is a connected car?

Put simply, a connected car is a vehicle outfitted with an internet connection through WLAN (Wireless Local Area Network). Connected car IoT integrates hardware and software components such as sensors, smart applications, and cloud storage. It implements this coordinated system for predictive maintenance, fleet management, better interoperability, and car and device connection. 

Read More: What is IoT and how does it work?

IoT for automotive industry: a wealth of data

IoT automation has been making headlines for quite some time now – and that comes without a surprise. The idea of connected cars truly does sound futuristic; the connected car transmits and receives information making the driving experience safer, smarter, and easier. Here are a few ways in which the IoT automotive industry transforms lives and businesses. 

Early warning system

  • Connected car IoT enhances vehicle-to-vehicle communication to ensure safety by detecting the possibility of accidents. 
  • IoT Automotives have embedded sensors that detect obstacles like potholes or sharp turns to avoid unforeseen dangers. 
  • A case study by ResearchGate revealed that 10 minutes reduction in medical response time could reduce the death rate by one-third. While an automatic accident detection and communication system alerts nearby police stations and medical support, GPS sends the accurate location to save lives in the golden hours.

Accurate real-time information

  • Real-time traffic helps you take fewer busy routes. In addition, the weather forecast enables you to limit the speed according to road conditions, traffic density, etc. 

IoT for automotive

  • Automotive manufacturers often release new models without a prior estimate of their market performance. This happens due to a lack of customer data. Although companies release their vehicles with prior testing, there is a dearth of an appropriate mechanism to gauge their long-term performance beforehand. 

A connected car consists of sensors that assess different performance parameters of the vehicle. It helps the manufacturers work upon the gaps and design safer, simpler, and more efficient models. 

How is IoT revolutionizing different aspects of the automotive landscape?

Besides altering the operationality of the vehicles, IoT is poised to revolutionize the automotive landscape by revamping the backend production processes. Of course, it impacts manufacturing procedures, but it reorients the way insurance companies, OEM manufacturers, and logistic providers operate. 

Automotive manufacturers

IoT can help set up a connected manufacturing unit with streamlined production, increased efficiency, improved safety, and reduced costs. But, how do you achieve that? Here are a few ways in which IoT for automotive can transform manufacturing processes:

  • Smart inventory management

Inventory management is a manual process. Someone usually keeps a check on inventory in the warehouse and procures more whenever the supply runs low. 

IoT automates data collection and analysis. It keeps the inventory managers updated about the supply's availability. This means you don’t have to stop the production line due to inventory unavailability issues. You will always have correct supplies on hand, increasing efficiency and reducing unnecessary downtime. 

  • Automated assembly lines

Automated assembly lines are already a common practice in most manufacturing units. Yet, there is still some scope for improvement. 

Automated assembly lines detect defective or missing parts in real-time. It allows immediate corrective measures without further delays. As a result, it reduces waste, increases productivity, and improves resource optimization. 

  • Monitoring machinery for maintenance 

Factory machinery typically requires regular monitoring and maintenance. But, this is often done manually at irregular intervals. Therefore, it could lead to unnecessary lapses. With IoT technology, you could deploy sensors to continuously monitor machinery and its condition to avoid unnecessary or unexpected downtimes.   

Insurance companies

Over 57% of 23 crores registered vehicles were uninsured in India as of 2021. High premiums are one of the reasons behind lower auto insurance coverage rates. Over 40% of drivers opined that insurance companies should lower premium rates according to driver's performance. It increases insurance coverage rates and benefits insurance companies with an increased number of insurers flooding their companies.

A connected car IoT collects information regarding the driver's efficiency, performance, and driving patterns. This information can be used to avail of targeted insurance coverage plans. For example, PAYD (Pay-as-you-drive) and PHYD (Pay-how-you drive) are two new concepts pioneering targeted insurance services. 

While PAYD is an economical option for those who don’t drive often, PHYD offers targeted and optimized premium rates based on your driving skills. This kind of targeted insurance benefits both the stakes holders: -

  • For insurers
    • It enables you to innovate new products, services, and packages for your clients. 
    • Risk-based targeting lowers losses and maximizes profits. 
  • For customers
    • Lower premiums
    • Better monitoring to manage risk

Logistics service providers

Logistics is one of the challenging stages of IoT for automotive. The promptness and efficiency of the supply chain determine the timeliness of the entire production. IoT enables digitalization and automation of logistics information for streamlined and improved supply chain efficiency. It transforms logistics service providers, in particular, in the following ways.

  • The IoT automotive supply chain is a complex sector with multiple suppliers, logistic partners, and OEMs. GPS enables real-time tracking of the shipment. In addition, it helps them become more responsive whenever an issue arises. 
  • Telematics-powered vehicles monitor and track shipment activity like speed, fuel consumption, and directions. As a result, it helps service providers reduce overhead costs and give customers accurate ETA (expected arrival time). 

OEM manufacturers

Enhanced connectivity inside the vehicle will make the drivers feel more in control of their car. 

  • For example, tire pressure sensors detect the vehicle tire’s condition and alert the driver before any issue arises. 
  • Interconnectivity between parts ensures a smooth and safe riding experience. 


Parallel to other industries, IoT for automotive has experienced a paradigm shift in recent years. The software and hardware interconnectivity, both within the vehicle and outside, has catalyzed many changes in the field. 

In addition to automakers, IoT in the automotive industry has revolutionized the way logistics, OEM manufacturers, and the auto-insurance sector operates. Therefore, increased and innovative integration of IoT in vehicles will provide further impetus to the IoT automotive sector.  

Tata Communications has built a connected vehicles platform, MOVE intelligent connected vehicle platform, to provide comprehensive connectivity solutions for a superior commute experience beyond just driving. This Connected Vehicle Platform offers a standard solution across commercial, electric, and passenger vehicles in an industry-first move. 

Tata MOVE CVP facilitates hassle-free local connectivity by partnering with 640+ global MNOs. It offers an intelligent connectivity solution by automatically diagnosing and resolving the connectivity issues. In addition, Tata MOVE CVP suggests an optimum window for SOTA updates to improve its efficiency by eliminating the need to visit local dealers. 

Advance towards a connected, smart future, with a unified interface and real-time intelligence. Choose Tata Communications and take full advantage of cutting-edge technology.  

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