Traffic Management Systems Market Size, Share, Forecast, & Trends Analysis by Offering (Hardware (Sensors, Cameras, Others), Solutions (Traffic Monitoring, Remote Enforcement, Others), Services), Deployment (Cloud, On-premise), Technology (IoT, AI, Others) & Geography - Global Forecasts to 2031

Traffic Management Systems Market Size & Forecast

The Traffic Management Systems Market is expected to reach above $58.13 billion by 2031, at a CAGR of 14.1% from 2024 to 2031.The growth of the traffic management systems market is driven by increasing government investments in improving road safety, the rising need to ease traffic congestion, and growing urbanization. However, the high capital and maintenance costs of traffic management systems restrain the growth of this market.

The growing reliance on real-time traffic information and the proliferation of smart cities are expected to generate growth opportunities for the stakeholders in this market. However, the lack of technology adoption in developing countries and the incompatibility and lack of interoperability among different traffic management systems are major challenges impacting market growth.

Additionally, the integration of Artificial Intelligence (AI) in traffic management systems and the utilization of 5G technology for improved accuracy are prominent trends in the traffic management systems market.

Traffic Management Systems Market Growth Drivers

Increasing Traffic Congestion Boosting the Need for Traffic Management Systems

Road traffic leads to longer commutes and decreased productivity. Traffic congestion has a tremendous rippling effect on cities, affecting travel and transport, and thus economic development. There is also an increased risk of road accidents due to traffic congestion. In cases of road rage, drivers engage in risky driving behaviors, including speeding, cutting off other motorists, or tailgating other vehicles out of frustration because of increased traffic congestion. In addition, there is a rise in air pollution, which poses environmental and health risks. Frequent stopping and starting reduces vehicles’ fuel economy and raises pollutant levels. Also, vehicles use more fuel when idle in queues, resulting in financial losses.

Countries are bearing huge costs due to traffic delays, congestion, stoppage of signals, losses in terms of time and fuel, and related factors. For instance, in 2023, annual traffic congestion costs in Bengaluru (India) reached INR 19,725 crores (USD 2,396.9 million). Also, according to the INRIX 2022 Global Traffic Scorecard, congestion cost U.S. drivers over USD 81 billion, U.K. drivers nearly EUR 9.5 billion (USD 10.0 billion), and German drivers EUR 3.9 billion (USD 4.1 billion) in 2022. Such costs can only be reduced by deploying traffic management systems across cities. Traffic management systems help progressively move vehicles through green lights, enable faster tolling of vehicles, make route planning more efficient, and reduce congestion.

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Rising Urbanization Supporting Market Growth

According to the World Bank Group (U.S.), around 56% of the world’s population (4.4 billion) lives in cities. The urban population is expected to more than double by 2050, with nearly 7 of 10 people living in cities.  Urbanization contributes to sustainable growth through increased productivity and innovation. However, urbanization brings challenges, such as the elevated demand for housing and viable infrastructure, including transport.

Moreover, the majority of daily travel is comprised of commutes to work, while aggregation economics favors the centralization of multiple employment industries in urban areas. Urbanization leads to population growth and a shortage of land for roads, resulting in traffic congestion and road accidents. Traffic management systems can help reduce traffic in urban areas.

Furthermore, traffic management systems for route & transportation planning can help cities overcome problems caused by urbanization. They also help in designing and building robust traffic corridors and intersections. For instance, Cubic Corporation (U.S.) offers Synchro Studio, a robust, user-friendly traffic signal timing application that empowers traffic engineers and transportation planners to design and optimize traffic signals, corridors, and networks to improve mobility, reduce congestion, and enhance road safety. Such solutions can help cities overcome traffic problems. Thus, rising urbanization is increasing the need for traffic management systems, driving the growth of this market.

Traffic Management Systems Market Growth Opportunity

Growing Reliance on Real-time Traffic Information Increasing the Utilization of Traffic Management Systems

Real-time traffic information aids in monitoring traffic, allowing drivers and passengers to plan their routes better. Drivers receive crucial information related to traffic congestion, road closures, and other situations that may affect their travel in real time. As this information reduces travel time and congestion, it can also help in lowering vehicular emissions. This information is directly transmitted to linked drivers through GPS devices, directing them to take alternate, less crowded routes.

Drivers are able to receive real-time traffic data as alerts while driving, forewarning them of approaching unexpected traffic incidents and providing them with alternative route options and full visibility of the traffic situation on scheduled routes.

Additionally, real-time traffic information enables proactive decision-making, allowing fleet drivers to react effectively to road accidents, failures, and delays, improving fleet operations. These benefits have increased drivers’ reliance on real-time traffic information. Various companies operating in this market provide real-time traffic data to help travelers make informed decisions. For instance, TomTom B.V. (Netherlands), a Dutch multinational developer and creator of location technology and consumer electronics, provides real-time information about traffic jams, estimated travel time, and road closures to drivers, fleet and logistics providers, on-demand services (ride-hailing, food delivery), and traffic management authorities.

Moreover, market players are focused on partnerships and collaborations to offer advanced real-time traffic information solutions to customers. For instance, in June 2021, TomTom N.V. (Netherlands) signed a new multiyear agreement with GreenMile LLC (U.S.), a logistics software company specializing in last-mile transportation, to integrate TomTom Maps APIs into GreenMile’s solutions, enhancing customers’ vehicle monitoring and real-time route planning. Thus, the increasing reliance on real-time traffic information is driving the development of advanced solutions and increasing the utilization of traffic management systems, generating growth opportunities for market players.

Traffic Management Systems Market Growth Trends

Integration of Artificial Intelligence (AI) in Traffic Management Systems

The global population is growing rapidly due to urbanization, increasing the burden on the world’s infrastructure, particularly transportation systems. Artificial Intelligence (AI) has introduced innovative approaches to reduce traffic congestion, enhance safety, and revolutionize urban mobility.

AI technologies have led to the development of tools that provide capabilities to analyze, detect, and forecast traffic patterns. Other key applications of AI in transportation include traffic detection and traffic sign recognition. AI-powered traffic detection systems monitor traffic conditions with sensors and cameras and push real-time data to drivers, traffic management systems, and transportation authorities. AI-based traffic management systems provide the following benefits:

• Traffic flow prediction
• Incident detection and management
• Adaptive traffic signal control

Utilization of 5G Technology for Improved Accuracy

5G technology has the potential to revolutionize many industries, including traffic management. As cities throughout the world struggle with increased traffic congestion and other road traffic issues, the importance of 5G in improving traffic management systems is increasingly being recognized. 5G provides unmatched speed, lower latency, and the ability to connect multiple devices simultaneously. These characteristics make it an excellent foundation for traffic management systems that rely on real-time data gathering and processing to optimize traffic flow and improve road safety.

One of the most important ways 5G technology influences traffic management is by enabling Vehicle-to-Everything (V2X) connectivity, which allows cars/drivers to respond quickly to changing road conditions, minimizing accidents, and optimizing traffic flow by exchanging information with other vehicles, infrastructure, and pedestrians.

Moreover, 5G improves the capacities of traffic management centers, allowing for faster operations. It also allows for the introduction of smart traffic lights, which modify their durations in real time to reduce congestion and improve traffic flow. 5G technology is becoming increasingly critical in improving traffic management systems as cities around the world seek to address traffic congestion and related issues.

Traffic Management Systems Market Analysis: Key Findings

By Offering: In 2024, the Hardware Segment to Dominate the Traffic Management Systems Market

Based on offering, the global traffic management systems market is segmented into hardware, solutions, and services. In 2024, the hardware segment is expected to account for the largest share of 53.8% of the global traffic management systems market. The large market share of this segment is attributed to the increasing deployment of surveillance cameras to identify vehicles, incidents, and traffic violators, the increasing need to install smart traffic signals due to growing traffic congestion incidents, and the rising focus of players operating in the market on development of hardware with advance facilities such as automatic number plate recognition.

For instance, in November 2021, Liverpool City Region (LCR) Combined Authority awarded a contract to Yunex GmbH (Germany), a provider of innovative mobility ecosystems and services, to supply and install 37 Zephyr air quality monitors for reviewing and analyzing environmental data. The data will be utilized to give immediate responses and enable the implementation of strategies based on real-time pollution, temperature, humidity data, and current air quality levels.

However, the solutions segment is expected to record the highest CAGR during the forecast period. The growth of this segment is driven by the growing concern about traffic congestion and the rising need for remote enforcement solutions to identify & penalize traffic violations.

By Deployment Mode In 2024, the Cloud-Based Deployments Segment to Dominate the Traffic Management Systems Market

Based on deployment mode, the global traffic management systems market is segmented into cloud-based deployments and on-premise deployments. In 2024, the cloud-based deployments segment is expected to account for the larger share of 73.1% of the global traffic management systems market. The large market share of this segment is attributed to the increasing avenues for cloud-based deployments, superior flexibility and affordability offered by cloud-based deployments, and the increasing adoption of cloud-based traffic management systems.

Moreover, the cloud-based deployments segment is expected to record the highest CAGR during the forecast period. The growth of this segment is driven by the rapid evolution of new security and advanced capability avenues for cloud-based deployments. For instance, in July 2020, Econolite Group, Inc. (U.S.), a company engaged in developing mobility products and software, launched Centracs Mobility, a highly flexible cloud-based software solution platform designed to provide added value and actionable information, augmenting the traffic management software toolset.

By Technology In 2024, the IoT Segment to Dominate the Traffic Management Systems Market

Based on technology, the global traffic management systems market is segmented into AI, big data, IoT, cloud computing, and other technologies. In 2024, the IoT segment is expected to account for the largest share of 33.1% of the global traffic management systems market. The large market share of this segment is attributed to factors such as the increasing utilization of IoT devices among traffic operators for monitoring driving behavior, gathering information on traffic patterns, ensuring a safe driving experience, and addressing emergencies and among automotive manufacturers to enable navigation capabilities in their vehicles.

For instance, in July 2023, NLEX Corporation (Philippines), a company engaged in the development, design, construction, finance, operation, and management of toll road projects, installed 12 additional cameras on the toll roads it manages and operates in the Philippines to provide safe and hassle-free mobility on expressways.

Moreover, the IoT segment is also projected to record the highest CAGR during the forecast period. The growth of this segment is driven by the growing use of connected devices in smart cities and the increasing integration of IoT technology in traffic management systems to ensure safe and hassle-free mobility. In addition, the benefits of IoT in traffic management, such as enabling connectivity across and between traffic management systems, increasing safety across intersections and highways, and providing accident detection capabilities, also contribute to segment growth.

Geographical Analysis

In 2024, Asia-Pacific is expected to account for the largest share of 30.4% of the global traffic management systems market. Asia-Pacific traffic management systems market is estimated to be worth USD 6.99 billion in 2024. The large market share of this segment is attributed to the presence of densely populated cities, the growing deployment of traffic management systems in the region to handle traffic flow, and increased congestion problems across urban cities. For instance, in September 2020, Beijing, China, installed a smart crosswalk that can send audio alerts to pedestrians. It uses facial recognition to catch traffic violators and display their faces on public video screens. It is the first smart zebra crossing in Beijing that can alert pedestrians through voice alerts and lights.

Moreover, Asia-Pacific is expected to record the highest CAGR during the forecast period. The growth of this market is driven by stakeholders' focus on the development of traffic management systems, rapidly growing urbanization in the region, and government initiatives for road infrastructure. For instance, in July 2020, Huawei Technologies Co., Ltd. (Japan), a leading global provider of information and communications technology (ICT) infrastructure and smart devices, launched an Intelligent Traffic Management Solution to address traffic problems. Huawei's Intelligent Traffic Management Solution harnesses advanced technologies, including big data, AI, cloud, 5G, and more, to address accidents and heavy congestion problems.

Traffic Management Systems Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last 3–4 years. Some of the key players operating in the Traffic Management Systems market are IBM Corporation (U.S.), Johnson Controls International plc (Ireland), TomTom N.V. (Netherlands), Q-Free ASA (Norway), Indra Sistemas, S.A. (Spain), Cisco Systems, Inc. (U.S.), Huawei Investment & Holding Co., Ltd. (China), Cubic Corporation (U.S.), Yunex GmbH (Germany), Oriux (U.S.), Kapsch TrafficCom AG (Austria), SWARCO AG (Austria), TransCore (U.S.), Teledyne FLIR LLC (U.S.), PTV Planung Transport Verkehr GmbH (Germany), Chevron Traffic Management Limited (U.K.), Onnyx Electronisys Pvt. Ltd. (India), Miovision Technologies Incorporated (Canada), Econolite Group, Inc. (U.S.), and Bercman Technologies AS (Estonia).

Traffic Management Systems Industry Overview: Latest Developments from Key Industry Players

• In August 2023, TomTom N.V. (Netherlands) partnered with StreetLight Data, Inc. (U.S.), the leading Big Data company, to incorporate TomTom’s best-in-class global data into StreetLight’s growing line of cloud-based products that support transportation professionals with critical analytics for any road and any mode.

• In May 2023, GLOBALVIA Inversiones, S.A.U. (Spain), a Spanish multinational transport infrastructure company, announced the deployment of a new AI data analytics platform to monitor road traffic in real time to help improve safety and reduce incident response times on Ruta 27 (national route 27) in Costa Rica.

• In September 2022, SWARCO AG (Austria) entered into a cooperation agreement with MicroTraffic Inc. (Canada), a leading provider of microscopic traffic data for road safety engineers, to add an important feature to SWARCO’s MyCity software suite, which helps mitigate accidents involving vulnerable road users.

Traffic Management Systems Market Research Summary

Key questions answered in the traffic management systems market report: