Integration of ADAS Leads to Automotive Electronics Market Expansion

Published Oct 19, 2022 

Anany Joshi
By Anany Joshi

18 Articles

Electronic systems integrated into vehicles, radio, telematics, in-car entertainment systems and other units are defined as automotive electronics. The increased sales of automobiles drive the automotive electronics market, supported by the favoring policies of governments in several countries for fuel-efficient and safe vehicles. The increased practice of retrofitting of new electronic systems in older vehicles concerning fuel emission norms and vehicle safety leads to market expansion.

Under the system segment, the driver assistance category is expected to witness the fastest growth in automotive electronics market in coming years, attributed to the surge in demand for driver assistance systems led by the increased traction of autonomous vehicles on the road. Driver assistance enhances the functioning of autonomous vehicles, more specifically, those equipped with level 5 autonomous features. The increased deployment of automotive vehicles worldwide is likely to penetrate the market.

APAC dominates the automotive electronics market, attributed to the increased manufacturing of the automobiles in China, India, Japan, and South Korea. It is due to the presence of economic labor and raw materials in the region. Numerous leading automobile companies are setting up their manufacturing units in regional countries, aiding the price decline of vehicles for the local population, resulting in a boost in sales. Moreover, the ambitions of regional governments to boost manufacturing in their respective countries bode well for the market.

The increasing trend of integrated cockpit systems incorporated in automobiles drives the automotive electronics market. The integrated cockpit facilitates the display of vehicle data through multiple screens providing more convenience to the driver. The leading automobile manufacturing companies such as Tata Motors, Toyota Motor Company and Bayerische Motoren Werke AG (BMW) have started incorporating integrated cockpits in their vehicles, considering the customer's preference.

Essentially, the increase in sales of automobiles is driving the automotive electronics market around the world. Automotive electronics capture around 35% of the cost of automobiles. It is expected to reach 50% by 2030. According to OICA, the sales of automobiles hit around 95.1 million units worldwide in 2018. Electric and autonomous vehicles are likely to witness an increase in sales in the coming years leading to market proliferation.

The market players are encountering partnerships to launch new products in the automotive electronics market. For instance, NTT Communications Corp., in collaboration with DENO CORP, announced testing of their vehicle security operation center in December 2019. It is built to study the security status of vehicles. Similarly, Mobileye NV, in partnership with Valeo, started creating a new safety standard for automotive vehicles based on the mathematical safety model of Mobileye in January 2019.

The integration of advanced driver assistance systems (ADAS) is likely to penetrate the global market, as it gives numerous opportunities to players in automotive electronics. The constant increase in road accidents fetches the attention toward the vehicle and passenger safety, thus driving the demand for ADAS. The integration of ADAS in automotive vehicles will reduce driver negligence and minimize the instances of road accidents. Tesla Inc. reported that the accident rate was four times lower than the average rate with ADAS integration in the U.S.

Thus, the integration of ADAS in automotive vehicles penetrates the market by ensuring vehicle and passenger safety and minimizing road accidents.