Global Automotive Electronics Market - 2024-2031

Overview

Global Automotive Electronics Market reached US$ 6.5 billion in 2023 and is expected to reach US$ 12.4 billion by 2031, growing with a CAGR of 8.5% during the forecast period 2024-2031.

Alternative drives and safety aspects in autonomous driving increase power electrical grid demands. More electrical power is needed for vehicle safety and comfort, while electrification reduces CO2 emissions. It requires expanding charging infrastructure, upgrading the grid, implementing smart solutions and using energy storage.

In line with the Net Zero Emissions by 2050 Scenario, the plan is to have an electric car fleet of over 300 million by 2031, with electric cars accounting for 60% of new car sales. The goal is to gradually increase their sales share by less than 6% per year. The growth in electric vehicle sales is driving significant investment in electrification which was accounted for more than 65% of overall end-use investment in the transport sector in 2021. The International Energy Agency estimates this share further increase to over 74% in 2022.

In 2023, North America is expected to be the second-fastest growing region, holding about 25% of the global automotive electronics market. Many automotive electronics companies in the region are launching partnerships and collaborations to expand their market position. For example, in January 2023, a U.S.-based automotive electronics supplier announced a technical collaboration with semiconductor and software maker Qualcomm to build an advanced automotive cockpit domain controller to enable automotive firms' modern cockpits.

Dynamics

Growth in Software and Electrical Components

The convergence of autonomous driving, connected vehicles, electrification of powertrains and shared mobility which is known as the ACES trends, reshaping the automotive electronics industry. The trends are interconnected and mutually reinforcing, leading to significant disruptions across the automotive electronics value chain and impacting all stakeholders involved.

One key consequence of these trends is the rapid growth in the market for automotive software and electrical and electronic components. According to a recent analysis the market is projected to experience a compound annual growth rate of 7 percent, expanding from US$ 238 billion in 2020 to US$ 469 billion by 2031. In comparison, the overall automotive market is expected to grow at a compound annual rate of 3% during the same period. It indicates that the software and E/E market will outpace overall market growth significantly.

Evolving Automotive Industry

The integration of advanced electronics enables the development of autonomous driving capabilities, connectivity features, electrified powertrains and new mobility services. As a result, automotive companies and their executives have shifted their focus to electronics recognizing the critical importance of software and E/E components in meeting the evolving demands of the industry.

The increasing reliance on software and electronic components in vehicles has led to collaborations, investments and strategic partnerships between traditional automotive manufacturers and technology companies. The partnerships aim to leverage expertise in software development, connectivity solutions and advanced electronics to stay competitive in the evolving automotive landscape.

Complex Automotive Electronics Systems in Modern Vehicles

The increasing complexity of modern premium-class vehicles, specifically in the context of automotive electronics systems significantly grown due to the expansion of functionality in cars which are driven by factors such as infotainment and driver assistance applications. The expansion extends to various other fields of application within vehicles.

The growing complexity of automotive electronics systems poses challenges in terms of design, development, integration and overall system management. The integration of advanced features like infotainment systems, driver assistance systems, connectivity and other applications requires intricate coordination and synchronization among various electronic components and subsystems.

Segment Analysis

The global automotive electronics market is segmented based on type, end-user and region.

Rising Demand for Driving Assistance Drives the Segment Growth

Driver assistance is expected to be the fastest growing segment with 1/3rd of the market during the forecast period 2024-2031. Manufacturers like as Continental AG, DENSO Corporation, Infineon Technologies AG and Robert Bosch GmbH are creating safety systems automobiles to meet the growing need for driver assistance. Factors such as increased emphasis on vehicle safety and an increase in the incidence of road accidents help to drive the segment's growth.

For example, in March 2023, Hyundai Motor India Limited unveiled its new Hyundai Verna, which includes a level 2 ADAS system and 65 advanced safety features, among other things. The new Verna would also feature Hyundai's Smart Sense safety features, which would receive automated sensing technology with radars, cameras to detect impediments and sensors on the road and aid in correcting alerts and actions.

Geographical Penetration

Rising Presence of Major Players in Asia-Pacific

Asia-Pacific is the dominant region in the global automotive electronics market covering about 30% of the market. The region's lower costs, abundant labor and established manufacturing base have made it an attractive alternative for companies. Automotive manufacturers aim to increase their production volume by adopting modern production technology. For instance, Mercedes Benz, General Motors and Volkswagen shifted their production plants to developing countries.

Micron Technology is in discussions to set up a state-of-the-art semiconductor packaging plant in India, representing an investment of over US$ 1 billion. The move will strengthen the company's foothold in the international scene. With this new setup, Micron will create jobs, increase its production capabilities and make the latest technology available to customers in the region.

Competitive Landscape

The major global players in the market include Geotab, MiX Electronics, Verizon Connect, Teletrac Navman, Omnitracs LLC, CalAmp, Samsara, TomTom, Trimble and Fleet Complete.

COVID-19 Impact

The shortage of semiconductor chips has significantly impacted the automotive electronics industry. The COVID-19 pandemic had a significant impact on the manufacturing world, including the automotive electronics industry. China and Taiwan, as major semiconductor manufacturing hubs had faced challenges in chip production due to worker shortages and labor-related issues.

The availability of raw materials for semiconductor production was been a challenge during COVID-19 even during periods when manufacturing capacity has returned to a relatively normal level. China plays a dominant role in the production of crucial raw materials used in semiconductor manufacturing, such as silicon, germanium and gallium arsenide. The mining, processing and production industries associated with these materials have also faced labor and supply challenges similar to those experienced by Chinese manufacturers.

Russia-Ukraine War Impact

The Russian invasion of Ukraine has caused many accountable effects into the semiconductor supply chain and the automotive industry. Ukraine supplies between around 30-35% of the world's purified neon gas, while Russia supplies around 30% of palladium, a rare metal necessary for semiconductors. Furthermore, air transport of semiconductors has been drastically impacted by higher costs and reduced availability of shipping volume.

The war between Russia and Ukraine has created an additional problem for Original Equipment Manufacturers (OEMs). Owing to the competition for critical vehicle components, such as wiring harnesses, OEMs have had to reduce their production volumes to maintain supply. The decrease in demand for semiconductor-based components has added further uncertainty to the market.

AI Impact

Autonomous driving assistance systems are equipped with a combination of sensor technologies and AI processing algorithms to sense the environment surrounding a vehicle, process the data and provide the driver with information and take autonomous action. It allows driver to receive alerts of potential dangers and take the appropriate steps to avoid any potentially deadly car accidents.

AI can help provide computational requirements to vehicles, like cars. After perceiving their environment using high-resolution, 360-degree cameras and lidars, the vehicle can plan a safe route to its destination based on the data it has collected and processed. It helps ensure that the vehicle makes the safest journey.

By Type

• Engine Electronics
• Transmission Electronics
• Chassis Electronics
• Driver Assistance
• Entertainment Systems
• Electronic and Integrated
• Cockpit Systems

By End-User

• Automotive Manufacturers
• Fleet Operators
• Government and Public Transportation Agencies
• Electronics Manufacturers

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• In January 2023, BMW showcased the i Vision Dee at CES 2023, providing drivers with the ability to harness the car's digital capabilities. The central control features a mixed reality slider that transforms the windshield into a periodically changing portal of digital experiences. Shy-Tech technology touch sensors enable the vehicle owner to adjust the levels of digital content.
• In July 2023, Altium and Ansys partnerships to enhance the electronic design and development process by establishing a digital connection between Altium's electronic computer-aided design tools and Ansys Electronics Desktop. The collaborative integration, expected to be released in the latter half of 2023, introduces a higher degree of digital continuity, thereby mitigating development time and the potential for design mistakes.
• In June 2023, AMD unveiled the Versal Premium VP1902 adaptive system-on-chip (SoC), which is touted as the world's largest adaptive SoC. With an impressive 18.5 million logic cells compressed into a 77x77 mm area on a four-tile interconnected chiplet, this SoC offers double the density and double the bandwidth compared to the previous generation Versal premium device.

Why Purchase the Report?

• To visualize the global automotive electronics market segmentation based on type, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of automotive electronics market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global automotive electronics market report would provide approximately 54 tables, 45 figures and 183 pages.

Target Audience 2024

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies