Automotive Electronics Market: Introduction

Global Automotive Electronics Market size exceeded USD 259 billion in 2020 and is estimated to grow at over 8% CAGR between 2021 and 2027. The global automotive electronics market size is expected to reach USD xx.xx billion by 2027; increasing adoption of electric vehicles to reduce pollution and manage fuel consumption will propel the industry growth opportunities. The increasing integration and implementation of advanced safety systems such as automatic emergency braking, airbags, parking assistance systems, and lane departure warning to decrease road accidents is expected to favour demand over the forecast period. Moreover, features such as emergency call systems, alcohol ignition interlocks, and accident data recorder systems are rapidly adopted to safeguard in-vehicle passengers and are expected to drive market growth over the forecast period. Development trends such as lightweight materials, miniaturization, and integration of artificial intelligence in automobiles will drive the automotive electronics market during the forecast period.

Increasing safety and security concerns to curb the rising road fatalities in developed and developing economies across the globe are the factors anticipated to drive the demand for automotive electronics. The rising demand for electric vehicles, autonomous vehicles, and state-of-the-art vehicle technology is also expected to fuel the market growth.

Global Automotive Electronics Market Size was valued at USD 228.56 billion in 2018 and is expected to grow at a faster pace during the forecast period.  At present, automotive market is highly focused towards the safety and security of the occupants owing to which the market is witnessing a rise in the demand for automotive components such as safety sensors, microcontrollers, and processors, etc. The automotive electronics market is anticipated to grow over the forecast period, primarily attributed to increasing stress by the government bodies’ safety norms such as Euro New Car Assessment Program (NCAP) and the U.S. National Highway Traffic Safety Administration (NHTSA). Thus, facilitated the growth of automotive electronics market over the projected period.

Automotive Electronics Market Size Components Type (2021-2027)

Advance Driver Assistance System (ADAS)

Increasing concerns regarding the safety and security, along with the increasing need for innovative features in the automobiles are significantly driving the automotive electronics market. The dedicated players in this market such as ON Semiconductor, NXP Semiconductors, ST Microcontrollers and others, are largely inclined to offer the advanced safety systems such as ADAS in the favor of the passengers and driver. ADAS system comprises of safety sensors such as radar, ultrasonic, camera and lidar. These electronic parts are in demand currently, owing to their provided safety features such as lane departure warning, lane keeping assists, advanced navigation and others. The U.S. New Car Assessment Program had mandated to equip the passenger vehicle with the safety features such as emergency braking system and lane departure warning to attain the five-star safety rating. This move is expected to create huge demand for electronic components in the market thereby anticipated, it would offer significant growth in the automotive electronics market.

The rise in the cyber crime through automotive electronics coupled with the rising complexities in the system are expected to hinder the growth of automotive electronics market over the forecast period.

Market segmentation: By Components Type

Automotive electronics market is segmented by components into memory, sensors, microcontrollers, microprocessors, display & lightning, and others. The sensors segment is anticipated to have a prime share in the automotive electronics market followed by microprocessors. The upsurge is largely attributed towards the rise of safety standards amongst the automobile manufacturers, primarily owing to the rise in global road accidents. About 1.3 million people dies in road fatalities every year, average 3,287 deaths per day, globally, as per Association of Safe International Road Travel. These sensors act as safety equipment by detecting the object thereby helps in avoiding the accidents, thus, anticipated to contribute prime share in the automotive electronics market.

Market segmentation: By Application

On basis of application, the automotive electronics market is segmented into ADAS, infotainment, powertrain, body electronics, others. ADAS is anticipated to be the fastest growing segment in the automotive electronics market owing to its rising demand by the OEMs which includes safety sensors, cameras, microcontrollers and others. The rise in demand is attributed by the growing road accidents due to distracted driving. According to NHTSA, distracted driving took life of around 3450 people in 2016 in the U.S. alone. Thus, the rise in the attention towards safety is expected to grow the automotive electronics market.

Market segmentation: By Vehicle Type

Luxury vehicles is predicted to be the fastest growing segment, which is primarily attributed by the growing demand for the luxury vehicles coupled with the shift of consumer preferences towards the technologically advanced safety, infotainment and entertainment features. Moreover, the consumers are largely attracted towards the good-looking vehicles. Thus, it has the capability to increase the automotive electronics products for luxury vehicles, thereby anticipating the market growth over the coming years.

Regional Analysis

North America is anticipated to dominate the global market over the projected period, owing to the presence of various established Original Equipment Manufacturers (OEM) in the U.S. such as General Motors, Ford Motor Company, Tesla and Fiat Chrysler Automobile among others. In further, the regional market growth will be attributed by the growth in the installation activities of various electronic products in the vehicles at the OEM level, due to the growing demand for safety modules.

The demand in the Asia Pacific region is largely fulfilled by China, India, and Japan. China is the world's largest manufacturing hub and one of the fastest-growing economies. The Chinese automotive manufacturers are leveraging favorable market conditions to take the lead and dominate the market. Moreover, the Make in India campaign is expected to draw investments in the automotive sector, thus boosting the demand for automotive electronics. Several government bodies across Asia Pacific and Europe are emphasizing on developing policies related to scrapping of old commercial vehicles in the region. The adoption of such favorable policies will help to decrease air pollution and increase the sales of light and heavy commercial vehicles in coming years, thus supporting the market growth.

Europe is predicted to have the second-highest market share over the projected time period, majorly due to the increasing automotive production in this region. Germany majorly contributes to the expanding automotive production in this region. According to OICA, the automotive production in Europe reached to 20.9 million vehicles in 2017, increasing from 20.1 million vehicles at a growth rate of nearly 4%.

Competitive Landscape

Leading players in the global automotive electronics market include Texas Instruments, Bosch Automotive, Infineon Technologies, Denso, Continental AG, Delphi Automotive, and Panasonic amongst several others.

The key players in the global market are investing hugely in the research & development of innovative electronic products to improve their share in the market. Moreover, they are planning to incorporate innovative technologies, which will help them to retain/improve their market position. For instance, in August 2018, Samsung Electronics announced its plans to invest US$ 22.35 billion in the development areas of Artificial Intelligence 5G, automotive electronic components, along with biopharmaceuticals.