Automotive Electronics Market Analysis Report By Component, By Application, By Sales Channel, By Region And Segment Forecasts From 2020 To 2027

Industry Insights

The global automotive electronics market size was worth USD 248.84 billion in 2019. It is projected that the market would witness a CAGR of 9.0% over the forecast duration, 2020 to 2027. The introduction of advanced solutions for safety like airbags, a warning system for lane departure, and an automatic emergency braking system are supplementing the growth of the market. In addition, increasing sales of hybrid and luxury vehicles are likely to spur market growth. The demand for vehicles integrated with the ADAS system has increased considerably over the past few years.

Electronic components have become an indispensable part of automotive vehicles. With the rise in sales of vehicles, the demand for electronic components has increased significantly. During the production stage of automotive vehicles, more than 90% of the electronic components are incorporated. In the recent past, automotive vehicles have registered considerable growth from emerging countries. The demand for automotive vehicles has been further bolstered due to the increasing share of mobility services.

An increase in the development of software-enabled systems is further predicted to drive market growth. The emergence of V2X technology has led to continuous up-gradation of the software system. The rising focus on developing energy storage technology coupled with growing investment in research and development activities is projected to surge the market growth.

In the recent past, there has been significant development in the integration of various technologies such as Augmented Reality, AI, and Machine Learning in automotive. In high-end vehicles such as BMW and others, augmentative reality dashboards have been incorporated. By 2020, it is estimated that nearly 70% of high-end luxury cars would be equipped with AR dashboards. Key players and automotive OEMs have increased their investments in the research and development of advanced AR dashboards systems.

The demand for hybrid vehicles has witnessed significant growth in the recent past. These vehicles are driven by more than one source of power. To ensure the smooth operation of such vehicles, they are equipped with several electronic control units. Similarly, electrical vehicles also deploy nearly 80 ECUs. Therefore, the rise in the adoption of hybrid and electric vehicles is likely to proliferate the market growth over the next seven years.

Component Insights

Depending on the component, the current-carrying devices held the largest share of more than 40% in 2019. The high cost of various components such as connectors, wiring harnesses, and others is attributing to the growth of this segment. In addition, increasing sales of light commercial vehicles in emerging countries has positively affected the growth of the automotive electronics market. Countries such as India and China have witnessed a rise in the adoption of such vehicles.

On the other hand, the sensors category is likely to witness over 10.0% CAGR from 2020 to 2027. With the increasing demand for luxury vehicles and comfort while driving, the demand for sensors has increased significantly in the past few years. In addition, government regulations to curb CO2 emission has led to a rise in demand for oxygen and IR sensors. Moreover, increasing the penetration of self-driving cars would supplement the sensor growth.

Application Insights

Based on the application, the safety systems held over 25% share in the market in 2019. Stringent government regulation to prevent road accidents coupled with increasing demand for Transportation Management Systems is likely to augment the segment growth. For example, the European Transport Safety Council (ETSC) has invested significantly in road safety with an aim to reduce the number of causality by half by the end of 2020. Such initiatives are projected to fuel segment growth.

On the other hand, the ADAS division is likely to register the highest CAGR with over 11% from 2020 to 2027. Increasing focus on the safety of drivers and vehicles is attributing to the growth of this segment. For example, New Car Assuagement Programs (NCAP) have mandated lane departure warning and automatic emergency braking systems use in China and Europe.

Sales Channel Insights

By the sales channel, the OEMs segment held the highest share in the market. Various OEMs are General Motors, Volkswagen AG, and BMW among others. The majority of electronic components are installed during the manufacturing stage of vehicles, which, is attributing to the highest share of OEMs. In addition, electronic components integrated by OEMs are durable, thereby, witnessing significant growth over the forecast duration.

On the other hand, the aftermarket segment is likely to grow at a moderate pace. The increasing intricacy of electronic components is responsible for the slow growth of this segment. To ensure the smooth installation of electronic components, most of them are installed during the production stage. In addition, the aftermarket is a secondary market focused on manufacturing, installation, retailing, and distribution of vehicles parts. Moreover, the increasing number of vehicle recalls has led to a better focus on quality checks, which, in turn, is hampering the growth of the aftermarket segment.

Regional Insights

In 2019, Asia Pacific accounted for USD 101.74 billion and emerged as the leading region in the market. China alone produced nearly 29% of the vehicles produced worldwide in the same year. The country sold 23.7 million passenger cars in 2018. Japan and China are the major consumers in the region. Further, increasing demand for India offers a lucrative opportunity for the market players in the next few years.

On the other hand, North America is anticipated to witness over 9% CAGR from 2020 to 2027 owing to the rising demand from the United States. In addition, the presence of leading manufacturers like ZF Friedrichshafen AG, Continental AG, Continental AG, and Autoliv, Inc. further contributes to regional growth. In terms of production, the United States alone accounts for more than 80% of the share in the region.

Impact of COVID-19

Automotive sales have been reduced significantly owing to the outbreak of COVID-19. As forecasted by global rating agency Moody, the sales of the automobile would reduce by 20% in 2020. These sales have been largely affected due to dismal economic growth. Leading countries such as the United States, Germany, France, U.K, and India have witnessed a significant reduction in their GDP. Owing to the low demand, which is affected by a weak supply chain, the production of automotive vehicles has reduced significantly. Low vehicles production has adversely affected the demand for the automotive electronics market.

However, China is estimated to witness significant demand for automotive vehicles. Several other countries have also started their economic activities, albeit slowly. The market is estimated to witness moderate growth over the next couple of years and it would pick pace thereafter.

Automotive Electronics Market Share Insights

The global market is moderately consolidated, despite the presence of a large number of manufacturers for different components such as sensors, ECUs, and wiring harnesses. Leading players such as Denso Corporation, Robert Bosch, Continental AG, and Aptiv PLC account for a significant share in the market. These players are known to offers a large volume of components with quality.

Some of the other key players operating in the market are Infineon Technologies, Microchip Technology, NXP Semiconductors, Valeo Inc., Broadcom Ltd, and Panasonic Corporation among others. Companies are emphasizing partnerships, acquisition, and strategic expansions to acquire a larger market share. For example, Continental AG acquired Kathrein Automotive in 2019 with an aim to strengthen its expertise in the connectivity domain.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels, and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For this study, Million Insights has segmented the global automotive electronics market based on component, application, sales channel, and region:

• Component Outlook (Revenue, USD Million, 2016 - 2027)
    • Electronic Control Unit
    • Sensors
    • Current-Carrying Devices
    • Others

• Application Outlook (Revenue, USD Million, 2016 - 2027)
    • ADAS
    • Infotainment
    • Body Electronics
    • Safety Systems
    • Powertrain Electronics

• Sales Channel Outlook (Revenue, USD Million, 2016 - 2027)
    • OEM
    • Aftermarket

• Regional Outlook (Revenue, USD Million, 2016 - 2027)
    • North America
        • The U.S.
        • Canada
    • Europe
        • Germany
        • The U.K.
    • the Asia Pacific
        • China
        • Japan
        • India
    • Latin America
        • Brazil
        • Mexico
    • Middle East & Africa