The ballooning sales of automobiles are massively pushing up the demand for automotive electronics across the world. In an average vehicle, automotive electronics account for nearly 35% of the total cost of the automobile now, as compared to the 5% cost these systems accounted for in 1970. According to industry experts, this share would rise to 50% by 2030. As per the estimates of the Organisation Internationale des Constructeurs d'Automobiles (OICA), 95.1 million automobiles were sold in 2018.
Moreover, automobile sales registered a growth rate of 1.8% CAGR between 2014 and 2018. Due to the sharp surge in the sales of automobiles, especially electric and autonomous vehicles, the requirement for automotive electronics would skyrocket in the coming years. Besides these factors, the increasing incorporation of advanced driver assistance systems (ADAS) in automobiles, on account of the rising requirement for enhanced passenger safety, is also offering lucrative growth opportunities to the players operating in the automotive electronics industry.
Most of the road accidents are caused because of driver negligence and therefore, the adoption of ADAS massively reduces the prevalence of road crashes across the globe. According to the 2019 Q4 report published by Tesla Inc., the rate of accidents of its automobiles was four times lower than the average reported in the U.S., because of the integration of ADAS in its vehicles. Additionally, the growing enactment of strict vehicular safety regulations is propelling the demand for automotive electronics.
Due to the above-mentioned factors, the sales of automotive electronics are growing rapidly all over the world. This is, in turn, driving the progress of the global automotive electronics market. According to the forecast of P&S Intelligence, a market research company based in India, the valuation of the market would increase from $235.7 billion in 2019 to $615.3 billion by 2030. Furthermore, the market is predicted to demonstrate a CAGR of 9.3% from 2020 to 2030.
Current carrying devices, sensors, and electronic control units (ECUs) are the most widely used components in automotive electronics systems. Amongst these, the demand for the current carrying devices is predicted to rise sharply throughout the world in the forthcoming years. Moreover, the sales of sensors would also grow rapidly in the future years, on account of the rapid incorporation of position and temperature sensors in automobiles. Position sensors are extremely important components of clutch plates, hybrid engines, pedals, and steering.
