Technological developments in engine management and the incorporation of safety systems in cars will be the key growth drivers for the Indian automotive electronics market in the next five years as it attains a compound annual growth rate (CAGR) of 21.8 per cent, according to iSuppli Corp.
“The Indian automotive electronics industry is expected to achieve such robust growth, despite challenges such as a cost-sensitive Indian market, poor infrastructure and corrupt bureaucracy,” said Jagdish Rebello, Ph D, director and principal analyst for iSuppli Corp.
“One of the emerging trends in the Indian automobile industry is the development of a mushrooming automotive electronics market inside the motor vehicle segment,” Rebello added.
Today, the automotive body electronics and automotive sensor areas represent only 1 per cent and 6 per cent of India’s overall automotive electronics market, respectively. However, because of government initiatives toward safety and environmental issues, and the overall shift in customer preferences to technologically-superior automobiles, these two segments are expected to witness the highest growth of any parts of the Indian automotive electronics market in the future.
Engine management systems, such as engine control unit (ECU) and fuel-injection technology, account for 45 per cent of the power-train segment, which dominates the Indian automotive electronics market. India’s market for power-train electronics is expected to grow at a CAGR of 17.3 per cent from 2005 to 2010.
Technologies such as multi point fuel injection (MPFI), common rail direct injection (CRDI) and piezoelectric fuel injection systems are being rapidly adopted in Indian automobiles.
If government initiatives such as its vehicle safety policy are implemented, rapid growth in the safety and control segment can be expected. The market for safety electronics is expected to expand at a CAGR of about 50 per cent from 2005 to 2010. Indigenous safety system manufacturers, such as Sona Koyo Steering Systems Ltd. and Sundaram Clayton Ltd, will derive the maximum benefit from this development.
While automotive engine management and safety systems will be the main market drivers for Indian automotive electronics, production of cutting-edge digital instrumentation and electronic ignition systems is on the rise. These systems are being used in high-end motorcycles—which iSuppli includes in its automotive forecasts — including Hero Honda Group’s Karizma and Bajaj Auto Ltd.’s Pulsar DTS-Fi.
Market players, such as Minda Huff Ltd, also have launched state-of-the-art security systems for motor vehicles. Some of them include ultrasonic movement detectors and digital key immobilisers.
CD/MP3 players are expected to dominate the car-entertainment segment, with cassette players losing their market share. The increased influence of global players like Sony Corp and Pioneer Electronics Inc will also strengthen the market for DVD players in India, which is currently in the nascent stage.
Much of this technological innovation is being brought to market from distribution networks that are playing a vital role in the Indian automotive electronics industry. These distribution networks bridge the gap between unorganized segments—which include relatively smaller, indigenous electronic system manufacturers—and the players at the apex of the automotive value chain, such as automotive system OEMs, design houses and vehicle OEMs. Global dealers, such as Avnet Inc. and Arrow Asia Pac Ltd, maintain a significant presence in the Indian automotive electronics market.
For more information, visit www.isuppli.com
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