Despite extended operational
life for most major car components, prospects indicate that the overall demand
is set to rise to 2005, according to a new 600-page study of the world automotive
components market published by the Economist Intelligence Unit (EIU). The EIU
also forecasts strong demand through 2005 for adaptive cruise control (using
radar and sensors), keyless entry systems, air conditioning, cabin filters,
fuel filters, entertainment systems, seat comfort features, electronic braking
systems, and automatic transmissions.
This will be driven by a number of factors, including:
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- Higher replacement demand
reflecting the 10% increase in global vehicles in use – from 525m cars in
1999 to 578m by 2005. - Growth in world car
output of 15% over the same period to 40m which will support OE demand. - More extensive roadworthiness
tests including regular emissions testing. - A progressive upgrading
of standard vehicle specifications to include items such as satellite navigation
systems, side airbags, electronic stability programmes, and high intensity
discharge headlamps.
Worldwide unit sales
of selected automotive components for passenger car applications(a), 1994, 1999
and 2005 (m units)
|
1994
|
1999
|
2005
|
2005/1994(%change)
|
|
|
Airbags
|
||||
|
Driver
b |
11.2
|
27.3
|
28.7
|
156
|
|
Front
passenger b |
4.2
|
22.3
|
27.1
|
545
|
|
Front
side b |
0.0
|
14.7
|
39.5
|
–
|
|
Air
conditioning systems |
14.6
|
21.0
|
28.5
|
95
|
|
Alternators
|
95.0
|
103.0
|
115.2
|
21
|
|
Transmissions
|
||||
|
Automatic
|
15.1
|
17.2
|
20.3
|
34
|
|
CVT
|
0.0
|
0.7
|
2.4
|
–
|
|
Manual
|
16.7
|
17.2
|
19.3
|
16
|
|
Batteries
|
129.7
|
140.9
|
157.6
|
21
|
|
Brakes
|
||||
|
Disc
|
86.3
|
94.5
|
112.2
|
30
|
|
Drum
|
47.0
|
42.7
|
44.4
|
-5
|
|
Clutches
|
50.6
|
49.0
|
50.0
|
-1
|
|
Electric
motors (OE only) |
2,007.3
|
3,098.1
|
6,350.2
|
216
|
|
Exhaust
systems |
147.7
|
147.2
|
149.8
|
1
|
|
Filters
|
||||
|
Air
|
275.0
|
289.0
|
304.1
|
10
|
|
Oil
|
446.5
|
420.6
|
407.7
|
-10
|
|
HID
headlamps |
0.0
|
2.7
|
10.0
|
–
|
|
Vehicle
navigation (OE)bsystems(OE)b |
0.0
|
2.1
|
5.6
|
–
|
|
Radiators
|
47.4
|
41.1
|
42.5
|
-10
|
|
Seatbelts
|
167.0
|
172.2
|
198.3
|
19
|
|
Shock
absorbers |
222.5
|
234.4
|
253.5
|
14
|
|
Sparking
plugs |
1,261.7
|
1,052.1
|
845.5
|
-33
|
|
Starter
motors |
101.6
|
110.4
|
123.1
|
21
|
|
Tyres
|
668.2
|
708.9
|
779.8
|
17
|
|
Wiper
blades |
348.8
|
378.3
|
415.9
|
19
|
(a)Combined OE and aftermarket.
(b)Combined Western Europe, Japan and North American markets only. Sources:
EIU;industry estimates and forecasts.
Future growth in air conditioning
assured. The global OE market for air conditioning systems is unusual in that
in certain geographical areas the market is very mature, while in others it
is still growing strongly and will take some years before a saturation penetration
level is reached.
Air conditioning systems
in North America and Japan are almost commodity items whereas in Europe they
are still seen as a luxury option which can be used as a selling and marketing
feature to help gain competitive advantage over competitors. It is clear that
growth prospects in Europe, and to a lesser extent parts of South-east Asia
and South America, offer suppliers the greatest potential in the early years
of this century.
Once these markets reach
saturation point, the emphasis will inevitably switch to focus on increased
efficiency, lower cost and more integrated packaging of systems/modules. The
Economist Intelligence Unit forecasts that the global OE volume for air conditioning
units will rise by about 36% between 1999 and 2005.
Cheaper integrated navigation
systems with more computing power lead the way forward. Navigation systems,
especially in Japan and western Europe, are already becoming commonplace on
cars of all sizes and model ranges, but they are just the tip of the iceberg.
As prices fall, an increasing number of functional features are being added
onto a computing platform.
Citroën was the world’s
first carmaker to factory-install a multimedia computer running on the Windows
CE operating system. These early advances are inextricably linked to the field
of “intelligent” transport including on-board collision warning, “mayday”
alert and electronic toll collection which are all just around the corner. As
demand for in-car navigation soars, more alliances between the manufacturers
and service providers will inevitably follow.
The EIU expects that around
1.7m new passenger cars with navigation units will be sold in Japan this year,
ie one in three cars. This will climb to 2.4m by 2005, ie over half of all new
cars will offer route guidance, at least. In western Europe, we estimate that
about 1m new passenger cars will feature a navigation system, rising to 2.2m
by 2005. In the US the development of the in-car navigation market has been
slower than Europe and Japan, but it is expected to follow suit within the next
few years. Around 100,000 systems were sold in the US during 1999 with potential
to reach 1m units by 2005. Car hire firms are amongst those currently boosting
demand.
Global side airbag market
set to inflate. The EIU estimates that the global market for occupant restraint
systems is currently worth $12bn a year and is set to grow by 5.5% a year in
value terms. As penetration levels of frontal airbags increases, this is likely
to be reinforced by strong growth in the side impact airbag market.
The EIU estimates that front
side airbags could be fitted on around half of all new vehicles registered in
western Europe by 2000 rising to 90% by 2005. In Japan side airbag fitment will
soar from around 40% penetration today to around 60% within five years. In North
America, front side airbags could feature on around 60% of new cars in 2005, up
from 25% fitment this year.
The EIU also anticipates
that around one-quarter of all new cars built for North American roads will
be equipped with curtain airbags by 2005, up from virtually none in 1999. Although
the prospects look good for the major suppliers, the rapid unit growth will
be partly offset by strong pricing pressure.
Majority of new cars soon
fitted with automatic transmissions. The EIU forecasts that by 2005 the provision
of OE automatic systems for passenger car applications will rise to 20.3m units
per year compared with 19.3m manual systems, with a change in policy to more
outsourcing. Western Europe is set to see a significant increase in its use
of automatic gearboxes from 1.90m units in 1997 to 3.13m units by 2005.
The increasing adoption of
automatic transmissions by European drivers is largely due to new versions such
as continuously variable transmission. (CVT) and robotized manual gearboxes known
as automated manual transmissions (AMT). These new units are compatible with rear,
front and all-wheel drive cars. Worsening traffic conditions are another reason
for this growth. The EIU forecasts that CVT fitment worldwide will rise from around
2% (or 680,000 cars produced) in 1999 to 6% (2.4m cars) by 2005.
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