The original equipment (OEM) market for automotive electronic products in North America is projected to advance 6.2 percent per annum through 2004 to $28 billion (including price increases), an acceleration from recent historical trends. Growth will be fueled by vehicle manufacturers’ increasing attempts to differentiate their products with these new features, which also provide an opportunity for price markup. Consumer demand for safer vehicles will provide opportunities, since safety features utilize significant levels of electronics. These factors will be offset by the same conditions that have limited growth since 1994. For example, many key electronics applications (such as engine electronics) have achieved relative maturity, and the intense level of competition among automotive suppliers will continue to limit pricing gains. The development of Internet-based auction purchasing by light vehicle OEMs will also increase pricing pressure. Light vehicle production will remain flat in Canada and experience deceleration in the US and Mexico. These and other trends are presented in OEM Automotive Electronics in North America, a new study from The Freedonia Group, Inc., a Cleveland-based industrial market research firm.
Strongest growth prospects are for advanced electronic products such as navigation and instrumentation devices. Navigation systems that involve intelligent transportation system (ITS) technology will experience exponential growth due to their low current level of diffusion, which creates substantial opportunities for growth through the next decade. Automobile suppliers are working to boost consumer awareness of the safety and convenience advantages of these systems, which will spur diffusion rates. Other products with favorable growth prospects include head-up dashboard displays, collision avoidance systems and intelligent air bag systems. Prospects for more established products such as engine and drivetrain controls will lag behind the market average because of their current widespread diffusion.
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Due to its massive level of light vehicle production, the US will continue to dominate North American automotive electronics demand. However, the less developed Mexican OEM automotive electronics market will exhibit robust gains on almost an across-the-board basis, fueled by healthy light vehicle production and a rising content per unit ratio. Canadian demand is expected to lag due to that country’s sluggish outlook for light vehicle production.
OEM Automotive Electronics in North America (published 04/2000, 310 pages) is available for $3700 from The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH 44143-2326. For further details, please contact Corinne Gangloff by phone 440.684.9600, fax 646.0484 or e-mail pr@freedoniagroup.com. Full text is also available online through commercial database companies and the www.freedoniagroup.com Web site.
Please attribute information from this news release to The Freedonia Group (Cleveland, OH) and include, if possible, the price of the report. We would also appreciate a copy of the article or publication in which we appear.
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