Automotive Electronics Market Size, Share & Industry Analysis, By Application Type (Advanced Driver Assistance System (ADAS), Body Electronics, Power Electronics, and Infotainment), By Vehicle Type (Passenger Car, Light Commercial Vehicle, Heavy Commercial Vehicle, and Electric Vehicle) and Regional Forecasts, 2019-2026

The global automotive electronics market size was USD 91.06 billion in 2018 and is projected to reach USD 144.19 billion by 2026, growing at a CAGR of 6.1% during the forecast period. The automotive manufacturing companies are working on the electronics sector by innovating and developing technologically advanced systems for enhanced safety, entertainment and comfort features in vehicles that are likely to transform the entire market in the coming years.

Automotive electronics has continued to be one of the most significant parts of the automotive industry ever since the commencement of motorized vehicles. From the conventional fuel vehicles to the complete electrification in vehicles such as an electric vehicle (EV) and automated vehicles (AV), there has been a massive transition in the automotive sector. Automotive electronics include various components such as ignition, engine management, telematics, radio, power windows, headlights and emergency systems, among others which directly or indirectly rely on the electronic systems in automobiles. The rapid adoption of the Internet of Things, Artificial Intelligence, and Cloud Computing in automobiles has led to an enhanced level of autonomy, quality of security, safety and in-vehicle infotainment.

MARKET TRENDS

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Increasing Automation and Digitalization Driven Design Technologies a Positive Trend for Market Growth

The automotive industry is shifting towards designing and developing innovative technologies to enable better driving assistance, advance vehicle safety, and improve in-vehicle user experience. There is a greater consumer demand towards incorporating advanced technological systems such as advanced driver assistance systems and infotainment in the automotive sector. The manufacturing companies are investing heavily in R&D for the development of technologically advanced automotive electronic systems. The market consists of multiple technological systems that are focused on improving and automating the vehicles for safe and better driving experience.

The Internet of Things (IoT) is playing a major role in the automation of vehicles. Autonomous driving technologies such as LiDAR, Radar, V2X Communication, and sensor fusion are drastically taking over traditional automotive technologies. The automotive sector is experiencing a widespread adoption of vehicle electrification and automation. Hence, increasing automation and use of digital solutions in the automotive industry which incorporate several electronics techniques, is subsequently leveraging the automotive electronics market.

MARKET DRIVERS

The surge in the Demand for Safety, Security and Comfort is Expected to Drive the automotive electronics market Growth

Globally, the increasing urbanization, improvement in the standard of living, and the rise in the disposable income of people is positively affecting the growth of the vehicles. The rising popularity of electric vehicles (EV) and automated vehicles (AV) is driving the market. With the growing population, issues such as traffic congestion and road accidents are subsequently increasing day by day thus giving rise to the safety security concerns among the customers as well as the manufacturers. Also, the rising trend towards comfort and luxury offered by high-performance vehicles is gaining traction among the consumers. The manufacturers are working on developing electric powertrains to boost the performance of the vehicles.

Park assist systems, automated cruise control, tire pressure system, automotive emergency braking, and airbags are some of the significant systems that are integrated not only in luxury cars but in entry-level and mid-sized cars too. For example, the Indian government has de-licensed the use of devices in the frequency bands of 36-38 MHz, 433-434.79 MHz, 76-77 GHz, and 302-351 kHz. De-licensing these low-frequency bands has enabled OEMs to use this frequency through the radar-based system and focus on the advancement of selective ADAS features. Furthermore, the government is taking initiatives to promote the use of zero-emission vehicles as well as mandatory norms for automotive manufacturers pertaining to the safety standards in vehicles. All these factors are creating an upsurge in the demand for electronics thus propelling the growth of the market.

Increasing Adoption of Electric Vehicles is Likely to Fuel the Growth of Market

Globally, the automotive industry is experiencing a rising inclination towards electric vehicles. The vehicular fuel emissions are leading to global warming. Vehicle electrification has driven innovation in the automotive electronics market. The electric vehicle sector has observed a rapid growth in the market owing to its various properties such as high battery life, increased range, energy efficiency, and developed electronic systems. Automotive manufacturing companies are investing massively to develop low-emission and high-performance electric vehicles. Moreover, the stringent government norms to curb fuel emission, enhance safety in vehicles and thus promote the use of electric vehicles are boosting the growth of electric vehicles worldwide. The trend for vehicle automation is also driving the market. The technologically advanced systems such as head-up display, park assist system, and infotainment are gaining a massive response from the people. The developing economies such as India, China and Japan account for a large share of prominent players that are leading the market.

MARKET RESTRAINT

Increasingly Complex Systems Coupled with High Cost of Electronics is Expected to Restrain the Growth of the Market

As the world is moving towards vehicle electrification, the high cost of production and the complex mechanism are likely to restrain the growth of the market. The automotive industry is experiencing rapid changes in its manufacturing facilities. The automotive sector is rapidly moving towards electrification in vehicles. Electric vehicles (EV) and automated vehicles (AV) are gaining popularity in the market across the globe. The technologically advanced systems such as advanced driver assistance systems (ADAS), infotainment and others are the fastest-growing systems in vehicles. These systems are driven by the Internet of Things and Artificial Intelligence. The manufacturing companies are investing a high percentage of funds in research to serve their customers with new technologies in vehicles. The high cost of lithium-ion batteries used in vehicles, complex software used and intensive capital investment required are ultimately increasing the manufacturing cost of vehicles. Moreover, the complex mechanism coupled with the lack of skilled laborers, as well as high replacement and maintenance costs of these systems is likely to hamper the growth of the market during the forecast period.

SEGMENTATION

By Application Type Analysis

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Power Electronics is Expected to Hold the Largest Market Share

Based on the application type, the market is segmented into the advanced driver assistance system (ADAS), body electronics, power electronics, and infotainment. The power electronics segment holds the largest share of the global market for automotive electronics and is expected to rise in the market during the forecast period. The power electronics consists of vital components such as engine, transmission, and drivetrain that assist the movement of the vehicle by supplying and controlling electric power. The automotive manufacturing companies are spending a high percentage on research to develop high power engines, technologically advanced safety and convenience features in vehicles. The growth in vehicle production is coupled with the surge in demand for power electronics. Moreover, the rapid adoption of electrification in the automotive industry is facilitating the power electronics segment to maintain its dominance for a long time.

The advanced driver assistance system (ADAS) is also showing significant growth in the automotive industry. The ADAS is designed to assist the driver by providing safety, comfort, efficiency while driving and also improves the driver, passenger, and pedestrian security and safety. ADAS has multiple vital components such as sensors, cameras, radars, and software that requires electricity to function precisely. Autonomous emergency braking, blind-spot detection, park assist, adaptive cruise control, and lane warning departure system are few of the many systems included in ADAS. These systems are driven by the Internet of Things and Artificial Intelligence. The increasing inclination of people towards enhanced safety, security, luxury and high performance of vehicles is creating a surge in the demand for ADAS in vehicles.

The infotainment system is also expected to exhibit steady growth in the market. The infotainment system is a mixture of car systems that are used to offer information and entertainment to the driver and the passenger by video or audio interfaces control elements such as, button panel, touch screen displays, voice commands, among others. The infotainment system enables connecting to the personal navigation systems and smartphones. The smartphone connectivity system links the product life cycle gap among vehicle infotainment systems and smartphones. The infotainment system is mostly used in high-performance vehicles. The increasing demand for luxury and high-performance cars will generate necessity for infotainment systems in vehicles thereby leading to the growth of the market during the forecast period.

By Vehicle Type Analysis

Passenger Cars is Expected to Hold the Largest Market Share

In terms of vehicle type, the market is segmented into passenger cars, light commercial vehicles (LCV), heavy commercial vehicles (HCV), and electric vehicles (EV). The passenger car segment holds the largest market share of automotive electronics owing to the higher sales and production of passenger cars across the globe. The rapid adoption of advanced technologies such as driver assistance systems and infotainment by automotive manufacturers is fuelling the growth of the market. Moreover, the stringent government norms related to fuel efficiency, and the safety of drivers as well as passengers are also leveraging the market growth.

The electric vehicle (EV) segment is exhibiting exponential growth in the market. Increasing fuel emission levels and the rise in the carbon footprints are compelling the automotive manufacturers to shift towards electric vehicles from conventional fuel vehicles. This factor is expected to show significant growth in the market.

The light commercial vehicle is also showing steady growth in this market owing to the increasing demand for safety features, greater comfort, and driver assistance for convenience in driving. Some of the prominent commercial vehicle manufacturing companies are also working towards developing technologically advanced systems for high performance and enhanced comfort.

REGIONAL ANALYSIS

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Asia Pacific holds the largest share of the global automotive electronics industry owing to the high sales volume of automobiles in the region. Developing economies such as India, China, and Japan comprises a significant number of electronics and automotive manufacturers. The automotive manufacturing companies are planning to increase their production volume by adopting advanced technologies in manufacturing facilities in this region.

Moreover, the New Energy Vehicle (NEV) mandate initiated by the Ministry of China in 2017, is projected to upsurge the production and demand for electric vehicles (EV) and autonomous vehicles (AV) in this country which will further create opportunities for vehicle manufacturers to implement advanced technological devices and components in the automotive industry. Therefore the increasing production volume and rapid adoption of technologically advanced manufacturing facilities are propelling the growth of the market in this region.

Europe is also showing exponential growth in the market owing to the increasing awareness for safety and security in vehicles as well as the occupants. The presence of prominent automotive manufacturing companies such as Volkswagen, Skoda, Audi, BMW, Daimler, among others are leveraging in this region. Moreover, the European Government has imposed various regulations to curb vehicular accidents, and ensure safety features in every vehicle owing to which the ADAS market is gaining high popularity in this region. All these factors are ultimately propelling the growth of this market.

KEY INDUSTRY PLAYERS

Robert Bosch GmbH maintains its leading position in this global market.  A wide range of smart assistance solutions developed essentially for urban traffic and also the constant R&D efforts by component manufacturers leading to technological advancements, are some of the prominent factors responsible for the dominance of the company. Increasing cost pressure on the OEMs is compelling them to increase the localization content in vehicles. OEMs are focusing on procuring components from domestic suppliers, particularly in countries such as India and Japan, to avoid high import duties, and reduce logistics costs at the same time.

OEM efforts to work with suppliers to develop auto electronics solutions as well as improve system-level understanding have subsequently increased. Furthermore, Continental AG and ZF Friedrichshafen have maintained their positions in the competitive landscape with Continental AG particularly driving the adoption of advanced solutions. This is projected to certainly influence the global market as these companies are anticipated to drive market innovation during the forecast period.

LIST OF KEY PLAYERS PROFILED:

• Continental AG


• Robert Bosch GmbH


• Sony Corporation


• Aptiv


• Hyundai Mobis


• ZF Friedrichshafen AG


• Autoliv Inc.


• Magna International Inc.


• Aisin Seiki Co. Ltd


• Philips N.V.


• Infineon Technologies AG


• NVIDIA Corporation


• Valeo SA

KEY INDUSTRY DEVELOPMENTS

• In July 2021, Magna International Inc. and Veoneer announced that they had entered a merger agreement under which Magna will acquire Veoneer. The company will be combined with Magna’s ADAS business and its electronics operating units.


• In July 2021, Renesas Electronics Corp, a premier supplier of advanced electronic and semiconductor solutions, revealed its decision to consolidate the Yamaguchi Factory of its wholly-owned subsidiary, Renesas Semiconductor Manufacturing CO., Ltd., at the end of June 2022.


• In July 2021, Bosch Engineering has designed a high-voltage Lab Rig (HVLR), which can be utilized to test the power electronics of electric automotive efficiently. The test can be carried out in a high voltage lab instead of on the bench; this is further expected to reduce development cost and time.


• In July 2021, HORIBA Europe announced the acquisition of BeXema GmbH for power electronics. Through this acquisition, the company incorporates the technologies of the electric power field into the group’s internal supply chain.

REPORT COVERAGE

The automotive electronics market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the automotive electronics market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.

An Infographic Representation of Automotive Electronics Market

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