The global smart transportation market was valued at USD 110.53 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 13.0% from 2023 to 2030. This growth is primarily fueled by advancements in urban development projects, government initiatives aimed at reducing greenhouse gas emissions, and the rising demand for integrating technology into traffic control systems. Many cities face significant challenges, including poor quality and safety in public transportation, insufficient capacity to manage public transport effectively, concerns regarding road safety, inadequate traffic management, and parking difficulties. These issues are contributing to an increased demand for smart transportation systems, which are expected to see substantial growth in the near future. Factors such as rapid urbanization, the widespread acceptance of Internet of Things (IoT) technologies, and the rollout of 5G connectivity are facilitating the implementation of smart transportation infrastructure.

Between 2018 and 2019, the market witnessed substantial growth due to the application of existing technologies in vehicles and transportation infrastructure aimed at enhancing traffic management, improving safety, reducing maintenance costs, and enabling more efficient use of transportation networks. Additionally, the introduction of autonomous vehicles, increased investment in smart city initiatives, a decline in vehicle ownership, and the growth of Mobility as a Service (MaaS) are likely to create significant opportunities for companies in the smart transportation sector.

For instance, in September 2022, Indra Sistema S.A. announced a collaboration with Masmovil Group, a broadband service provider, to create an advanced ecosystem that will promote the growth of smart 5G services and solutions for the transportation industry. This partnership aims to develop and test innovative solutions based on the 5G communication standard, facilitating smarter, more connected, and sustainable mobility.

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Solution Insights

In 2022, the traffic management segment held the largest market share, accounting for over 32%, and is expected to remain dominant throughout the forecast period. Key solutions within this segment include integrated monitoring systems, intelligent parking systems, transportation planning systems, and ticketing management solutions. Among these, traffic management systems are the most recognized and widely adopted.

The demand for traffic management systems is driven by their ability to enhance safety, effectively manage traffic congestion, minimize energy consumption, and reduce pollution, among other benefits. These systems also address traditional challenges such as transit delays and enhance security for citizens.

For example, in August 2022, LG CNS announced plans to develop systems for both public transit and electric vehicles. The company aims to provide consulting services for smart city design projects in East Kalimantan, Borneo Island, and Indonesia's new capital city. Furthermore, LG CNS is working on establishing a foundational plan for introducing electric vehicles and developing public transit networks.

Another segment expected to experience significant growth is parking management. This segment encompasses systems such as exit ticket readers, decentralized payment collection systems, and ticket dispensers at entry and exit points. The rise in cloud-based parking services and the increasing availability of off-street parking are driving this segment's expansion. For instance, following the COVID-19 pandemic, various jurisdictions reinstated parking fines for off-street parking. In May 2020, the Lancaster City Council reintroduced parking fees in some of its off-street parking areas.

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