Every year, road accidents kill more than 1.3 million people, says the World Health Organization (WHO). As a result of the rising incidence of such events, several governments around the world are mandating the installation of advanced driver-assistance (ADAS) systems in automobiles. Due to this factor, the globalautomotive electronics market revenue is expected to rise to $615.3 billion by 2030 from $235.7 billion in 2019, at a 9.3% CAGR during 2020–2030.
This is because such advanced systems rely on an array of sensors and electronic modules to collect and ferry data about their surroundings. Thus, with the increasing sale of vehicles, especially those equipped with ADAS, the automotive electronics market will keep prospering in the years to come. In addition, governments are also mandating the integration of catalytic converters, exhaust gas recirculation (EGR) valves, positive crankcase ventilation (PCV) valves, and evaporative controls for emission reduction, thus driving the demand for vehicle electronics.
As the automotive sector has been hit hard by the COVID-19 pandemic, the advance of the automotive electronics market has slowed down temporarily. In compliance with the movement restrictions and lockdown measures, auto plants were shut down, which reduced automotive production. Similarly, garages and repair shops also downed shutters, thereby leading to a slump in the demand for automotive electronics in the aftermarket. Similarly, due to salary cuts and unemployment, people also did not spend much on vehicles and other non-essential goods.
In the past, the automotive electronics market was dominated by the current-carrying device category, based on component type. Even an automobile not integrated with advanced sensors contains at least 200 electronic modules, for which current-carrying devices are a prerequisite. In addition, the installation rate of position sensors in clutch plates, steering, pedals, and hybrid engines and of temperature sensors is driving the demand for current-carrying devices.
Till now, the original equipment manufacturer (OEM) bifurcation has generated the higher revenue in the automotive electronics market, under the distribution channel segmentation. OEMs install most of the electronic components in automobiles, and with the increasing competition in the industry, automakers are using better electronic components for higher efficiency and passenger comfort.
Asia-Pacific (APAC) is the largest automotive electronics market, and it is also projected to grow the fastest in the near future. The region accounts for the highest automotive production and sales on account of its huge population, which is witnessing a rise in its purchasing power. In addition, due to the government efforts to curtail air pollution levels, the demand for electric vehicles is rising, especially in India and China.