Market Trends of Automotive Ethernet Industry
This section covers the major market trends shaping the Automotive Ethernet Market according to our research experts:
Increased Demand for Advanced Driver Assistance System (ADAS) to boost the Market Growth
- It has been estimated that as the number of vehicles equipped with autonomous driving increases, automotive ethernet is expected to witness increased opportunities for growth. Autonomous driving heavily depends on HD maps with road-based information like lane sizes, crosswalks, and road signs. HD maps are built with data collected from sensors. Ethernet is needed to connect these components to maintain efficient data transfer and, therefore, will contribute to the growth of automotive ethernet.
- Currently, in the automotive sector, the introduction of MEMS associated with ADAS, the emergence of connected vehicles, and the technological advancements of infotainment and IoT equipment is leading to an increase in electronic control unit contents in automobiles. The growing adoption of IoT solutions in automotive provides growth opportunities to a wide range of highly connected modern ADAS and autonomous driving functions. Having vehicles connected to everything in their vicinity or Vehicle-to-Everything (V2X) is an essential step toward a connected network of autonomous vehicles. Ethernet compatibility advantages when connecting vehicles to smart infrastructure make it an essential vehicle part.
- According to the International Organization of Motor Vehicle Manufacturers (OICA), approximately 80 million vehicles were produced globally last year. With growing volumes of vehicles and the rising demand for safety features designed to avoid collisions and accidents, companies are offering technologies that alert the driver about potential problems. Many vehicle manufacturers highly adopt ADAS to provide customers with Emergency Brake Assist, Adaptive Cruise Control, Blind Spot Detection, Rear Cross-Traffic Alert, Traffic Sign Assist, Intelligent Lights, Intelligent Speed Assist, and Lane/Road Departure Alert.
- Government regulations revolving around safety and security are also major drivers for the growth of automotive ethernet. While many of these systems are embedded in current models of cars, some of them will become mandatory as they contribute towards road safety. For instance, in March 2019, the European Commission announced a new rule to make Intelligent Speed Assistance (ISA) mandatory for all newly manufactured light vehicles starting in the last year. Euro NCAP and the US NHTSA safety assessment are additional driving forces behind ADAS adoption, which include the availability and the performance of safety assistant systems in their ratings.
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Asia-Pacific to Witness Significant Growth
- Increased production of passenger vehicles is one of the major factors driving the market growth in the Asian-Pacific Region. Automakers like Mercedes-Benz, Ford, and Volkswagen are rolling out expansion plans in India to maximize manufacturing capacity and output and minimize the local market's supply-demand gap. With these plans, the Indian market for time-sensitive in-vehicle networking components will increase. Thus the automotive ethernet market is poised for strong growth through the studied period.
- With more original equipment manufacturers (OEMs) providing new connected car capabilities with each new model produced, the connected car market in India is seeing significant advancements. The market for vehicles with enhanced HMI features, more connected technologies, and the integration of advanced driver assistance system (ADAS) solutions has grown in response to rising consumer demands for comfort, convenience, safety, and security.
- Except for the base variation, most premium OEMs in India now include smartphone connectivity or embedded connectivity as a standard feature. In contrast, volume OEMs only include smartphones or embedded connectivity on mid- and high-end variants. The development of connected automobiles in the Indian market has been facilitated by consumers' growing awareness of connected car services and willingness to pay for pricier options.
- Faster GDP growth and highly aspirational Asian consumers are the two major growth drivers for most regions, such as China, India, Malaysia, and the other developing markets in Southeast Asia in the coming years. In terms of consumption of connected and autonomous vehicles, North America and Europe remain the prominent regions owing to the presence of significant players such as Marvell Technology Group Ltd and Broadcom Incorporated, among others, the high acceptance rate of advanced technology and increasing adoption of Ethernet in-vehicle networks for mainstream models.
- However, closure trends in India led the SIAM to estimate that nearly USD 280 Million per day was revenue loss for Indian automakers and component manufacturers amidst the pandemic. Significant players like Maruti Suzuki India, Hyundai, Honda, Mahindra, Toyota Kirloskar Motor, Tata Motors, Kia Motors, and MG Motor India have temporarily shut down their plants. The market is very likely to suffer from potential component supply chain disruption, leading to reduced sales and production of an automotive ethernet.
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