The number of on-road vehicles has increased over the last decade with the improvement in the features and technology of automobiles, as well as the rising income among the middle-class population. The shifting focus towards safety has resulted in the integration of technologies ensuring passenger safety, communication capabilities and driving comfort.
In addition to this, the growing environmental concern and stringent rules and regulations related to driving have helped in the development of Advanced Driver Assist Systems (ADAS) and autonomous technology. The main focus is on avoidance of crash rather than crash survival, and to this end automotive players are emphasizing on increasing the road safety and achieving the goal of crash avoidance.
Several federal authorities have come forward in support of the goals automakers are trying to achieve and are backing an early integration of ADAS in automobiles. Hence, the rising popularity of ADAS is attracting players from different verticals to manufacture essential components included in ADAS and autonomous technology. Sensors and semiconductors together make the ADAS technology viable with their efficient and swift processing powers. The market players are competing to stay ahead in the market by providing the latest and diverse technologies which will underpin the development of autonomous vehicles in the future.
Thus, there is a separate market just for the components used for ADAS and autonomous vehicles, and this market is expanding rapidly. The ADAS and autonomous driving components market is also proportionally relative to the development of the autonomous vehicles. The need for safety, rising demand for luxury cars as a result of the increasing disposable income of the middle-income population of the developing countries, and stringent government regulations have influenced the autonomous vehicle market to substantially enhance its sales, which has subsequently propelled the growth of its components.
IMPENDING CONSUMER DEMAND
According to the latest report by BIS Research, the Global ADAS and Autonomous Driving Components Market was valued at $2.76 billion in 2016, and is expected to grow at a double-digit CAGR from 2017 to 2026. There is an impending consumer demand for ADAS and higher level automated vehicles. Currently, ADAS integrated vehicles contribute the largest share in the number of automated automobiles, while higher level of autonomous systems are still under the testing phase. However in the coming times, vehicles with inbuilt higher level of autonomous systems are expected to overtake the market dominance of ADAS integrated vehicles.
Various components such as cameras, radars, ultrasonic sensors, LiDARs and automotive ECUs and their profound application in autonomous and ADAS integrated vehicles directly links their progress to the autonomous vehicles market. Among the components, cameras and ultrasonic sensors are being used widely for ADAS vehicles which require limited range. These two components have proven to be cost-effective and provide high operational advantages. However, Radars are comparatively expensive with wider detection range, thus finding their application in Autonomous Emergency Braking System (AEBS) and traffic jam assist system.
According to the report, among the different level of automation available in the market, components market for level 1 automation is currently leading the market. However, in the near future, there may be a shift in the market dominance, with market for level 2 automated system components anticipated to lead the market by 2026. An increase in the market penetration rate of higher level of automation (level 3, 4 and 5) in vehicles, due to the rise in concern towards driver safety, will drive the components market for higher automation level at a rapid pace in the forecast period.
The stringent laws imposed by federal authorities mandating the use of autonomous systems and the growing interest of automakers to develop fleets of automated vehicles in order to improve fuel efficiency and decrease road congestion are the drivers of the future of this market. However, factors such as high sticker price of these components may limit the customer pool. In addition to this, the considerable risks associated with the usage of autonomous vehicles and security concerns towards vehicle data may hinder the growth of the market.