How the Automotive Electronics Market is Evolving

Vishal Pratap Singh

A recent report said that India’s automotive electronics market is likely to cross 18 billion dollar by 2027 from 6 billion dollar in 2020 with a CAGR of 17 percent. Factors like rising income levels and increase in the preference of customers in vehicle digital experience will triple the sales of automotive electronics by 2027. Counterpart Research Analyst Soumen Mandal said, “Rising concerns among people about the advanced safety and communication services, along with more embedded connectivity service offerings by automakers, will drive Automotive Electronics market in future”.

The Growth Drivers

Mainly the purpose of using automotive electronics in vehicles is to enhance the performance of its electronic parts which are there such as media player devices and parts for improving the overall feel and efficiency of the vehicle. The most common uses of automotive electronics are in airbags, electronic fuel injection, infotainment and electronic fuel injection which are responsible for improving the efficiency of the vehicles and enhances its performance.

The different components of vehicles which depend on electronics are radio, ignition, engine management, carputers, telematics and in-car entertainment systems. Without these components, one cannot imagine a vehicle. There are stringent rules and regulations of government like Bharat Stage-VI (BS-VI) and Corporate Average Fuel Efficiency II (CAFE II) which are also responsible for the rising electronic content in a vehicle.

The major factors which are driving the automotive electronics market are rapid demand for cutting edge infotainment system in the vehicles. As well as day by day increasing road accidents are growing concerns about safety and demands for active safety systems in vehicles.

In automobiles, there are immense opportunities for new players who can provide better fuel efficient vehicles with more entertainment devices. In fact, in the automotive sector, there is a sudden transition happening from hardware driven vehicles to software driven vehicles.

Software Applications in Vehicles

There is no doubt in the fact that with the increase in level of autonomy, and focus on quality and security of vehicles by manufacturers will definitely raise the demand for electronics in vehicles. Also, with the increasing use of electronics in automobiles, consumers are able to secure their data and software in a more efficient way. A recent study shows that the average number of software applications and electronic components used per vehicle is growing rapidly, hence influencing the growth of the automatic electronics market by both, value and volume.

However, passenger vehicles are expected to capture nearly two-third of the Indian automotive electronics market driven by the rising usage of Telematics Control Unit (TCU), infotainment and other electronic components such as On-Board Diagnostics (OBD), Electronic Control Unit (ECU) and Anti-lock Braking Systems (ABS). Driven by favourable government policies such as Faster Adoption and Manufacturing of Electric Vehicles II (FAME II) and rising consumer awareness of the green technology, Electric Vehicle (EV) penetration is estimated to climb to 15 per cent by 2027.

New Technologies that are Driving Growth of Automotive Electronics

Experts believe that modern technologies such as Artificial Intelligence (AI) and Machine Learning (ML) will contribute a lot in the automobile sector as these technologies are smart enough to allow the players to automate various functions of their vehicles. AI and ML can help users to quickly check their engine’s status and monitor its temperature. Artificial Intelligence also promises enhanced safety and security of the users.

Indian government stepping its first move towards the adoption of autonomous vehicles has made it mandatory to install Advanced Driver Assistance Systems (ADAS) in all the vehicles to be sold from 2022. ADAS is very important for the safety purpose in autonomous vehicles as it is able to detect the position and direction of other vehicles on the road and pedestrians. Thus, it is helpful in avoiding the collision between vehicles without manual intervention.

There are many third party players in the market like Android and Google, who are already working on systems to enhance the experience of users in case of smart cars. Another player in this segment is Android Auto that allows the users to stay connected while driving. It can also perform various functions via voice command.

Internet of Things (IoT) also plays an important role in driving the growth of automotive electronics market. This technology enables the vehicles to access real time data in large quantities and present its comprehensive analysis for the users. IoT will enable the vehicles to supply all the relevant data and information to the user to save his time and drive efficiently. IoT will help the users through communicating information of traffic jams and if there will be an emergency, it can send an SOS to the concerned service provider.

The Way Forward

It is not wrong to say that at present the automotive electronics sector of India is going through a transitional stage. In the coming days, vehicles will rely upon a number of apps and technologies to function efficiently. These evolving technologies when combined with auto sector will fulfill the demands of future.