Automotive electronics market to exceed US$35.4 billion in 2007

Oxford, UK, September 2003

The world market for non-entertainment automotive electronics, excluding sensors and commercial vehicles, was estimated at US$26.9 billion in 2002 and is forecast to reach US$35.4 billion by 2007, according to the latest figures from Reed Electronics Research. Growth is forecast across all product segments and regions with the strongest demand coming from the emerging markets in Asia and East and Central Europe . 

Legislation – driven by environmental and safety issues – customer demand and benefits to the car manufacturer will continue to boost the market despite a slowdown in passenger car production in North America and Western Europe . The migration of electronics into the volume segments of the market will be the key driver for many automotive electronic systems although growth in value terms will be offset by severe pricing pressures. The period to 2007 will also see the emergence of new products and applications, such as advanced lighting and night vision, in the upper market segments although the delay in the introduction of 42 volt technology will push back the commercial introduction of number of systems. This will include by-wire, the technology seen by many as a key factor in enabling automakers to meet more stringent fuel economy/emission standards.

Powertrain electronics accounted for 34.8% of the global market in 2002 with this forecast to fall to just under 31% by 2007. The powertrain market will continue to face significant pricing pressure and in the major regions volume growth will be in-line with overall passenger car production. In contrast to North America and Japan , the European market will continue to be influenced by the move to diesel powered vehicles which are forecast to account for 50% of car production in 2007.

Body/chassis electronics will show an average growth of 11.7% per year between 2002 and 2007, with the world market increasing from US$2.7 billion to US$4.7 billion during the period.

Overall safety and convenience accounted for 47.3% of the global market in 2002 and this is forecast to reach 48.8% by 2007. Body controllers, multiplexing/electrical distribution and navigation will all show strong growth during the period. The market for navigation will continue to converge with audio and entertainment and combined will be one of the fastest growing segments of the automotive electronics market. The short-term opportunity for telematics appears to be receding with limited customer demand and a lack of a killer application to drive the market. As a result once optimistic revenue forecast have been scaled back with the expected surge in telematics subscribers being pushed back into the second half of the decade.

The market for electronics in automotive instrumentation is forecast to rise from US$2.1 billion in 2002 to US$2.5 billion by 2007. The market will continue to face severe pricing pressure throughout the forecast period although there will be a trend towards more advanced products as the demand for information and versatile displays increases.

As the major automakers boost production in the region the Rest of the World, as would be expected, will show the strongest growth increasing its share of the automotive electronics market to around 12% by 2007. The introduction of more stringent emission legislation and increasing consumer affluence will be a key factors driving growth within the region.

Reed Electronics Research (RER) specialises in providing international business information sources designed to assist senior management, marketing and business development personnel, industry watchers and analysts in keeping abreast of changes, developments and other factors affecting their business. RER is part of the global Reed Electronics Group a part Reed Business Information a leading provider of critical information and marketing solutions to business professionals and a member of Reed Elsevier.