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Study: Automotive electronics market returns to growth – in China

May 03, 2010 | Christoph Hammerschmidt | 222900808
First the good news: The market for automotive components continues to be a growth market. The bad news is that the growth will happen almost exclusively in China, with Europe, Japan and North America to stagnate, says a study conducted by consulting company Roland Berger.
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According to the study, the most pronounced growth segments are powertrain and electronics. The market volume is expected to rise from 500 billion euros (about USD 661 billion) in 2008 to 660 billion euros in 2020. While growth in the traditional home geographies of the automotive industry – Europe, Japan and the USA, referred to as “the triad” by the study - will remain essentially flat, the Chinese market will sport strong growth, the experts say.

Key growth drivers will be, no surprise, pressure to reduce carbon dioxide emissions- mainly by reducing fuel consumption -, rising safety standards, and greater comfort expectations. Also the strong demand for low-price automobiles will contribute to the rising component demand. All these growth drivers combined will lead to increased electronics content in the cars, and in particular in the powertrain where alternative technologies are expected to gain traction.

Nevertheless, Roland Berger expert Wolfgang Bernhard pointed out that there is a wide gap between winners and losers. And this gap will be most pronounced in the powertrain segment. According to Bernhard, the demand for power electronics, electric drive systems and high-voltage batteries will experience double-digit growth, generating business opportunities even for new players in the industry. Purely mechanical component supplies however will get under pressure from two sides: While the massive cost-cutting pressure will continue to hit them, they face the threat of being replaced by more sophisticated mechatronic solutions.

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