Increasing demand for airbag modules, primarily automotive airbag, which is augmented by hefty demand for new cars is expected to drive the global airbag market over the next few years. Airbags provide cushioning and protection to the passengers in the event of a car crash. These bags are primarily made of thin nylon fabric and remain folded into the steering wheel, dashboard, seat, door or roof. In the event of a collision, the crash sensor in the car sends signals to inflate the bags, thus mitigating the effect of the collision.
The industry is witnessing the development of new products and technologies including the pedestrian airbag, smart airbag, fuzzy logic software for airbag and occupant sensor system to meet the growing demand for smarter and safer airbags. Research & development efforts coupled with technological advancements are considered the most critical component of the airbag industry value chain. These factors are anticipated to impact future demand for airbag modules favorably, thus, making it necessary for firms to align their technology strategy with generic business strategy. Due to intense competition, it becomes increasingly important for vendors to reach out to diversified geographical locations and venture into the untapped market.
Stringent government safety regulations coupled with increasing public awareness and general concerns for safety may fuel growth over the next few years. Development of rollover and side impact systems along with increased sophistication of systems and competitive dynamics is expected to spur product demand. Rising consumer acceptance, technology maturation, and economical prices may further push airbag utilization which is also anticipated to propel product market over the forecast period. Large scale vehicle manufacturers are emphasizing on promoting usage of airbags including occupant sensing systems and anticipatory crash technologies which is also expected to fuel growth. Better information flow, globalization and increasing amount of public awareness about safety in vehicles are making consumers aware of the technological changes related to security resulting in increasing demand for better safety equipment in automobiles.
Competitive and demanding customers instigate companies to focus more on product innovation and technology development that offers more reliability and enhanced features. The industry is also witnessing increasing licensing technology and partnerships with large airbag suppliers. Maturing supply bases in developed nations provide opportunity for low-cost production facility for airbag manufacturers. Improved fabric technologies resulting in reducing cushion weight and increasing foldability, thus developing advanced airbags. The industry is anticipated to witness robust growth over the next seven years owing to the aforementioned factors.
Due to high capital investment in plant and machinery coupled with technical know-how, entry and exit barriers are high in this business. Thus, intense rivalry among airbag module manufacturers refutes the entry of other players in the market. Airbags on two-wheelers, which can help reduce the severity of injuries caused by frontal collisions, provides tremendous opportunity for manufacturers. Stringent government regulations instigate automotive manufacturers to incorporate airbags in their vehicles which make these manufacturers buy airbags in large volumes resulting in increasing bargaining power of the manufacturer. Additionally, minimal product differentiation in airbag modules further increases the bargaining power of the buyer in this industry.
Airbag industry has too much dependency upon OEMs (automobile manufacturers), which makes it prone to automobile market fluctuations. Due to the high growth rate in the airbag industry, many companies desire to venture into this market, thus making it immensely competitive and gradually intensifying rivalry amongst the market players, which leads to lower bargaining power of airbag module manufacturers. High replacement cost results in the entry of counterfeit products which tends to act as a major threat for manufacturers in this industry. Increasing cost of airbags is likely to increase prices of vehicles negatively affecting the margins of OEMs which in turn pushes the supplier for cost containment making value chain very competitive. Driverless vehicles, anti-crash sensors, and vehicles using GPS (Global Positioning system) can impose serious threats to the airbag market. These advanced systems utilize radar and cameras to detect potential dangers which might overtake passive protection, such as airbags.
There are three critical elements in an airbag including crash sensors, inflation systems, and bags. Based on the location of airbags, the market is segmented into side airbag, frontal airbag, knee airbag, rear curtain airbag and center airbag. Centre airbag followed by the side airbag constitutes a significant share of the demand.
North America is anticipated to expected to emerge as the fastest growing market closely followed by Asia. This may be primarily attributed to the various safety guidelines taken by the government agencies like National Highway Traffic Safety Administration’s (NHTSA). Asia Pacific is still in the nascent stage and the regional growth is expected to manifold due to reasons like hike in vehicle sales and demand for safer vehicles. Conveniently available raw materials and cheap labor in China tend to increase the production level in the region, making it Asia’s largest manufacturer of airbags.
Major industry participants include Takata Corporation, Denso Corporation, Toyoda Gosei Co. Ltd., Autoliv, Inc, Delphi Automotive PLC, Robert Bosch GmbH, Key Safety Systems Inc., Hyundai Mobis Co. Ltd, Continental AG. Most automobile companies have introduced airbags in their models. Market leaders including Maruti Suzuki and Ford have introduced dual front airbags in their hatchbacks and sedan models.
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