With the burgeoning sales of automobiles all over the world, the demand for automotive electronics is soaring rapidly. According to the estimates of the Organisation Internationale des Constructeurs d'Automobiles (OICA), 95.1 million automobile sales were sold around the world in 2018. Automotive sales increased at a CAGR of 1.8% from 2014 to 2018. Moreover, due to the surging sales of vehicles, the automotive electronics industry is witnessing a sharp growth across the globe.
This is because automotive electronics contribute nearly 35% of the total cost of an average vehicle these days, compared to the only 5% share in 1970. This share is expected to rise further in the coming years, with industry experts predicting automotive electronics to account for 50% of the total cost of a vehicle in 2030. Besides this, the rising implementation of stringent governments regulations in several countries for improving vehicular safety is also boosting the demand for automotive electronics.
As per the 2019 Q4 report of Tesla Inc., the integration of advanced driver assistance systems (ADASs) in its vehicles reduced the rate of accident by as much as four times than the average rate recorded in the U.S. The adoption of these advanced safety systems and features in vehicles is heavily pushing up the requirement for automotive electronics. This is because automotive electronics are the primary components used in these safety systems.
Because of the aforementioned factors, the sales of automotive electronics are ballooning throughout the world. As a result, the valuation of the global automotive electronics market is predicted to grow from $235.7 billion to $615.3 billion from 2019 to 2030. Furthermore, the market is predicted to exhibit a CAGR of 9.3% between 2020 and 2030. Current carrying device, electronic control unit (ECU), and sensor are the main components used in automotive electronics.
Out of these, the demand for the current carrying device is predicted to be the highest in the coming years. According to the estimates of P&S Intelligence, a market research firm based in India, the sales of sensors would also rise rapidly in the forthcoming years, on account of the swift adoption of position and temperature sensors in automobiles around the world. Moreover, position sensors are critical components used in clutch plates, steering, hybrid engines, and pedals.
Globally, the automotive electronics market is predicted to register the highest and the fastest growth in the Asia-Pacific (APAC) region in the upcoming years. This would be a result of the booming sales of automobiles in the regional countries such as China, India, Indonesia, and South Korea. In addition to this, the setting up of manufacturing plants of several renowned global automobile manufacturing companies in the regional countries is also fueling the market advancement in the region.
Hence, it can be said without any hesitation that the sales of automotive electronics would shoot-up all over the world in the coming years, primarily because of the mushrooming sales of automobiles and the rising integration of advanced safety systems and features in vehicles around the world.