Japan Automotive Cybersecurity Market, By Offering, By Form, By Security, By Vehicle Type, By Application,, By Region - Market Size, Industry Dynamics, Opportunity Analysis and Forecast for 2024-2032

Japan Automotive Cybersecurity Market Forecast till 2032: Set to Reach US$ 1.23 Billion by 2032 with a CAGR of 15.08%

Japan's automotive cybersecurity market is rapidly evolving, driven by the increasing digitization and connectivity of vehicles. As one of the world's leading automotive manufacturers, Japan is at the forefront of integrating advanced technologies such as autonomous driving, connected vehicles, and electric vehicles (EVs). These innovations have significantly enhanced the functionality and user experience of modern vehicles. However, they have also introduced new vulnerabilities to cyber threats, making cybersecurity a critical concern for the automotive industry.

The growing adoption of the Internet of Things (IoT) in vehicles, coupled with the rise in cyberattacks targeting automotive systems, is propelling the demand for robust cybersecurity solutions. Regulatory bodies in Japan are also intensifying their focus on automotive cybersecurity, mandating stricter compliance standards to ensure the safety and security of both vehicles and users. As a result, automakers and cybersecurity firms are increasingly collaborating to develop and implement comprehensive cybersecurity measures, aiming to protect vehicles from potential threats. The Japan automotive cybersecurity market is thus poised for significant growth, reflecting the broader trend towards safeguarding connected and autonomous vehicles in an increasingly digital landscape.

Growth Influencers:

The rapid growth of electric vehicles (EVs) in Japan is significantly driving the automotive cybersecurity market. With 58,813 battery electric vehicles sold in 2022 - marking a 2.7-fold increase from 2021 - Japan is moving toward widespread EV adoption, expected to reach 100% market penetration by 2035. This surge introduces advanced digital technologies, increasing vehicle connectivity and complexity, which heightens the risk of cyber threats. Modern EVs rely on sophisticated software for essential functions, making them vulnerable to potential cyberattacks that could jeopardize safety and consumer data. Japan's regulatory framework is adapting to these challenges, mandating compliance with global standards like UNECE WP.29, which emphasizes secure software updates and continuous monitoring. Moreover, the government’s goal to transition to Clean Energy Vehicles (CEVs) by 2035, supported by substantial subsidies, accelerates the demand for robust cybersecurity solutions. As connectivity rises - with projections of over 15 million connected cars by 2025 - so do the risks, highlighted by incidents like the cyberattacks on Honda and Toyota that disrupted operations and production. Therefore, ensuring comprehensive cybersecurity measures is critical for protecting increasingly digital and interconnected vehicles in Japan's evolving automotive landscape.

Segment Overview:

The Japan Automotive Cybersecurity market is categorized based on Offering, Form, Security, Vehicle Type and Application.

By Offering

• Hardware
• Microcontrollers (MCU)
• ECU
• Cluster meter
• Head-up display
• Electronic mirror
• Multimedia
• Others
• Software
• Services
• SOC
• Others

By Form

• In-Vehicle
• Cloud Services

By Security

• Endpoint
• Application
• Wireless Network

By Vehicle Type

• Passenger Car
• Compact Passenger Cars
• Mid-sized Passenger Cars
• Premium Passenger Cars
• Luxury Passenger Cars
• Commercial Vehicle
• Light Commercial Vehicles
• Heavy Commercial Vehicles
• Electric Vehicles
• Battery Electric Vehicle (BEV)
• Fuel Cell Electric Vehicle (FCEV)
• Hybrid Electric Vehicle (HEV)
• Plug-in Hybrid Electric Vehicle (PHEV)

By Application

• ADAS & Safety
• Consulting Service
• Tool Service
• Vulnerability Diagnosis Service
• Others
• Body Electronics
• Diagnostic Service
• Access Control Management
• Remote Security Management
• Others
• Communication Systems
• Consulting and Integration Services
• Network Monitoring and Analytics
• Public Key Infrastructure (PKI) Services
• Others
• Infotainment
• Secure App Development and Deployment
• Application Security Testing
• Data Privacy Compliance
• Others
• Powertrain
• Real-Time Threat Detection and Mitigation
• Cryptographic Services
• Secure ECU Development
• Others
• Telematics
• Vehicle Tracking and Fleet Management
• Remote Diagnostics and Maintenance
• Data Analytics and Reporting
• Others
• Others
• Compliance and Regulatory Consulting
• Penetration Testing
• Response Planning and Execution
• Others

The hardware segment leads Japan's automotive cybersecurity market, holding a 45.20% share in 2023, highlighting its essential role in vehicle protection. Hardware solutions such as Secure Elements (SEs) and Hardware Security Modules (HSMs) are critical for securing Electronic Control Units (ECUs) and maintaining safe in-vehicle communications. These components provide vital physical security layers necessary for managing complex vehicle networks and ensuring the safe operation of advanced features like Advanced Driver Assistance Systems (ADAS) and infotainment systems. In contrast, the software segment is experiencing significant growth, with a CAGR of 15.84%, driven by the need for sophisticated cybersecurity measures as vehicles become increasingly connected and autonomous. Companies like Argus Cyber Security and Upstream Security exemplify this growth by offering innovative solutions for real-time threat detection and response, emphasizing the importance of both robust hardware and adaptive software in automotive cybersecurity.

The In-Vehicle segment dominates with a 72.64% market share in 2023, emphasizing its importance in safeguarding vehicle systems. This segment focuses on securing Electronic Control Units (ECUs), in-vehicle communication networks like CAN bus, and onboard systems such as ADAS and infotainment. Secure Elements (SEs) and intrusion detection systems (IDS) embedded in vehicles provide real-time protection against cyber threats, ensuring operational integrity and safety. Meanwhile, the Cloud Services segment is growing rapidly, with a CAGR of 15.96%, driven by the demand for remote monitoring, management, and analytics. Cloud solutions enable Over-the-Air (OTA) updates and remote diagnostics, as seen with companies like Tesla, which use cloud platforms for secure updates. Additionally, firms like Upstream Security utilize cloud services for scalable data analysis and threat intelligence, showcasing a shift towards cloud technology for enhanced flexibility and threat management.

In Japan's automotive cybersecurity market, the endpoint segment holds the largest share at 45.03% in 2023, along with the highest CAGR of 15.63%. This dominance reflects the urgent need to secure individual vehicle components amid rising connectivity and sophisticated cyber threats. Major Japanese automakers like Toyota and Nissan are investing heavily in cybersecurity to protect endpoints, such as infotainment systems and ECUs. For example, Toyota collaborates with cybersecurity firms to enhance internal network security, while Nissan incorporates secure boot mechanisms and encryption in its control units. Automotive suppliers like Denso Corporation and Mitsubishi Electric are also key players, developing solutions to protect telematics units and ADAS sensors. The Japan Automotive Cybersecurity Consortium (JACS) fosters collaboration for best practices in endpoint protection, emphasizing the critical need for strong security measures to combat evolving cyber threats.

The Passenger Car segment leads the market with a 45.97% share in 2023, driven by the prevalence of connected technologies in these vehicles. Models like the Toyota Camry and Honda Civic are equipped with advanced infotainment systems and telematics, making them prime targets for cyber threats. Automakers are thus heavily investing in cybersecurity measures to safeguard these endpoints. In contrast, the Electric Vehicles (EVs) segment exhibits the highest CAGR of 16.87%, indicating rapid growth and an increasing focus on securing next-generation vehicles. As EVs such as the Nissan Ariya and Mazda MX-30 become more common, their complex systems - including battery management and charging infrastructure - demand robust cybersecurity solutions. For instance, Nissan employs advanced encryption in the Ariya to prevent breaches, while Mazda enhances security for its connectivity and battery management systems, underscoring the necessity of comprehensive cybersecurity strategies in both established and emerging markets.

The Infotainment segment holds the largest market share at 33.66% in 2023, highlighting the importance of securing in-car entertainment and information systems. These systems, found in models like the Toyota Prius and Honda Accord, manage sensitive data and are crucial to the driving experience, making them attractive targets for cyber threats. Consequently, automakers are investing significantly in cybersecurity measures to protect these infotainment systems from attacks. For example, Toyota's latest systems feature advanced encryption and secure software updates to prevent unauthorized access. Conversely, the ADAS (Advanced Driver Assistance Systems) & Safety segment is experiencing the highest CAGR of 15.78%, driven by the rapid development and reliance on these technologies for vehicle safety. The growing use of ADAS features, such as lane-keeping assist and adaptive cruise control, underscores the need for robust cybersecurity to protect sensors and control systems, as seen with Nissan’s ProPILOT Assist and Subaru’s EyeSight systems.

Competitive Landscape:

The Japan Automotive Cybersecurity market is characterized by a vigorous competitive landscape, with prominent entities Harman International (Samsung), Continental AG, Aptiv PLC, Broadcom Inc, DENSO Corporation and Others at the forefront, collectively accounting for more than 40% of the overall market share. This competitive milieu is fueled by their intensive efforts in research and development as well as strategic partnerships and collaborations, underscoring their commitment to solidifying market presence and diversifying their offerings. The primary competitive factors include pricing, product caliber, and technological innovation. As the Japan Automotive Cybersecurity industry continues to expand, the competitive fervor among these key players is anticipated to intensify. The impetus for ongoing innovation and alignment with evolving customer preferences and stringent regulations is high. The industry's fluidity anticipates an uptick in novel innovations and strategic growth tactics from these leading corporations, which in turn propels the sector's comprehensive growth and transformation.

Report Insights:

• The Japan Automotive Cybersecurity market is projected to grow from US$ 0.36 Billion in 2023 to US$ 1.23 Billion by 2032, at a CAGR of 15.08%.
• Hardware holds a 45.20% share in Japan's automotive cybersecurity market in 2023, crucial for securing ECUs and vehicle networks.
• The software segment is growing at a CAGR of 15.84%, driven by the need for secure OTA updates and advanced threat protection.
• The In-Vehicle segment leads with a 72.64% share, focusing on protecting ECUs, CAN bus networks, and onboard systems like ADAS and infotainment.

Questions to be Answered:

• What is the estimated growth rate of the Japan Automotive Cybersecurity market?
• What are the key drivers and potential restraints?
• Which market segments are expected to witness significant growth?
• Who are the leading players in the market?