As global competition intensifies in the "connected car" industry, seen as a future growth engine, industry analysts say Korea, despite being a powerhouse in autos and IT, is falling behind in software competitiveness. China is seizing the market with massive government support and big tech at the forefront, but Korea, even with world-class networks and hardware manufacturing technology, lacks a national, comprehensive strategy to turn those into market dominance.
A connected car refers to a system in which a vehicle exchanges information in real time with surrounding vehicles and transportation infrastructure through a wireless network. It is also called a "smartphone on wheels." The global market size has surpassed 120 trillion won, and most new cars now include this feature as standard. The industry stresses that connected cars are the core platform of the future auto sector and, further, a strategic asset directly tied to national security.
Jeong Won-seon, head of the Connectivity and Security Research Division at the Korea Automotive Technology Institute, said at the "Policy forum on strategies to develop the next-generation connected car industry" held at the National Assembly Members' Office Building in Yeouido, Seoul, on the 15th that "the domestic industry's global market share is under 7 percent," and noted, "China, under the AIoV (artificial intelligence of vehicles) concept, has moved beyond simple consolidation to the stage of creating AI-based services, but Korea is lagging in applying these technologies."
In fact, Chinese ICT (information and communications technology) giants such as Tencent, Baidu, and Huawei are building software ecosystems spanning operating systems (OS), cloud, and map data, backed by government investment. Industry insiders warn that "China's accumulated data and platform competitiveness could soon seize the global standard."
In Korea, delays in standardization have slowed the spread of vehicle-to-everything (V2X) services that consolidate vehicles with everything. Park Jun-eun, executive vice president at LG Electronics, said, "Even though Korea has world-class wireless communication infrastructure, there is a lack of institutional foundations and testbeds to trial and verify it." He said, "V2X is an area Korea can fully lead by leveraging its ultra-high-speed networks and geographic characteristics, so government-level support for standardization and demonstrations is urgent."
Complex regulations were also cited as holding back industry growth. Joo Hyeong-jin, vice president at Hyundai Motor, said, "As cybersecurity regulations are being implemented in Europe, India, China, and Japan, the burden is heavy to obtain repeated certifications of similar requirements in different formats," and proposed, "In Korea, authorities should recognize overseas certifications and provide government support for consulting and testing environments for partner companies." Autocrypt Vice President Shim Sang-gyu, from the vehicle security specialist company, also said, "Small and midsize partners lack software personnel and equipment and can barely respond to security regulations, so government support is desperately needed."
The industry pointed out that these regulatory burdens and infrastructure gaps are also delaying the spread of new services. Kim Il-young, head of division at SK Telecom, said, "There are too few domestic V2X demonstration projects, so carriers' interest has waned," adding, "The absence of a killer service is the biggest factor blocking industry expansion." He emphasized, "For new services to emerge, infrastructure capable of handling ultra-low latency and high-volume traffic must be in place," and said, "Next-generation infrastructure, such as processing computation at the base station, is hard for the private sector to shoulder alone, so government investment and incentives are needed."
Furthermore, the industry urged the government to play a strategic role that goes beyond the current level of public-private cooperation. The "Connected Mobility Alliance," launched in 2022 and led by LG Electronics with 98 companies participating, is operating, but industry officials say such a council alone cannot counter global competition. Park Jun-eun, executive vice president at LG Electronics, said, "Chinese companies, backed by massive government support, are growing rapidly by leveraging price competitiveness, making it hard to compete," and added, "To succeed on the global stage, we need a comprehensive and systematic government strategy that includes R&D, regulatory innovation, and tax and financial support."
In response, Park Tae-hyeon, director of the automobile division at the Ministry of Trade, Industry and Energy, said, "This year, we are investing 30 billion won in 18 projects to support hardware, software, security, and service demonstrations," and added, "We will also pursue international standardization and build certification infrastructure in parallel to bolster industry competitiveness."