The global automotive under-the-hood electronics market to grow at a CAGR of 10.89% during the period 2016-2020.
Global Automotive Under-the-hood Electronics Market 2016-2020, has been prepared based on an in-depth market analysis with inputs from industry experts. The report covers the market landscape and its growth prospects over the coming years. The report also includes a discussion of the key vendors operating in this market.
Under the hood electronics include anti-lock braking systems, ECU control units, electronic fuel injection system, and automated locking systems, among others. In other words, all the mechanical functions of vehicles, which are controlled by electronics or transformed to electronic functionality, are included in engine control components.
One trend spurring growth in this market is the emergence of electronic manufacturing service (EMS) providers. In the past, OEMs depended on multiple electronic component manufacturers for designing, prototypes, assembly, testing processes, and other services. But now, with increasing electronic content in vehicles and difficulties of managing manufacturing pressure, OEMs are migrating to EMS providers to streamline their supply chain. EMS providers eliminate the need for multiple manufacturers and provide end-to-end solutions, from assembling components to manufacturing and testing ECUs, under one roof.
According to the report, one driver facilitating growth in this market is the high demand for under the hood electronics in emerging markets. Over the past few years, the demand for automobiles in developed countries has been volatile due to economic slowdown. However, the emerging markets have witnessed a robust growth in automobile sales due to strong economic growth, ideal population demographics, and elevated purchasing power of consumers.
Further, the report states that one challenge hindering growth in this market is the short lifecycle of automotive electronics. Technological innovations and dynamic consumer expectations are reducing the average life of vehicles and this is adding pressure on automotive electronics manufacturers as they have to cater to the demanding needs of OEMs and Tier-1 suppliers. Drastic changes in the form of propulsion technologies, electrification, and engine downsizing have reduced the product life to 4-6 years.