UK: Modest rise seen in European commercial vehicle safety systems market
The total market for the European commercial vehicle safety systems will rise from an estimated EUR390.5m in 2004 to just over EUR406.2m in 2012 according to automotive industry consultants Frost & Sullivan.
Driven by the introduction of new active safety systems and their rising penetration into commercial vehicles, the future of the market will depend on the successful integration of various active and passive safety systems.
Active safety systems products are presently in the growth/product development phase, while products in the passive safety systems market are comparatively mature. In addition, the relative safety benefits achieved by introducing a new active safety feature are higher than that achieved by improving existing passive safety features.
Overall revenue growth will be powered by active safety systems. Comprising vehicle stability control (VSC) systems, driver warning and information systems (DWIS) and collision avoidance (CA) systems, revenues of the active safety systems market will grow steadily from an estimated EUR365.9m in 2004 to EUR382.2m in 2012.
VSC will retain its position as the principal revenue contributor to the active safety systems market, accounting for over 90% of revenues in 2012. With projected compound annual growth rates (CAGR) of 61.6 and 51.9% respectively over 2004-2012, the most dynamic segments will be that of the nascent DWIS and CA systems.
Although the active safety system market is currently dominated by pioneering suppliers, competition will intensify following the entry of numerous Tier One suppliers. Current participants include Knorr-Bremse, WABCO, TRW Automotive and, Iteris.
Valued at EUR24.6m in 2004, the total market for passive safety systems will decline marginally to EUR23.9m in 2012. Aggressive competition and the shift in production to low-cost countries have resulted in severe price attrition. While seatbelts have become commoditised, the lack of product differentiation has allowed vehicle manufacturers to source the most economical components.
Current efforts are focused towards refining the performance of existing seatbelts and airbag systems. However, with seatbelts having 100% market penetration, growth is likely only for driver airbags with volumes set to almost double over the period 2004 to 2012.
At present, suppliers in the European CV safety systems markets are concentrating on individual safety system solutions. However, the future of safety systems will hinge on greater systems integration. This will result in improvements in specific corrective/preventive functions, thereby promoting overall safety and the ultimate move towards autonomous driving.
"The integration of safety systems is a step towards autonomous safety system development," said Frost & Sullivan automotive analyst Karthikeyan Vijakakumar. "Integration benefits will go beyond the obvious improvement in safety. On a system level, the sharing of sensors and electronic control unit (ECU) will distribute the costs, and hence, reduce the cost of individual features."
VSC, CA and DWIS suppliers will work closely in the lead up to integrated safety devices. The first major step in the introduction of integrated safety systems will be the development of the emergency brake assistance system, which involves the integration of the braking system with the CA system and will likely be ready for production before the end of 2007.
Among vehicle manufacturers, Mercedes-Benz, MAN and Volvo Trucks will be at the forefront both in terms of introducing these features and in achieving the highest installation rates for them among their new commercial vehicles. Moreover, due to the widening installation of safety features in long-haulage trucks, above-16 tonnes trucks will have a higher safety system penetration.
Cost consciousness of fleet owners will compel suppliers to focus on developing cost competitive solutions. "This can be achieved through building competence through partnerships. For instance, chassis systems manufacturers can partner with collision avoidance suppliers and passive safety suppliers," added Vijayakumar. "Shifting to low-cost locations for manufacturing commoditised products can also aid in reducing manufacturing costs.
"Suppliers of growth phase products such as the VSC systems should focus on high-volume segment manufacturers, and suppliers of development phase products should focus on premium segment manufacturers," he said.