Given that a driver typically looks in the rearview mirror once every 15 seconds, small wonder that mirror makers are proclaiming this as the ‘ideal location’ to display a variety of information. Matthew Beecham reports on how the humble rearview mirror has become a hotbed of high-tech wizardry and talks with Garth Deur, executive vice president for Gentex, about the prospects for auto-dimming mirrors.
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Compasses, temperature displays, remote keyless entry receivers, trip function displays, telematics capabilities and microphones are all typical of the added-value functions found in today’s interior rearview mirrors. Tomorrow’s mirrors could display all sorts of other information such as phone numbers, turn-by-turn navigational directions, radio volume and tyre pressure.
Rain repellent mirror glass, power-folding and extending mirrors are all gaining ground in the wing mirror department. Although coated glass has been around in Japan for the past 20 years, its application in Europe and North America has so far been limited. While power-folding mirrors have long since featured on luxury passenger cars, they are gradually being fitted to more and more minivans and SUVs. In the US, power-folding mirrors have become standard fitment on large SUVs to help drivers garage their vehicle.
Signal mirrors are also on a rising tide. Since Schefenacker began supplying signal mirrors for the Mercedes-Benz S-Class in 1998, this function has gradually become popular. In fact, family-owned Schefenacker has enviable positions in the global rearview mirror market, commanding an overall 29% market share. Headquartered in Esslingen, Germany, Schefenacker is the only worldwide supplier of exterior rearview mirrors with significant shares in all major car-producing regions. It also holds strong positions for rearview mirrors, tail lights and sound systems in the European premium car segment, with a 40% share of the exterior mirror market, 56% share of interior mirrors, 56% share of tail lights and 40% share of branded premium automotive sound systems.
One of the most promising growth areas in the mirror sector across North America, Europe and now Japan is the auto-dimming function. Auto-dimming mirrors contain a gel that can darken when a small charge of electricity is applied. The electric charge is triggered when light sensors in the mirror detect too much light — typically from a glare — in a field of vision.
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By GlobalDataAlready, over one-quarter of all new cars built in North America are equipped with auto-dimming mirrors (sold as either standard or optional fitment) while Europe is catching up fast. The European market is showing the same rate of acceleration as observed in North America. According to JD Power & Associates’ 2003 Feature Contenting Report, auto-dimming mirrors ranked as the third most-desired emerging feature (out of 29) among new car buyers.
Between 1997 and 2003, Gentex’s share of the growing auto-dimming rearview mirror market fell from 90% to 77% as Donnelly (now Magna Donnelly) captured some of the business. During the early 1990s, Gentex and Donnelly collectively spent some $30 million slugging it out in a legal battle of auto-dimming mirrors. Each considered it had a competitive edge over the other in this promising market. The two called a truce in April 1996 with Gentex agreeing to pay Donnelly some $6 million to end all pending litigation.
Despite its market share slide, Gentex’s net sales and income have improved as the company sells more mirrors with new features. Gentex generated sales of $469 million in 2003, up 19% over the year with operating profits up 27% to $146,575. Automotive rearview mirrors account for 95% of revenues.
The company is shipping an increasing number of mirrors that include advanced electronic features beyond auto-dimming, such as compass and temperature displays, LED turn signals, HomeLink, LED map lamps, and lighting. During 2003, 55% of the company’s units were shipped to destinations in North America, 30% in Europe and 15% to the Asia-Pacific region. That compares to 64%, 27% and 9% in 2000 in those same regions, respectively.
Headquartered in Zeeland, Michigan, Gentex employs just over 2,000 people and continues to recruit. It expects to open a fourth plant in Zeeland next year, creating 500 jobs within five years. In 2003, the company opened a satellite sales and engineering office in Munich, Germany and a new office and warehouse facility in Erlenbach, Germany.
In an interview with just-auto.com, Garth Deur, executive vice president for Gentex, talked about the outlook for auto-dimming mirrors and the company’s novel SmartBeam technology, due to enter production this summer.
What are your growth prospects for auto-dimming mirrors in North America, Europe and Asia?
We feel very strongly that auto-dimming represents a huge growth opportunity. Although it has been around for the past 15 years, penetration continues to grow. As we continue to improve the technology and the manufacturing process, we can reduce cost and therefore increase the addressable market. There are a number of factors driving demand for these mirrors. The increasing use of HID (high-intensity discharge or high-powered headlamps with a bluish tint) headlamps, more auxiliary lamps, higher mounted headlights on pick-up trucks and SUVs coupled with more vehicles on the road today than ever before all add up to more headlamp glare. Another factor is demographics — as we grow older, our eyes are less able to adapt to change. So if you put all these factors together you get a great growth story.
At what level will the market plateau?
We believe that 50% is realistic. Let’s talk about interior auto-dimming mirrors. In North America, interior auto-dimming mirrors are fitted to about 26% of new vehicles. In Europe, that figure is more like 15% while in Asia it is still in single digits. The reason for that is because as a North American company, we started in North America. We then went to Europe and then moved into Asia. So we are just on different curves. We don’t see anything fundamental that would have us believe that those markets would all eventually come to the same usage. The penetration of interior auto-dimming mirrors globally is about 15 – 16% while the penetration of exterior mirrors is only about 6%. And the reason for that is similar. We started selling interior auto-dimming mirrors many years before we sold auto-dimming exterior mirrors. And it took us several more years to perfect the auto-dimming technology on curved exterior mirrors.
Assuming your prospects for a 10 – 15% year-over-year rate of growth extends well into this decade, when do you see your manufacturing capacity reaching its limits?
Last year, we produced 10.2 million units. All of those were manufactured in Zeeland, West Michigan. Here, we currently have capacity in our existing plants to build 12 – 14 million mirrors, although that depends a little on the mix of mirrors. In our new plant, which should come on line late next year, will add another 7 – 8 million units of capacity. So given our anticipated 15% unit growth annually, we think we are good for another five years.
For the past three years, we’ve heard about Gentex’s SmartBeam, an intelligent high-beam headlamp control system integrated into the interior auto-dimming mirror that uses an image sensor to monitor surrounding traffic conditions and automate high-beam usage, effectively relieving the driver of dipping his headlights while driving at night. When will we see it in Europe?
We’ll start shipping this technology this summer in North America for the GM STS and Chrysler Jeep Grand Cherokee. Given that this is a very new technology, there are a lot of judgment calls that have to be made between our engineers and our customers’ engineers. Even developing the specification, because it is all new, has been a huge undertaking. As soon as we get these issues defined and solved, we can launch this technology outside North America. And we feel particularly good about its prospects in Europe. There is a lot of interest in it. Even though we have built a very significant business on the importance of seeing behind you, even we have to admit that it is more important to see ahead of you! So SmartBeam is our answer to that.
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