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The market dynamics of the automotive electronics sector are undergoing a transformative journey driven by technological advancements, safety imperatives, and the global shift toward electric and autonomous vehicles. The automotive industry's increasing reliance on electronic components for enhanced vehicle performance, safety features, and connectivity has propelled the demand for automotive electronics. One significant driver is the growing emphasis on vehicle electrification, with the automotive sector witnessing a surge in the adoption of electric and hybrid vehicles. The shift toward electric powertrains necessitates sophisticated electronic systems to manage battery performance, energy distribution, and overall vehicle efficiency.
Safety mandates and consumer preferences for advanced safety features have also played a crucial role in shaping the automotive electronics market dynamics. Advanced driver assistance systems (ADAS), collision avoidance technologies, and autonomous driving capabilities rely heavily on electronic components such as sensors, cameras, and control units. Governments worldwide are implementing stringent safety regulations, compelling automakers to integrate cutting-edge electronic systems into their vehicles to meet compliance standards and enhance overall safety.
Connectivity features have become integral to modern vehicles, contributing significantly to the dynamics of the automotive electronics market. Consumers increasingly demand seamless integration of smartphones, in-car infotainment systems, and advanced communication technologies. This has led to a surge in the incorporation of advanced connectivity solutions, including telematics, vehicle-to-everything (V2X) communication, and in-car entertainment systems. The race to develop vehicles with robust connectivity features has intensified competition among automotive electronics manufacturers.
Furthermore, the rise of autonomous vehicles has ushered in a new era of automotive electronics market dynamics. The development and deployment of self-driving cars rely on a sophisticated network of sensors, radar systems, LiDAR, and powerful processing units. As autonomous technology progresses, the demand for high-performance electronic components capable of handling complex decision-making processes continues to grow. The automotive industry's pursuit of full autonomy is shaping the market dynamics, fostering collaborations between traditional automakers and technology companies to accelerate innovation in automotive electronics.
Global environmental concerns and regulatory initiatives aimed at reducing carbon emissions have fueled the market dynamics of automotive electronics in the realm of electric vehicles (EVs). The increasing adoption of electric powertrains requires advanced battery management systems, electric propulsion systems, and charging infrastructure, all heavily reliant on electronic components. As governments worldwide push for a greener automotive future, the demand for automotive electronics in the electric vehicle segment is expected to witness substantial growth.
The competitive landscape within the automotive electronics market is characterized by a mix of established players and new entrants, with traditional automotive suppliers collaborating with technology companies to create comprehensive solutions. The complexity of automotive electronics has led to a rise in strategic partnerships, mergers, and acquisitions, as companies seek to strengthen their expertise and expand their product portfolios.
Economic factors, such as global economic growth, consumer spending, and the overall health of the automotive industry, also influence market dynamics. Economic downturns can lead to a temporary reduction in vehicle production, impacting the demand for automotive electronics. Conversely, periods of economic recovery and increased consumer confidence tend to drive higher demand for technologically advanced vehicles, subsequently boosting the market for automotive electronics.
the market dynamics of automotive electronics are shaped by the interplay of technological innovation, safety imperatives, connectivity trends, and the transformative shift toward electric and autonomous vehicles. As the automotive industry continues to evolve, manufacturers in the automotive electronics sector must navigate these dynamics, anticipating and adapting to the changing landscape to remain competitive in a rapidly advancing and highly competitive market.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Segment Outlook | Product Type, Operating Platforms, and Region |
Automotive Electronics Market Highlights:
Automotive Electronics Market Overview:
Automotive Electronics Market Size was valued at USD 270.96 billion in 2023. The Automotive Electronics industry is projected to grow from USD 290.55 Billion in 2024 to USD 507.86 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 7.22% during the forecast period (2024–2030). Active safety system demand and demand for cutting-edge infotainment systems are increasing and are the key market drivers enhancing the Automotive Electronics market growth.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Automotive Electronics Market Trends
Growing Adoption of Automotive and Electric Vehicles is Predicted to Support Market Growth
The ACES trends—autonomous driving, connected cars, electrification of the powertrain, and shared mobility—are advancements in the automobile industry that reinforce one another. They are all impacting and destabilizing the automotive value chain as a whole. Additionally, they are important contributors to the automotive software and electrical and auto electronic components (E/E) market, which is anticipated to increase from $238 billion to $469 billion between 2020 and 2030. The whole automotive industry is predicted to increase at a compound rate of 3% over the same period, significantly outpacing software and E/E sector growth at this rate. As a result, most automotive businesses and their executives now concentrate on software and electronics.
To provide energy storage technology and high-performance electronics at a competitive price, the automotive industry invests significant money in research and development. Additionally, OEMs rely increasingly on electronics to ensure high safety. In 2020, almost 35% of the cost of a car was made up of electronic components. However, given technological advancements, it is anticipated that by 2030, auto electronic components will make up around 50% of the cost of a car.
As per market dynamics, the need for Auto electronics components is anticipated to increase as hybrid electric vehicles (HEV) and electric vehicles (EV) become more widely used. Additionally, replacing mechanical parts with electronic parts, such as using electronic switches rather than relays, is another way that electronics may meet the diverse demands of the automobile industry while boosting dependability and lightning wire harnesses. According to market forecast, it is also anticipated that government laws to reduce traffic accidents and technological improvements connected to in-vehicle safety would increase demand.
The need for in-vehicle data storage to enable sophisticated features is driven by the expanding demand for in-car entertainment systems due to their enhanced comfort, efficiency, and convenience. This is one of the key factors influencing the market for in-car infotainment applications.
Automotive Electronics Market Segment Insights:
Automotive Electronics Type Insights
Based on type, the Automotive Electronics Market segmentation includes ADAS, Body Electronics, Entertainment, Powertrain, Safety Systems, and Others. In 2021, the safety systems sector held the biggest market share, at around 29%. Airbags, tire pressure monitoring systems, keyless entry, electronic brake distribution, electronic stability control, electric power steering, and suspension control are just a few of the parts that make up safety systems. Growing consumer awareness of technology advancements affecting automobile safety equipment is anticipated to be a significant development factor for the safety systems market. Therefore such factors will boost the Automotive Electronics market growth.
Automotive Electronics Sales Insights
Based on sales, the Automotive Electronics Market segmentation includes OEM and aftermarket. In 2021, the OEM category held the greatest share, with over 68%. Due to the improved durability and shelf-life of electronic components, the OEM segment dominated the automotive electronics market in 2020. Since they are an essential element of automobiles, people prefer to purchase auto electronic components from OEMs to get authentic parts. In addition, a reduced revenue share for aftermarket electronic components is anticipated throughout the projected period due to the rise in design complexity of these auto electronic components.
Figure 2: Automotive Electronics Market, by Sales, 2021 & 2030 (USD Million)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Automotive Electronics Application Insights
Based on application, the Automotive Electronics Market data includes PV, LCV, HCV, EV, and 2-wheeler. Due to increased passenger vehicle sales and production worldwide, the passenger car sector currently accounts for the biggest market share for auto electrical connectors. The industry is expanding because of automakers' quick adoption of cutting-edge technology like infotainment and driver assistance systems. Furthermore, the government's strict regulations on fuel economy and the safety of both drivers and passengers are boosting market development. The market for electric vehicles (EVs) is expanding exponentially. Automakers are being forced to switch from making conventional gasoline vehicles to electric ones due to rising fuel pollution levels and carbon footprints. This aspect is anticipated to have rapid market expansion.
Automotive Electronics Regional Insights
By Region, the study provides market insights into North America, Europe, Asia-Pacific and the Rest of the World. The North America Automotive Electronics market accounted for USD 103.81 billion in 2021 and is expected to exhibit a significant CAGR growth during the study period. To provide energy storage technology and high-performance electronics at a competitive price, the automotive industry invests significant money in research and development. Additionally, OEMs depend increasingly on electronics to ensure high safety.
Further, the major countries studied in the market report are The U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 3: Automotive Electronics Market Share By Region 2021 (%)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
The Asia Pacific Automotive Electronics market region had the biggest increase. Due to the thriving electronic component manufacturing operations, nations including Taiwan, South Korea, Malaysia, and Thailand have considerably contributed to the auto electrical connectors industry expansion. China and Japan supply most of the auto electronics needed in the Asia-Pacific region. However, the small number of Vehicle electronics producers presents a fantastic business opportunity for regional suppliers to take advantage of the domestic demand, making the remainder of Asia Pacific a desirable investment location. Further, the China Automotive Electronics market held the largest market share, and the India Automotive Electronics market was the fastest-growing market in the Region.
The European Automotive Electronics market region had the substantial increase. Due to the growing concern for passengers' and cars' safety and security, Europe is likewise seeing exponential market expansion. The presence of well-known automakers like Volkswagen, Skoda, Audi, BMW, and Daimler, among others, is advantageous in this area. Additionally, the European Union has implemented several rules to reduce traffic accidents and mandate safety features in all automobiles, which has helped the ADAS business flourish in this Region. All of these causes are fueling the expansion of the Automotive Electronics market. Further, the Germany Automotive Electronics market held the largest market share, and the UK Automotive Electronics market was the fastest-growing market in the European Region.
Automotive Electronics Key Market Players & Competitive Insights
Major market players are investing a lot of money in R&D to expand their product portfolios, which will spur further market growth for automobile electronics. With significant industry changes, including new product releases, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations, market participants are also undertaking various strategic activities to expand their global presence. According to market competitive landscape, players in the Automotive Electronics industry must provide affordable products To grow and remain in a market that is becoming increasingly competitive.
Manufacturing locally to cut operational costs is one of the main business tactics the Automotive Electronics industry uses to serve customers and increase the market sector. The Automotive Electronics industry has recently given medicine some of the most important advantages. The Electronics market major players such as Robert Bosch GmbH (Germany), OMRON Corporation (Japan), Infineon Technologies AG (Germany), HGM Automotive Electronics (US), Hitachi Ltd. (Japan), Delta Electronics Inc. (Taiwan), Atotech (Germany), ZF Friedrichshafen AG (US), Denso Corporation (Japan), Koninklijke Philips N.V. (Netherlands), and others are working on expanding the market demand by investing in research and development activities.
A Canadian company called Magna International Inc. produces vehicle parts. It was listed on the 2020 Forbes Global 2000 and is one of Canada's biggest corporations. Veoneer and Magna International Inc. announced their merger agreement in July 2021, under which Magna would acquire Veoneer. The firm will be merged with Magna's electronics and ADAS business segments.
Bosch Engineering creates electronic solutions for automotive and non-automotive applications that enable effective, secure, and connected mobility. Bosch Engineering created a high-voltage lab rig (HVLR) in July 2021 that can be used to test electric vehicles' power electronics effectively. Instead of on a bench, the test may be performed in a high-voltage lab, intended to save development costs and speed up the process.
List of the Key Companies in the Automotive Electronics market include
- Robert Bosch GmbH (Germany)
- OMRON Corporation (Japan)
- Infineon Technologies AG (Germany)
- HGM Automotive Electronics (US.)
- Hitachi Ltd. (Japan)
- Delta Electronics Inc. (Taiwan)
- Atotech (Germany)
- ZF Friedrichshafen AG (U.S.)
- Denso Corporation (Japan)
- Koninklijke Philips N.V. (Netherlands)
Automotive Electronics Industry Developments
24.06.2024 : The new term for the trend in the automotive industry is "software-defined vehicle." The foundation for creating and developing new car models is increasingly becoming software. By 2030, the global market for automotive electronics and software is expected to grow to 462 billion dollars, according to a recent McKinsey study. In 2023, the percentage of software in automobiles will triple.
Bosch aspires to be a part of this expanding industry and will continue to be the preferred partner for automakers globally. Heyn declared, "We are at the beginning of the era of the software-defined vehicle." It is good news for Bosch because we can handle both software and hardware. Among the few businesses that truly understand how automotive electronics and the cloud interact is us." Bosch, for instance, assists fleet operators in reducing vehicle breakdowns and boosting productivity through software and service solutions like Vehicle Health.
Vehicle Electronics Market Segmentation:
Vehicle Electronics Type Outlook
- Advanced driver assistance systems
- Body Electronics
- Entertainment
- Powertrain
- Safety Systems
- Others
Vehicle Electronics Sales Outlook
- OEM
- Aftermarket
Vehicle Electronics Application Outlook
- Passenger cars
- Light commercial vehicle
- Heavy commercial vehicle
- Electric vehicle
- Two-wheeler
Vehicle Electronics Regional Outlook
North America
- US
- Canada
Europe
- Germany
- France
- UK
- Italy
- Spain
- Rest of Europe
Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Australia
- Rest of Asia-Pacific
Rest of the World
-
Middle East
-
Africa
-
Latin America
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