Automotive Electronics Market Size, Share & Trends Analysis Report By Component (Electronic Control Unit, Sensors, Current Carrying Devices), By Application, By Sales Channel, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global automotive electronics market size was valued at USD 217.86 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 7.9% from 2021 to 2028. The increasing integration and implementation of advanced safety systems such as automatic emergency braking, airbags, parking assistance systems, and lane departure warning to decrease road accidents is expected to favor demand over the forecast period. Moreover, features such as emergency call systems, alcohol ignition interlocks, and accident data recorder systems are rapidly adopted to safeguard in-vehicle passengers and are expected to drive market growth over the forecast period.

Automotive manufacturers are making substantial capital investments in research and development activities to develop energy storage technology and high-performance electronics at a reasonable cost. Moreover, OEMs are becoming more dependent on electronics to deliver a high safety level. In 2020, electronic components in the automotive accounted for around 35% of the total vehicle cost. However, with advances in technologies, automotive electronic components are expected to account for around 50% of the total vehicle cost by 2030.

The growing adoption of Hybrid Electric Vehicles (HEV) and Electric Vehicles (EV) is also expected to drive the demand for automotive electronics components. Moreover, the substitution of mechanical components with electronic components, such as the use of electronic switches instead of a relay, is another means through which electronics can address the numerous needs of the automotive industry, simultaneously increasing reliability and reducing the weight of wire harnesses. Technological advancements related to in-vehicle safety and government regulations to minimize road accidents are also expected to boost the demand over the forecast period.

The rising demand for in-car infotainment systems due to their increased comfort, efficiency, and convenience is, in turn, driving the demand for in-vehicle data storage to support complex in-vehicle features. This is anticipated to be one of the crucial drivers for the growth of the market in infotainment applications.

The economy worldwide has faced a massive setback due to the COVID-19 pandemic, negatively impacting automotive production. The aftermath of COVID-19 has resulted in supply chain disruptions with several production facilities coming to a halt. The outbreak has taken a toll on passenger and commercial vehicle sales, subsequently impacting the demand f in the automotive sector. The EU market in the past has led the automotive electronic component sales; however, recently, the adoption rate has witnessed a decline due to a dip in automotive sales in the region. Europe is likely to see mixed recovery cycles owing to the economic stimulus packages and local restrictions. According to the German Association of the Automotive Industry (VDA), in Europe, 5.1 million passenger cars were registered in the first half of 2020, 39% less than in 2019. Moreover, sales of passenger vehicles in the U.S. declined by around 26% in 2020 compared to the previous year.

Component Insights

The current carrying devices segment accounted for the largest revenue share of around 41% in 2020. Current carrying devices comprise products such as electronic switches, fuses, connectors, and wiring harnesses. The high cost and a large number of electronic components such as electronic switches, fuses, connectors, and wiring harness used in the vehicle are responsible for the significant market share of current-carrying devices in the component segment. The growth of this segment can be also be attributed to the rising demand for connectivity, convenience, and safety features in passenger cars as well as commercial vehicles.

The sensors segment is projected to register a CAGR of 3.8% from 2021 to 2028. The sensors segment comprises sensing devices that are used in the detection of physical parameters, proximity, and positioning of the vehicle, chemical properties, as well as process variables. Favorable government initiatives for passenger safety and security in various regions are expected to drive revenue growth. These devices have become an essential part of automobiles since they detect parameters such as heat, speed, and tire pressure and condition while taking precautionary measures in case of danger.

Application Insights

The safety systems segment accounted for the largest share of around 29% of the overall market in 2020. Safety systems comprise components such as airbags, tire pressure monitoring systems, keyless entry systems, electronic brake distribution, electronic stability control, electric power steering, and suspension control, among others. Increasing customer awareness about technological changes related to safety equipment in vehicles is expected to act as a potential driver for the growth of the safety systems segment.

The Advanced Driver Assistance System (ADAS) segment is estimated to register a CAGR exceeding 10.6% from 2021 to 2028. The demand for ADAS sensors is increasing exponentially owing to the increased application and functionalities that these sensors offer. Sensors form an essential part of ADAS. From primary stereo cameras to the latest LiDAR, sensors are utilized individually or in combination to perform complicated functions. Thus, the increasing demand for automated driving is expected to fuel the demand for automotive electronic components over the forecasted period.

Sales Channel Insights

The OEM segment accounted for the largest share of around 68% in 2020. The OEM segment dominated the automotive electronics market in 2020, owing to the increased durability and shelf-life of electronic components. Since electronic components form an integral part of the vehicles, consumers prefer buying them through OEMs to obtain genuine parts. Furthermore, with the increase in the design complexity of these electronic components, aftermarket electronic components are expected to account for a lower revenue share over the forecast period.

The aftermarket segment is estimated to register a CAGR exceeding 6.8% from 2021 to 2028. Aftermarket denotes the secondary market of the automotive industry concerned with the manufacturing, remanufacturing, distribution, retailing, and installation of all vehicle electronic parts and accessories after the sale of the automobile by the OEM to the consumer. With an increase in the complexity of these electronic components, the share of aftermarket components is expected to decline over the forecast period.

Regional Insights

The Asia Pacific market accounted for the largest revenue share of over 40% in 2020 and is anticipated to continue its dominance over the forecast period with a CAGR exceeding 8.3%. Countries such as Taiwan, South Korea, Malaysia, and Thailand have significantly contributed to the market growth owing to the flourishing electronic component manufacturing activities. Most of the automotive electronics demand in the Asia Pacific is fulfilled from China and Japan. However, the limited number of automotive electronics manufacturers poses an excellent investment opportunity for regional suppliers to capitalize on the local demand, thereby making the rest of the Asia Pacific regions an attractive place for investors.

The market in North America is expected to experience significant growth owing to the high level of motor vehicle production and the presence of automotive electronic component manufacturers such as TRW Automotive; Continental Corporation; Robert Bosch GmbH; and Autoliv, Inc.

Key Companies & Market Share Insights

The key players that dominated the global market in 2020 include Continental Corporation; Robert Bosch GmbH; Autoliv, Inc.; Samsung; Delphi Technologies; Denso Corporation; and ZF Friedrichshafen AG. Most of these companies are focused on providing technologically driven and advanced products to enhance their product offerings in the market. The companies are also undertaking strategic initiatives such as regional expansions, acquisitions, mergers, partnerships, and collaborations to grow in the market.

Organic growth remains the key strategy for the overall industry, focusing on product launches to develop new and innovative products and expand product offerings. For instance, in April 2021, DENSO Corporation announced the development of products that feature advanced driver assistance technology for the new Lexus LS. The newly developed Advanced Drive would include LiDAR for detecting the shapes of surrounding vehicles and roads. Some prominent players operating in the global automotive electronics market are:

• Continental AG

• DENSO Corporation

• Hella GmbH& Co. KGaA

• Infineon Technologies AG

• Robert Bosch GmbH

• Valeo Inc.

• ZF Friedrichshafen AG

• Hitachi Automotive Systems, Ltd.

• Visteon Corporation

• Xilinx, Inc.

Automotive Electronics Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For this study, Grand View Research has segmented the global automotive electronics market report by component, application, sales channel, and region:

• Component Outlook (Revenue, USD Million, 2016 - 2028)

  • Electronic Control Unit

  • Sensors

  • Current Carrying Devices

  • Others

• Application Outlook (Revenue, USD Million, 2016 - 2028)

  • ADAS

  • Infotainment

  • Body Electronics

  • Safety Systems

  • Powertrain Electronics

• Sales Channel Outlook (Revenue, USD Million, 2016 - 2028)

  • OEM

  • Aftermarket

• Regional Outlook (Revenue, USD Million, 2016 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • Japan

    • India

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa