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China to lead $87 billion market for self-drive cars

Carmakers and technology developers building self-driving cars can look forward to a market worth $87 billion by 2030, according to research and advisory firm Lux Research.

However, before you prepare to take off those driving gloves and sit back and enjoy the ride, analysts are skeptical as to whether the car of the future will be totally autonomous, saying the best features we can look forward to are simple driver-assists like adaptive cruise control.

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A Google self-driver at company headquarters in Mountain View, Calif.
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A Google self-driver at company headquarters in Mountain View, Calif.

"In spite of the tremendous hype around driverless vehicles, a vehicle that can truly drive itself in all conditions will not be on the road by 2030 in the likely scenario," the study, released on Tuesday, said.

Lux Research predicts these low-level autonomous cars with modest features will be the mainstay for the industry by then and will account for 92 percent of the autonomous market.

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More advanced cars using high-resolution special maps, demonstrated by Google and Mercedes-Benz, will gain only 8 percent of the market by 2030, while no fully autonomous cars will hit the market by this point in time, it added.

Rainer Mehl, the head of manufacturing consulting at data firm NTT Data agrees, being equally skeptical that cars with full autonomy will be on the roads in the near future.

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"Other than user acceptance, the main barriers will be legal and product safety regulations," he told CNBC via email.

"Technology will be available at acceptable costs, especially if lower level autonomy features like autonomous parking continue to be key differentiators for leading manufacturers."

They may have long been the stuff of science fiction, but a study in January by IHS Automotive estimated that autonomous vehicles will rapidly become a popular reality. The company believed that by 2035 self-driving cars, or SDCs, will account for half of the vehicles sold in North America with sales worldwide reaching about 11.8 million.

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Google is one such company that has been active with its development and innovation in the space. Nissan too, the sixth-largest automaker in the United States, announced in August 2013 that it will sell a self-driven car by 2020. These vehicles will give the user the choice to either drive or let the computer take over that duty, according to CEO Carlos Ghosn.

In the report, Lux Research explained that North America will initially lead the market opportunity in SDCs but China's market share will grow rapidly to claim a 35 percent share of the 120 million cars sold in 2030. This means, according to its estimates, it will account for revenues of $24 billion, against $21 billion for the U.S. market and $20 billion for Europe.

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"I think that it's realistic that demand (from China) for feature-rich cars will overtake Europe and the U.S. at some point by 2030 or even earlier," Mehl told CNBC.

"A more open attitude from Chinese premium car buyers towards high-tech features, the high relevance of status symbols and probably less legal restriction is likely to further speed up demand."

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