Intelligent Transportation System Market is expected to reach US$ 66,355.13 Million by 2031

Increasing Smart City Initiatives and Infrastructure Development are Driving Intelligent Transportation System Market Size

According to our latest study on "Intelligent Transportation System Market Analysis and Forecast to 2031 – by Type, System, and Application," the market is expected to grow from US$ 35,938.98 million in 2023 to US$ 66,355.13 million by 2031; it is anticipated to record a CAGR of 8.0% from 2023 to 2031. The report includes growth prospects owing to the current intelligent transportation system market trends and their foreseeable impact during the forecast period.

Intelligent transportation systems (ITS), when combined with infrastructure and technology, help improve transportation in urban cities. Interconnected networks of sensors and cameras gather information and data in real-time to power the system. Adaptive traffic management is powered by this data, allowing for quick reactions to accidents and traffic jams. Smart city projects are increasing rapidly with significant investment from governments of several countries across the world. According to the Organization for Economic Cooperation and Development (OECD), the smart city market was valued at US$ 511.6 billion in 2022 and is projected to reach US$ 1,024 billion by 2027; it is expected to register a CAGR of 15.0% during the forecast period.

Intelligent Transportation System (ITS) Market — by Geography, 2023

Source: The Insight Partners Analysis

Additionally, geographic information system integrated solutions such as Building Information Modeling (BIM) are widely used for town planning. As of 2023, more than 170 smart city projects were initiated in European countries such as the Netherlands, Italy, Germany, France, and Spain. European Investment Bank provided more than US$ 23.13 billion to support sustainable smart city project developments in Europe.

Fleet management, traffic controls, and real-time public transportation tracking are among the major features of ITS that help in decreasing pollutants, promoting safety, enhancing public transportation efficiency, and avoiding traffic congestion. In 2023, the Government of China announced its plan to build more than 500 smart cities. In July 2023, the government financed a project worth US$ 200 million to develop Guangzhou Smart City Project Phase 1. This project aimed to improve the digital infrastructure required by the Chinese Guangzhou municipal government for urban infrastructure development. Thus, the increasing number of smart city projects propel the demand for ITS.

Based on type, the intelligent transportation system market is segmented into hardware, software, and services. The hardware segment held the largest intelligent transportation system market share in 2023. The hardware segment is driven by the increasing demand for advanced infrastructures to manage traffic flow and enhance safety. Key components of this segment include sensors, cameras, traffic signal controllers, and electronic toll collection systems. Siemens and Kapsch TrafficCom are among the major players at the forefront of developing cutting-edge technologies to improve traffic management. For instance, in July 2021, Former Siemens Intelligent Traffic Systems launched its new brand, Yunex Traffic, and started operating it as a new business entity of Siemens Mobility in 2021. The company is expected to offer comprehensive, smart, and innovative mobility solutions for roads in cities.

The growing complexity of transportation systems necessitates ongoing support and consulting services. Companies such as Accenture and Deloitte specialize in providing these services, focusing on integration, system resilience, and efficiency. Accenture has partnered with various transportation agencies to develop strategies that enhance operational efficiency and sustainability through smart technologies. For instance, in September 2022, Accenture announced the acquisition of MacGregor Partners, one of the leading supply chain consultancy and technology providers in intelligent logistics and warehouse management. The acquisition expands Accenture's supply chain distribution network and fulfillment transformation capabilities powered by Blue Yonder technology.

Based on system, the global intelligent transportation system market is segmented into advanced traffic management system, advanced traveler information system, ITS-enabled transportation pricing system, advanced public transportation system, commercial vehicle operation, and others. The advanced traffic management system (ATMS) segment held the largest share of the intelligent transportation system market in 2023.

The geographic scope of the intelligent transportation system market report entails North America (the US, Canada, and Mexico), Europe (Spain, the UK, Germany, France, Italy, and the Rest of Europe), Asia Pacific (South Korea, China, India, Japan, Australia, and the Rest of Asia Pacific), the Middle East & Africa (South Africa, Saudi Arabia, UAE, and Rest of Middle East & Africa), and South & Central America (Brazil, Argentina, and the Rest of South & Central America). The US dominated the market in North America owing to the high demand for innovative technologies and rapid infrastructure growth. With continuous development and investments in the upgradation of technology, the demand for intelligent transportation systems is growing in the US. For instance, in July 2024, the Pennsylvania government announced plans to upgrade its tolling system to open road tolling by 2025. The open road tolling systems automatically charge passengers who drive at high speeds. This system eliminates the need for tolling booths and lane-switching. The transportation industry in Canada plays an important role in the Canadian economy. As per the data published by the Canadian government in 2022, the transportation and warehousing industry accounted for US$ 81.5 billion of revenue in the country’s overall GDP. With such reliance on the transportation industry, the Government of Canada invests heavily in the development of an efficient and safe transportation network. Such government initiatives are driving the demand for intelligent transportation systems in the region.

High demand for innovative technologies and rapid developments in infrastructure contribute to the rising demand for intelligent transportation systems (ITS) in the US. According to the data published by the American Society of Civil Engineers in 2021, the roads and highways in the US transported goods worth ~US$ 17 trillion, which accounted for 72% of the total country's goods transportation. Further, according to the US Department of Energy, in 2021, there are a total of approximately 4 million miles of roads and highway infrastructure in the US. Apart from the road infrastructure, the country is highly dependent on aviation for the transportation of cargo and passengers. According to data published by the Airports Council International in 2023, the total aircraft transportation in the US increased by 4.5% in 2023 from 2022. Such high dependency on aviation and road infrastructure led to increased demand for safety and traffic management systems in the US. Owing to this, several state governments in the US invested in the traffic management system along with other intelligent management systems. For instance, in April 2024, the Minnesota Department of Transportation initiated the installation of the traffic management system in the Steele-Freeborn county line to US Highway 65. With high dependency and increasing traffic volume, the demand for intelligent management systems continues to increase in the US.

Hitachi; Siemens; DENSO; Cisco Systems, Inc.; INDRA SISTEMAS; SA; EFKON GmbH; Cubic Transportation Systems, Inc.; Kapsch TrafficCom AG; TomTom International BV.; and Teledyne FLIR LLC. are among the key players profiled in the intelligent transportation system market report. Companies in the market mainly focus on product and service enhancements by integrating advanced features and technologies in their offerings.