Global automotive electronics market is estimated to witness high growth, owing to increasing autonomous and electric vehicles adoption and growing demand for connected cars
Global Automotive Electronics Market is estimated to be valued at USD 254.76 Bn in 2024, exhibiting a CAGR of 8.3% over the forecast period (2024-2031). The market growth is driven by increasing adoption of autonomous and electric vehicles worldwide. Automakers are increasingly investing in improving driver assistance systems and developing self-driving technologies, and this boosts demand for automotive electronics. Furthermore, growing demand for connected vehicles equipped with advanced connectivity and infotainment systems can drive the market growth.
Market Dynamics:
Global automotive electronics market growth is driven by growing adoption of autonomous and electric vehicles. Automakers are extensively focusing on developing advanced driver-assistance systems (ADAS) along with necessary automotive electronic components such as sensors, electronic control units and cameras to achieve a higher level of autonomy. This can offer lucrative opportunities for automotive electronics manufacturers over the forecast period. Increasing connectivity in modern vehicles can also drive the market growth. Consumers demand advanced connectivity features to access internet, navigation, entertainment and other infotainment apps through their vehicles.
Growing Demand for Advanced Safety and Convenience Features
Global automotive electronics market growth is driven by rising demand for advanced safety and convenience features from consumers. Technologies like advanced driver assistance systems (ADAS), which include features like automatic emergency braking, blind spot monitoring, and lane departure warning, are becoming increasingly common. This helps to drive more electronic components and connectivity into vehicles. Consumers expect their vehicles to have these advanced safety features to avoid accidents and ensure passenger protection. Manufacturers are also incorporating more convenience features driven by electronic components like navigation systems, smartphone integration, and infotainment centers. This growing demand for enhanced safety and convenience boosts the need for automotive electronic parts and systems.
Transition Towards Electric and Autonomous Vehicles
Ongoing transition towards electric, hybrid, and autonomous vehicles can drive the market growth. Electronic components play a vital role in powering these new vehicle technologies. Electric vehicles require an extensive number of electronic parts and connectivity to power the battery, electric motor, and manage energy efficiency. Autonomous vehicles also rely heavily on electronic control units, sensors, cameras, and connectivity to perform complex driving tasks without human input. The transition away from conventional fuel-powered vehicles towards these advanced automotive technologies can offer growth opportunities for manufacturers of automotive electronic components and systems. As electric and driverless vehicles become more mainstream, it will lead to higher incorporation of electronics in automobiles.
High Research and Development Costs
Global automotive electronics market growth can be hampered by exorbitantly high research and development costs associated with new vehicle technologies. Developing advanced safety, infotainment, and autonomous driving electronic systems requires huge investments in R&D. Variable costs including employee salaries, prototype manufacturing, testing, and licensing also add to overall costs. The long gestation periods for new automotive technologies also mean longer wait times before cost recovery. These high sunk costs act as a restraint, particularly for smaller players. Larger established manufacturers have an advantage due to greater financial resources to fund heavy R&D activities. However, high costs still constrain greater innovation and commercialization of new electronic products in the industry.
Cybersecurity Vulnerabilities
Risk of cyberattacks and security vulnerabilities affecting networked vehicle electronic systems can hamper the market growth. As vehicles become more connected with the internet, Bluetooth, and wireless functionality, it increases the exposure to hacking and security breaches. Sensitive vehicle and passenger data could potentially be compromised if electronic networks are hacked. Issues like malware attacks, risks of disrupted driving functionality, or threaten passenger safety could erode consumer confidence in new automotive technologies relying on connectivity and electronics. Tighter regulations and compliance with cybersecurity standards are required to address these issues. However, complexity of securing automotive networks against constantly evolving cyber threats can pose challenge restraining broader adoption of connected vehicles.
Growth of Telematics and Connected Car Services
Rising connectivity of vehicles presents significant opportunities for telematics and development of new connected services. Telematics uses electronic hardware and software to transmit and receive data over telecommunications networks. It allows for features like remote diagnostics, crash notifications, stolen vehicle tracking, infotainment access, and sharing of real-time traffic and navigation data. Manufacturers are exploring new revenue models based on paid subscription services leveraging telematics. Growing market for connected services will catalyze greater use of telecommunications technologies in vehicles, thus, boosting demand for underlying electronic components. As more applications are developed, it can offer opportunities for expanded component requirements and recurring revenue streams.
Increasing Demand in Emerging Markets
Economies outside developed automotive industry strongholds like the U.S., Europe and Japan also offer major opportunities. Emerging markets with large populations like China and India are experiencing expanding middle-class consumer bases, thus, driving vehicle ownership rates. Their domestic automotive industries are also expanding production capacity. This rapid motorization of emerging economies will fuel the need for local manufacturing of automotive electronic systems as these work towards meeting local vehicle safety and emissions regulations. Foreign manufacturers are also targeting these growth markets through local partnerships. Rising automotive demand and industry development in emerging nations provides lucrative expansion prospects. It could potentially offset any future slowing growth rates in saturated mature automotive markets.
Link - https://www.coherentmarketinsights.com/market-insight/automotive-electronics-market-4525
Key Developments:
- In March 2023, Infineon Technologies AG, a global leader in automotive semiconductors, and Delta Electronics, Inc., a prominent power and energy management company, strengthened their partnership to accelerate joint innovation efforts. This partnership is poised to provide more efficient and higher-density solutions for the rapidly expanding electric vehicle (EV) market.
- In January 2023, ZF Friedrichshafen AG, a leading global supplier of automotive technology, announced the introduction of the Smart Camera 6, its next-generation camera designed for automated driving and safety systems. The Smart Camera 6 is intended to address the growing demand for 3D surround view and Interior Monitoring Systems by utilizing advanced Image Processing Module technology to enhance its functionality.
- In January 2023, Xilinx, Inc., a leader in adaptive computing solutions, partnered with Motovis, an embedded AI provider specializing in autonomous driving technology, to create a solution that integrates Motovis’ convolutional neural network (CNN) IP with Xilinx's Zynq system-on-chip (SoC) and Automotive (XA) platform. This collaboration aims to improve vehicle control and perception for forward camera systems in the automotive sector, offering customers robust platforms and facilitating rapid development.
- In October 2022, Hitachi Astemo, Ltd. introduced a prototype 360-degree stereo vision system intended for automated vehicles operating on public roads. This advanced system employs a multi-camera 3D sensing technique, integrating multiple cameras into a single in-vehicle unit to achieve high precision, cost-effectiveness, and superior resolution.
Key Player:
Analog Devices, Inc., Aptiv PLC, Autoliv Inc., Bosch (Robert Bosch GmbH), Continental AG, Delphi Technologies, Denso Corporation, Hitachi Automotive Systems, Ltd., Hyundai Mobis Co., Ltd., Infineon Technologies AG, Intel Corporation, Lear Corporation, NXP Semiconductors N.V., Panasonic Corporation, Texas Instruments Incorporated
