World OEM Automotive Electronics Demand to Reach $177 Billion in 2014

In a rebound from depressed 2009 levels, global demand for light vehicle original equipment manufacturer (OEM) automotive electronics will advance 12.4 percent annually to $177 billion in 2014.  Beyond the expected recovery from the 2009 recession, automotive electronics demand will be boosted by increasing regulatory pressure and the continued search among automakers for cost-effective ways to differentiate their products -- a role electronic systems ably fill.  These and other trends, including market share and product segmentation, are presented in World OEM Automotive Electronics, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

The 2009 recession caused developed and emerging automotive markets to take significantly different paths, with the former suffering from massive sales drop-offs while the latter moved forward strongly after a mild downturn.  Light vehicle sales in the key developed markets of the US, Western Europe and Japan fell significantly from 2004 to 2009, while emerging markets Brazil, China, and India grew strongly during the same period.  While the faster-growing emerging markets will likely set the global pace for automotive electronics demand going forward, they do not produce the same per-vehicle electronics revenues because many of the technologies they use have already been commoditized in terms of price. 

Safety and security electronics will register a strong increase in demand through 2014, as more advanced safety features percolate down into mass market vehicles.  Powertrain and emissions electronics will also post solid gains, driven by stringent new fuel economy and emissions standards in developed markets, particularly the US and Western Europe.  Growing from a small base, communication and navigation electronics will record the most rapid sales increases as more OEMs integrate these handy technologies into their vehicles.  Instrumentation and comfort, convenience and entertainment electronics will have lower but still attractive growth rates as more emerging market players install these features in their vehicles to meet customer demand.  In developed automotive markets, the coming decade is rapidly shaping up to be one focused on expanding the driver’s capabilities to react to events or to see further and anticipate more fully any potential challenge ahead on the roadway, and electronics technologies are slated to play major roles.  However, in the medium term, a new focus on frugality in these markets could reduce interest in the latest electronics applications. 

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.