World OEM Automotive Electronics

Global demand to advance 12.3% yearly through 2014
In a rebound from depressed 2009 levels, global demand for light vehicle original equipment manufacturer (OEM) automotive electronics will advance 12.3 percent annually to $174 billion in 2014. Beyond the expected recovery from the 2009 recession, automotive electronics demand will find uplift from increasing regulatory pressure and the continued search among automakers for cost-effective ways to differentiate their products.

Emerging markets focus on standard electronics
The automotive OEM electronics industry in developed markets is largely mature, with even mass-market vehicles featuring up to nine airbags, advanced electronic stability program (ESP) technologies and the latest entertainment systems. Emerging markets typically have more basic electronics needs and focus on technologies long-standard in developed countries. Examples include safety technologies such as standard airbags and antilock brake systems (ABS), and powertrain and emissions applications like port fuel injection and closed-loop catalytic converter systems. Another growing dynamic in many emerging markets is the focus on comfort, convenience and entertainment offerings such as power windows, doorlocks and powerful audio heads, which car buyers value for their visible status. Features such as ABS and ESP provide real functional differentiation, yet remain largely invisible.

The 2009 recession caused developed and emerging automotive markets to take significantly different paths, with the former suffering from massive sales drop-offs while the latter moved forward strongly after a mild downturn. For example, light vehicle sales in the key developed markets of the US, Western Europe and Japan fell 9.2, 2.1 and 4.4 percent per year, respectively, from 2004 to 2009, while emerging markets Brazil, China, and India grew 14.1, 26.4 and 12.1 percent, respectively, during the same period. While the faster-growing emerging markets will likely set the global pace going forward, they do not produce the same per-vehicle electronics revenues because many of the electronics technologies they currently contain and will use in the future have already been commoditized in terms of price.

Safety, security electronics to register biggest increase
Safety and security electronics will register the biggest increase through 2014, as more advanced safety features percolate down into mass market vehicles. Powertrain electronics will also experience strong demand, driven by stringent new fuel economy and emissions standards in developed markets, particularly the US and Western Europe. Growing from a small base, communication and navigation electronics systems will see rapid increases as more OEMs integrate these handy technologies into their vehicles. Instrumentation and comfort, convenience and entertainment electronics will experience lower but still attractive growth rates as more emerging market players install these features in their vehicles to meet customer demand.

PRESS RELEASE

Global Demand for OEM Automotive Electronics to Reach $177 Billion in 2014

In a rebound from depressed 2009 levels, global demand for light vehicle original equipment manufacturer (OEM) automotive electronics will advance 12.4 percent annually to $177 billion in 2014. Beyond the expected recovery from the 2009 recession, automotive electronics demand will be boosted by increasing regulatory pressure and the continued search among automakers for cost-effective ways to differentiate their products -- a role electronic systems ably fill. These and other trends are presented in World OEM Automotive Electronics, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

The 2009 recession caused developed and emerging automotive markets to take significantly different paths, with the former suffering from massive sales drop-offs while the latter moved forward strongly after a mild downturn. Light vehicle sales in the key developed markets of the US, Western Europe and Japan fell significantly from 2004 to 2009, while emerging markets Brazil, China, and India grew strongly during the same period. While the faster-growing emerging markets will likely set the global pace for automotive electronics demand going forward, they do not produce the same pervehicle electronics revenues because many of the technologies they use have already been commoditized in terms of price.

Safety and security electronics will register a strong increase in demand through 2014, as more advanced safety features percolate down into mass market vehicles. Powertrain and emissions electronics will also post solid gains, driven by stringent new fuel economy and emissions standards in developed markets, particularly the US and Western Europe. Growing from a small base, communication and navigation electronics will record the most rapid sales increases as more OEMs integrate these handy technologies into their vehicles. Instrumentation and comfort, convenience and entertainment electronics will have lower but still attractive growth rates as more emerging market players install these features in their vehicles to meet customer demand. In developed automotive markets, the coming decade is rapidly shaping up to be one focused on expanding the driver’s capabilities to react to events or to see further and anticipate more fully any potential challenge ahead on the roadway, and electronics technologies are slated to play major roles. However, in the medium term, a new focus on frugality in these markets could reduce interest in the latest electronics applications.