As automotive manufacturers
turn their attention to producing ever more advanced automobiles, the usage of
automotive sensors continues to rise. Frost & Sullivan, the international
marketing consulting company, expect demand for automotive sensors to continue
on an upward trend following the arrival of new technologies and applications.
In recent years, rising
car production and increasing product usage have prompted mounting growth within
the European market for automotive sensors. Market revenues will increase from
US$1.15 billion in 1999 to US$1.76 billion by 2006. In addition, Frost &
Sullivan calculate the compound annual growth rate to reach 6.3 per cent over
the forecast period, 1999-2006.
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Demands for reduced emissions
and increased safety requirements by the automotive sector are expected to be
major drivers of future market growth. Frost & Sullivan Research Manager,
Mik Sabiers comments: ?Future growth is anticipated to derive from wider usage
of anti-lock brake systems (ABS), electronic stability programme (ESP) and position
sensors in the short term, and gas sensors in the next few years.? However,
declining rates of automobile production and pricing pressures from automobile
manufacturers will be two key areas to challenge manufacturers over the forecast
period.
In 1999 the largest product
segment was the market for speed sensors, accounting for 25.2 per cent of the
total market. The Gas sensor markets will experience continued expansion, becoming
the largest market segment by the end of the forecast period. Growth is being
stimulated by EU emissions legislation, including the Euro 2000 measures and
further regulations are expected in 2005 which should drive the market forward.
With over a third of all
automobile production located in Germany, this country market is understandably
the largest. A position that is further underpinned by the highest rates of
ABS and ESP installation within the region. Germany and second placed France
are both expected to profit from national tax legislation, measures that are
encouraging the replacement of older automobiles. Benefiting substantially from
new investment, Spain lies in third place, followed by the United Kingdom.
The market is largely comprised
of multinational corporations, led by Robert Bosch, Siemens Automotive and Sylea.
Automobile manufacturers exert extensive purchasing power over the industry,
this has particular implications for the market?s composition. Mik Sabiers comments:
?Suppliers of sensors and sensor systems are mostly large companies that are
able to manufacture in large volumes at low cost while continually investing
in research and development.?
Important technological
advances include the development of micro-mechanical systems (micro-systems)
and further enhancement of silicon micro-machining. Prices for new technologies
have fallen in recent years, facilitating more extensive market penetration.
Examples of products recently commercialised in the market include fuel injection
pressure, NOx and torque sensors.
The European market for
automotive sensors will witness healthy growth over the forecast period, growth
that will run parallel with automobile manufacturers attempting to provide more
advanced products. As numerous application markets become saturated, the development
of new technology and the pursuit of new product applications will grow ever
more important. Strategies that are further emphasised by the rising levels
of competition within the industry, particularly from North American and Far
Eastern manufacturers.
The expansion of product
ranges and where relevant the development of new technology are seen as key
factors in the pursuit of future market success. Joint ventures and merger/acquisition
strategies are acknowledged as a viable means for manufacturers to explore such
factors. The search for and specialisation within niche markets should remain
under constant review, primarily as a process to maintain market share in an
increasingly competitive industry.
