Automotive Electronics Market Flourishing with New Products

The Chinese automobile industry has grown 20% in 2006 by manufacturing 7.28 million cars, following the similar growth made in 2005. In conjunction with the rapid growth of automobile market, electronic device market for automobile has grown 40% to reach 86.76 billion yuan in 2006. (Figure 1) In terms of application segments, electronic devices for chassis control/safety systems represented 29.2% of total market value, followed by that for power train systems which occupied 28.5%. (Figure 2) As the almost all cars made in China have equipped with the engine management system (EMS), market growth for power control systems has slowed down, and surpassed by the device market for chassis control systems for the first time, indicating the further improvements in overall performance of cars made in China. On the other hand, market for the automotive information systems such as auto-sound equipment and car navigation systems have been gaining market share, due to the increase of attractive new products.

Figure 1 Automotive electronic device market size and growth rate in China [source: CCID Consulting, January 2007]	Figure 2 Market segments by application in China(2006)

Safety systems to prevail in China
The growth rate attained by the electronic device market for cars in 2006 was higher than that of automobile production in China. In terms of the ratio of electronic devices occupied in the total production cost of an automobile, passenger vehicles is much higher than commercial vehicles. Thus the increase in passenger vehicle production gives significant impact on the expansion of electronic device market for automobiles. The production of passenger vehicle in 2006 reached 3.83 million, surpassing 50% of total automobile production for the first time. Further, passenger vehicles made in China have been incorporating the increasing number of electronic devices in recent years. There were more than 100 models of new cars introduced in 2006, and the most of them equipped with the increased number of electronic devices with better qualities than those for
their previous models. In China, conventional automotive electronic devices are still playing the important role for the market expansion. Almost all cars made in China equipped with EMS in 2006, and the chassis control and safety systems such as ABS and airbags were making significant inroad into the cars made in China. It is said that 80% of the cars made in China are now equipped with ABS, electronic brake dividing systems(EBD), and airbags. The number of cars that installs traction control system, brake assist system (BAS), and engine speed sensor (ESS) are increasing
rapidly these days. (Table 1) On the other hand, automotive information systems have been keeping fast growth rate in recent years, and increased 45% in 2006. Those are eventually consisted of auto-sound equipment and car navigation systems. Although the auto-sound equipment are widely installed, upgrading trends are conspicuous in this field by incorporating CD
players and MP3 players. (Table 2) In addition to the Japanese manufacturers that have led the car navigation market expansion, Chinese manufacturers such as Chery and Geely are also strengthening marketing of these systems. Personal navigation devices (PND) are also attracting attentions of consumers.

	Table 1 Installation rate of chassis control/safety systems in passenger vehicle made in China Table 2 Installation rate of auto-sound equipment in passenger vehicle made in China (2006)
Figure 3 Automotive electronic device market prediction

Basic electronic devices are in place
After the past few years of market expansion, almost all of the Chinese cars are equipped with not only the basic electronic devices such compulsory equipment as gauges and meters as well as auto-sound, but also power and chassis control devices relating to safety standard and environmental protection. It is expected that Chinese automotive electronic device market would
reach 240 billion yuan in 2011, largely due to the continuous expansion of the Chinese automobile market with the increasing number of passenger vehicles, which would continue to incorporate more electronic devices every year.

(Li Shuchoung, CCID Consulting)