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Automotive Industry

Electronics Growth Shifts Into Higher Gear - sales of electronic automobile parts continue to grow - Brief Article

Automotive Industries, August, 2000 by Dale Jewett

When it comes to electronics content, the Mercedes-Benz S-Class shows where the industry's headed. The biggest, most expensive Benz traditionally is the first to carry the latest in electronic components and systems -- which on the 2000 model include on-board navigation, adaptive cruise control and rain-sensing wipers -- in addition to the usual host of power-operated components and accessories.

And it is from the S-Class that many, if not all, of these features will eventually trickle-down into less-costly vehicles, as volumes rise and systems cost falls. Witness the S-cars' COMAND integrated HVAC/audio/navigation control unit, available next year in the '01 Mercedes C-Class.

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It is this migration of features that will help boost electronics' share of a vehicle's value from an average of 22 percent today to around 40 percent, according to a study by consulting firm Roland Berger and Partners. Vehicles such as the S-Class are already near that 40 percent threshold.

Among the components that are expected to experience high growth rates, according to the study, are rain-sensing wipers and electric power-steering units.

Roland Berger expects sales of rain sensors to rise more than 500 percent from 1999 to 3.8 million units in 2004. Europe and North America will account for the vast majority of the installations.

The consulting firm estimates that sales of electric power steering units will hit 11.4 million units in 2007, up from a mere 1.5 million units last year, and hold an 18-percent share of the global power steering market.

Another key element of the growth in vehicle electronics will be the substitution of software for hardware, the study notes. Whereas a telematics system in a vehicle today is comprised of about 75 percent hardware and 25 percent software, by 2010 that ratio will have shifted to 60 percent software and services, and 40 percent hardware.

The trend will force auto suppliers to consolidate and seek electronics experience via alliances or mergers, particularly with non-traditional auto suppliers such as Microsoft, notes Michael Heidingsfelder, who heads Roland Berger's Detroit office. Because of the growing electronics content more suppliers will become eligible to lead the development of modules, he says.

Automotive Industry

Electronics Growth Shifts Into Higher Gear - sales of electronic automobile parts continue to grow - Brief Article

Automotive Industries, August, 2000 by Dale Jewett

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