Wednesday, April 24, 2013

China’s advanced driver assistance systems market set to more than triple by 2019

CHINA: The market for automotive Advanced Driver Assistance Systems (ADAS) in China is forecast to boom to $3.1 billion in 2019, up from $971 million in 2013, driven by rising demand for convenience and safety features among Chinese motorists, according to a recently published report by IMS Research.

The China ADAS market will triple in value within six years from the present. Growth rates will mostly be in the 19 to 20 percent range during the initial years of the forecast, moderating to a still-robust 13 percent in the last two years, as shown in the attached figure.

Fitment rates for most ADAS products are currently very low in China, typically installed only in luxury and some high-end light vehicles due to their high cost. However, most ADAS mechanisms are predicted to see a big increase in China in both shipments and fitment rates starting this year until 2019.

This is due to the growing awareness of driver safety from both consumers and vehicle manufacturers. Some of the ADAS products set to enjoy growth in the country are adaptive cruise control, blind-spot detection and self-parking systems.

“Similar to other regions like Europe and America, particular regulations and C-NCAP assessments will greatly drive the deployment of some ADAS products in China,” said Michael Liu, senior analyst from IHS Automotive.

“Tire-pressure-monitoring systems (TPMS), for instance—although not usually considered as part of ADAS—will explode in the China market and quickly reach 100 percent penetration by the end of the forecast period, up from a current fitment rate of only about 4 percent. This is due to the possibility of upcoming mandatory regulations in China, even if the regulations are not likely to extend to many other ADAS products. In fact, more basic safety systems such as electronic stability control will be deployed before ADAS.”

While the overall ADAS market is set for tremendous expansion, not all ADAS products will enjoy strong growth. Systems like driver monitoring, high-beam control, night vision, multiview systems and intelligent speed adaptation will encounter a slower market because of high product costs, unique driving behavioral patterns in China and low consumer awareness or acceptance.

To date, most ADAS products are currently imported into China either as a system awaiting installation in cars, or as already fitted into imported light vehicles. Two reasons account for this phenomenon. Not only are transportation costs overall very low compared with the cost of ADAS products, ADAS sales in China are also not big enough to justify local ADAS manufacturing.

With market demand for ADAS growing in the country, some system suppliers are expected to transfer production to China. Even so, imported systems will continue to account for the majority of ADAS units in the China market during the forecast period.

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