Electrification, Digitalization, and Automation are top factors burgeoning the demands on the global automotive electronics market
Electronics has remained one of the most essential commodities in the automotive sector since the commencement of motorized vehicles. The integration of electronic equipment started from the ignition and integrated circuit wirings, and today, we are witnessing a whole new era of electrification in the automotive industry, that is, the new electric vehicle (EV) and autonomous vehicle (AV). Electronic systems in a vehicle are generally divided into six categories, namely, powertrain electronics, entertainment electronics, safety, and convenience system, vehicle and body control, and in-cabin information. All of the segments mentioned above hold a wide range of function among them, including but not limited to engine controllers, transmission controllers, voltage regulators, onboard infotainment system, airbag sensors, climate controls, air-bags sensors, power steering, electro-chromatic mirrors/auto-dimming mirrors, and a head-up display. The automotive sector is expanding its fleet in terms of commercial, passenger, and two and three-wheeler segments to cater to the augmenting demands for vehicles from the consistently rising population in all parts of the world. With the flourishing automotive industry, the demands for electronic systems installed in a vehicle are also rising. Also, with a pervasive electronic system in automobile operations, the driving performance, fuel efficiency, and comfort for the riders and drivers have been optimized. This growth is inducing significant revenues in the global automotive electronics market, which held the global market size of $245.3 billion as of 2018. Considering the exuberant growth in the automotive sector, the opportunities in the global Automotive Electronics Market are expected to grow at a CAGR of 5.64% during the forecast period of 2019 to 2025.
APAC: The Revenue Breeding Ground for Key Players in the Market:
A thorough analysis of the market concluded that the Asia-Pacific was the most lucrative demography in the automotive electronics market, and was accountable for 38.7% of the total market share. Developing economies such as India, China, and Japan accommodates a significant population of electronic and automotive manufacturers. These production facilities are building automotive electronic equipment at a rampant pace. The primary cause of this pace is the growth of electric vehicle (EV) and autonomous vehicle (AV) segments in the region. According to the International Energy Association (IEA), globally, China registered the maximum sales of electric vehicle in 2017, 1.23 million electric vehicles were sold in China in that year. This intensified demands for electric vehicles is the result of stringent mandates by the Chinese government towards carbon emission and fuel consumption. China’s Ministry of Industry and Information Technology (MIIT), initiated the New Energy Vehicle’s (NEV) mandate in September 2017. The initiative highlights the goals of promoting new energy vehicles by offering additional compliance flexibility to the existing fuel consuming vehicles. As per this mandate, NEV credits will be allotted to emerging vehicles based on their electric range and efficiency, which will further result in subsidized charges for both the vehicle manufacturer and buyer. This regulation is expected to increase the production and demands for electric vehicles in China, which will further generate opportunities for respective electronic companies to implement advanced techniques in the automotive industry. Apart from powertrain electronics, infotainment systems, and in-cabin electronics, the EVs and AVs use an electric-based power converter, motor, transmission, suspension, and sensors; therefore, the requirement of electric equipment are increasing with the boisterous technological advancements in the automotive industry. Automotive electronics is not limited to vehicles; the traffic management and transport control system is leveraging upon the Internet of Things (IoT) to offer electrical connectivity of the road with the vehicle. China is constructing a 100 km long highway with dedicated lanes for autonomous and semi-autonomous vehicles. By 2020, this infrastructure will host numerous electric vehicles that will employ an innumerable sensor and electric equipment that will assist these vehicles in toll payments, handling speed limit, and understanding the traffic. Also, Japan is considered as one of the most advanced nations in terms of innovation and infrastructure and is readily adopting and developing unique solutions for incorporating automated vehicles for its aging population.
Key Application in the Automotive Electronics Market
Electronic equipment in a vehicle are numerous; however, the body electronics applied in the vehicles are considered as the key application segment in the global automotive electronics market. Foreseeing the increasing number of accessories such as head-up display and advance infotainment system in the vehicles, the body electronics application in the automotive electronics market is expected to grow at a CAGR of 7.4% during the forecast period. Body electronics in an automotive vehicle includes padded knee bolster, electro-chromatic mirrors/auto-dimming mirrors, energy-absorbing steering system head restraints, on/off switches for airbags, passenger sensing system, and back-up sensing system. Automatic doors, windows, sunroofs, headlights, and emergency systems rely on an electronic system for successful operation in the vehicle. All the above-stated features of the vehicle are provided by the companies active in the automotive electronics market.
Automotive Electronics Market Trends
· Mobile Application Supported Automobiles: Majority of the premium automotive manufacturers are offering mobile applications to operate the electronic equipment in a vehicle. With this application, the car owners can remotely lock/unlock the car, open/close doors, windows, engine hood, and the trunk. Numerous automotive manufacturers are offering parking assistance, and self-parking functions in vehicles, these features use multiple sensors and other electronic equipment, which is increasing the activities in the OEM’s involved in the automotive electronics market.
· Innovative Safety Solutions: The International Standardization Organization (ISO) guides the OEMs of automotive electronics and suppliers to monitor their processes for prioritizing, identifying, and minimizing the risks associated with safety-related electronics automotive systems. Automated airbags, electronic stability control (ESC), lane departure warning system (LDWS), and anti-lock braking system (ABS) are some of the primary safety functions being adopted by automotive manufacturers. The demands for such safety systems are increasing in the emerging markets owing to the improving road safety standards and consumer awareness. Rampantly incrementing vehicle population in countries such as China, India, Brazil, and Thailand are surging the risk of road fatalities and thus supporting the demands for advanced safety systems in commercial and passenger vehicles. Furthermore, a global initiative termed New Car Assessment Program (NCAP) is working to reduce mortality and injuries on the road, thereby, catalyzing the electronic safety systems in a vehicle.
· Vehicle to Vehicle Communication (V2V): This is an advent technology similar to Wi-Fi, which will be gradually adopted as a standard feature for every vehicle. With this technology, the connected vehicles will possess the ability to share information about driving conditions such as speed, weather, sudden braking, and road conditions. This integration will employ certain electronic features in the vehicle, such as electric transmission, wireless communication, and advanced sensors. This innovation will encourage automotive electronics manufacturers to develop unique electric solutions for the existing and upcoming vehicles in the automotive industry.
· Intelligent Transportation System (ITS) to Digitalize to and Monitor Traffic on the Road: Road-mapping techniques such as expressway monitoring and electronic road pricing system (ERP) are being studied as a part of automotive IoT. Advance actuators and high-performance sensors could find the application on roads and highways the uses perception capabilities of vehicles on the road to update cloud-based high-definition maps. NVIDIA is developing a solution termed myRoutes which updates the maps in real-time. With this solution, the smart and autonomous vehicles will remember the regular routes on the map and will also be capable of diverting the route according to congestion in traffic. Undoubtedly, these new-age solutions will incorporate numerous electronics techniques in the automotive sector, which will subsequently support the automotive electronics market.
Automotive Electronics Market Competitive Landscape
The companies influencing the automotive electronics market are Bosch, Denso, Continental, TRW, ZF Friedrichschafen, Delphi, Aptiv, Intel, Keihin, Magneti Marelli, Hella, Omron, TI, NXP, and Melexis.
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