Japan Connected Car Market Expected to Reach USD 32.1 Billion by 2033 - IMARC Group

Japan Connected Car Market Statistics, Outlook and Regional Analysis 2025-2033

The Japan connected car market size was valued at USD 6.1 Billion in 2024, and it is expected to reach USD 32.1 Billion by 2033, exhibiting a growth rate (CAGR) of 20.4% from 2025 to 2033.

The Japan connected car market is experiencing substantial growth due to several key trends and drivers, largely influenced by advancements in communication technologies and the rising adoption of AI and IoT in the automotive sector. One of the primary drivers is the increasing demand for enhanced vehicle safety and real-time traffic management systems. The adoption of cellular V2X technology is one of the most significant trends driving this transformation. For instance, in December 2024, Honda and SoftBank Corp. conducted tests of cellular V2X technology on the Shin-Tomei Expressway in Tokyo, Japan, using 4G LTE and 5G. This system integrated data from connected and non-connected vehicles to predict potential traffic risks, enhancing real-time safety for both drivers and pedestrians. As vehicle connectivity evolves, it allows for seamless communication between vehicles and infrastructure, improving overall safety and traffic management.

Another major trend in Japan's connected car sector is the growing collaboration between technology companies and governmental organizations to enhance road infrastructure and autonomous vehicle capabilities. For example, in January 2025, Nexar, in partnership with Japan Post, implemented a solution to improve road conditions across the country by using dashcams to monitor highway construction and damage. This collaboration not only supports the development of safer road networks but also facilitates the creation of AI-driven maps, which are crucial for autonomous vehicles. These advancements are accompanied by a growing shift towards AI-powered systems that enhance vehicle safety, performance, and user experience. The Japanese government's strong push for innovation in autonomous vehicle technology, with plans for the widespread deployment of linked cars, is another factor propelling the market's expansion. Furthermore, the need for safer and more dependable transportation options is fueled by Japan's aging population, which is why connected and autonomous vehicles are a key concern for both customers and the government. The connected car industry in the country is expected to grow significantly over the next several years as automakers continue to innovate and work with tech companies, thereby establishing Japan as a leader in the creation of leading-edge automotive technologies.

Japan Connected Car Market Statistics, By Region

The market research report has also provided a comprehensive analysis of all the major regional markets, which include Kanto region, Kansai/Kinki region, Central/ Chubu region, Kyushu-Okinawa region, Tohoku region, Chugoku region, Hokkaido region, and Shikoku region. Japan’s market is growing due to strong government backing, tech advancements, EV integration, green solutions, expanded multi-modal networks, and autonomous vehicle adoption.

Kanto Region Connected Car Market Trends:

The Kanto Region, which includes major cities like Tokyo, has seen significant growth in the connected car market. Innovations such as advanced driver-assistance systems (ADAS) and seamless smartphone integration are becoming more common. For example, in October 2024, Suzuki launched the Fronx compact SUV in Japan, offering cutting-edge connectivity features like electric parking brakes and wireless charging. These technological advancements align with the region's growing demand for smarter and safer vehicles, further bolstering Japan's position in the connected car market.

Kansai/Kinki Region Connected Car Market Trends:

The Kansai/Kinki region, including Osaka and Kyoto, shows strong integration of connected vehicles with smart cities. Osaka is driving innovations in V2X communication and autonomous vehicle systems, with automotive giants like Honda pushing forward EV integration. The city also supports research into smart infrastructures. Autonomous electric cars are tested on tourist routes in Kyoto. Concurrently, the region is a center for connected car innovations due to its long history in the automobile industry and the cooperation between the manufacturing and technology sectors.

Central/Chubu Region Connected Car Market Trends:

The Central/Chubu region, with cities like Nagoya, is seeing rapid growth in connected car technology driven by major manufacturers such as Toyota. Nagoya focuses on connected vehicle ecosystems that integrate smart city infrastructure, vehicle data, and renewable energy. Toyota’s collaboration with regional tech companies is promoting advancements in V2X technology. In Aichi Prefecture, Toyota is deploying connected services in its vehicles, offering improved navigation, real-time diagnostics, and safety features, helping solidify the region’s position in Japan's connected car revolution.

Kyushu-Okinawa Region Connected Car Market Trends:

In Kyushu-Okinawa, particularly in Fukuoka, connected car technology is expanding, driven by both local automotive companies and tech startups. With a growing focus on environmental sustainability, Kyushu is integrating electric and autonomous vehicles into its public transport systems. Okinawa is testing connected car solutions to enhance tourist experiences, such as self-driving cars for scenic routes. Regional authorities are also pushing for the development of eco-friendly and connected vehicles, addressing both mobility and environmental concerns in smart city planning.

Tohoku Region Connected Car Market Trends:

In the Tohoku region, including Sendai, the market is closely linked with disaster recovery and resilience. Connected vehicles are being integrated into the region’s infrastructure to provide real-time data during natural disasters like earthquakes and tsunamis. Car manufacturers, including Subaru, are testing systems to enhance vehicle communication during emergencies. Additionally, Tohoku's unique rural landscape sees applications of connected cars in remote areas, offering autonomous driving and telematics to improve access and safety in areas with lower population densities.

Chugoku Region Connected Car Market Trends:

The Chugoku region, which includes Hiroshima, is becoming more focused on developing connected automobile technology with a particular focus on electric cars and cutting-edge safety features. Also, Mazda, with its headquarters located in Hiroshima, is incorporating connected car capabilities, including AI-enhanced navigation and automated driving, into its EV lineup. Moreover, the area is also testing V2X infrastructure to improve traffic flow and lower accident rates. While linked cars are expected to be essential to enhancing regional mobility and environmental sustainability, local governments are investing in infrastructure for EV charging stations.

Hokkaido Region Connected Car Market Trends:

Hokkaido, with its vast rural areas and harsh winters, is utilizing connected car technologies to address unique environmental challenges. In Sapporo, companies are exploring telematics and remote diagnostics to optimize vehicle performance in severe weather. Connected vehicles in Hokkaido are also being tested for snow and ice road navigation, enhancing driver safety in winter conditions. Furthermore, the region is focusing on integrating smart transportation networks to improve logistics and accessibility in its mountainous and often remote areas, improving both efficiency and safety.

Shikoku Region Connected Car Market Trends:

Shikoku is advancing the connected car segment with places like Matsuyama by emphasizing self-driving cars for public transportation. The region is testing driverless buses and shuttles in rural locations to solve mobility issues in its low-density areas. Moreover, Shikoku is also utilizing linked automobile technologies, which include self-driving cars and real-time information to promote tourism. Besides this, the incorporation of renewable energy into connected automobile networks is also a top goal with several regional projects aiming at improving the efficiency and sustainability of transportation, especially in eco-tourist zones.

Top Companies Leading in the Japan Connected Car Industry

The connected car market in Japan is expanding significantly, with Toyota, Suzuki, and Daihatsu leading the way. According to the Toyota January 2025 research report, Toyota plans to integrate its electrification technology with Suzuki and Daihatsu's last-mile logistics know-how in Tokyo's delivery industry to launch mini-commercial van BEVs by fiscal 2025. Besides this, a clear picture of the industry's future is provided by the report's thorough examination of the competitive landscape, which includes market structure, positioning of key players, leading strategies, and in-depth company profiles.

Japan Connected Car Market Segmentation Coverage

• On the basis of the technology, the market has been bifurcated into 3G, 4G/LTE, and 5G. These technologies enable seamless communication between vehicles and infrastructure, enhancing real-time data transmission, improving navigation and safety features, and supporting advanced automation for a smarter driving experience across various networks.
• Based on the connectivity solutions, the market is categorized into integrated, embedded, and tethered. Integrated systems offer full connectivity. Apart from this, embedded solutions provide deep vehicle integration, and tethered devices ensure reliable, temporary connections, all enhancing real-time data exchange, diagnostics, and control for an advanced automotive experience without interruption.
• On the basis of the service, the market has been divided into driver assistance, safety, entertainment, vehicle management, mobility management, and others. These services provide real-time support, monitoring, and entertainment, offering a cohesive, efficient user experience by integrating various functionalities, increasing vehicle performance, convenience, and driver satisfaction.
• Based on the end market, the market is categorized into original equipment manufacturer (OEMs) and aftermarket. Original equipment manufacturers (OEMs) develop advanced automotive technologies and hardware. At the same time, aftermarket solutions allow customization and enhancements, providing drivers with the flexibility to upgrade and personalize vehicle features, ensuring diverse connectivity and performance options.

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