In 2006, power and chassis control systems and safety systems respectively accounted for 28.5% and 29.2% of China's automotive electronics market. During the year, EMS realized its penetration among homemade autos and the market demand slowed down. However, EMS upgrading played an active role in promoting the growth of the EMS market. By comparison, the chassis control system upgrading was much faster after basic penetration had been achieved. In addition to simple ABS, more and more chassis safety and stability systems have been used in automobiles. Diversified, complex and intelligent chassis systems have become the main trend in product evolution.
This trend was extremely obvious in China's automotive electronics market in 2006. For example, ABS+EBD configuration had achieved a penetration of over 80% in homemade cars. Diversified chassis products including traction control, brake assist and vehicle stability systems, which started to be used in homemade cars. In addition, safety air bags also had an equipping rate of over 80% among homemade cars in 2006.
On-board electronics continued to be a hotspot in China's automotive electronics market in 2006. The on-board electronics market grew by almost 50%. On-board electronics accounted for 17.5% of China's overall automotive electronics market, marking a rise over 2005. In the automotive electronics market, a pattern of 4 major competing blocks has formed. In the on-board electronics market in 2006, on-board sound systems accounted for the biggest percentage. Product upgrading is the most direct driving force for the growth of the on-board sound system market. High-end on-board CD-based sound systems have quickly replaced card-based on-board sound systems.
This is particularly the case in car products. In addition, the pre-installed GPS market was a flash point in the on-board electronics market in 2006. Driven by Japanese cars, the high-end on-board GPS market grew quickly. It also became one of the main driving forces for the growth of the on-board electronics market in 2006.
Industry and market grow fast together. Driven by China's growing automotive industry, the potential of the automotive electronics market has been quickly unfurled. To meet the needs of the domestic production of parts, all major automotive electronics firms have come to invest in China. The automotive electronics industry became a focus of many industries. After several years of fast growth, China's automotive electronics industry has attained a considerable size. In 2006, industry growth maintained its growth momentum. Industry size reached 80 billion Yuan, up by almost 40%. Foreign enterprises' product capacity shift to China and the rapid rise of local automotive electronics firms were the two most direct driving forces for the fast growth of China's automotive electronics industry.
Currently, indigenous automotive electronics firms have covered their products in almost all automotive electronics fields. In the on-board electronics field, indigenous firms have developed best. In such fields as automotive sound systems and portal in-board GPS products,
indigenous firms have become an important part of China's automotive electronics industry.
In terms of product structure, on-board electronics accounted for over 40% of China's automotive electronics industry in 2006. Driven by foreign vendors' production capacity shift and local vendors' fast growth, China's automotive sound system output topped 11 million sets (not including semi-finished products such as sound system cores). On-board GPSs (not including GPS mobile phones) output exceeded 5 million sets. The on-board electronics industry has become a pillar of China's automotive electronics industry.
China's automotive electronics industry will continue to maintain fast growth momentum. As for the whole electronic product manufacturing industry, thanks to the shift of global production capacity to the country and the growth of the local electronics industry, China has become a true "global electronic product factory." Compared with the consumer-level electronic product industry, automotive electronics is still in an early stage. But will China's automotive electronics industry follow the growth trajectory of other electronic product industries in the next few years? To answer this question, it is necessary to first sum up the development trends of China's automotive electronics market, industry, products and technologies in the next few years.
1. Technology will continue to mature and monopolies will eventually be broken. Since the automotive electronics market has been growing fast, numerous enterprises have also started to focus on the automotive electronics field. These include IC manufacturers, electronic product firms and parts producers. As more enterprises enter the automotive electronics product field and product performance improves, competition in the automotive electronics market will intensify. The pattern in which a few enterprises monopolize a certain product market will eventually be broken.
2. A huge domestic demand provides powerful support for industry growth. China's continuously expanding automotive electronics market itself is a driving force for the automotive electronics industry. Particularly in the past few years, local automakers have grown quickly. This has brought new opportunities to many indigenous automotive electronics enterprises. Numerous international IC manufacturers and automotive electronics firms have also started to tilt towards indigenous vendors. The growth of indigenous automakers has exerted certain price pressures on other foreign brand automakers and automotive electronics product suppliers. This has put forward higher requirements for them to produce their parts in China. This also implies that in the next few years, foreign automotive electronics firms will continue to shift their production capacity to China.
3. There are notable advantages in electronic product processing and manufacturing. The on-board electronics industry has come first. The more mature a technology is, the fiercer the market competition, and China will have more advantages in electronic product manufacturing and processing. Similarly, as automotive electronics product technology matures, more and more enterprises will compete in the field. "Made in China" will become a stronger product trend. Taking automotive sound systems as an example, almost all globally well-known auto sound system makers have set up a factory in China. In addition, local on-board sound system firms are growing quickly. Traditional home appliance enterprises in China have also entered the automotive electronics field by way of automotive sound systems. China is gradually becoming a global on-board sound system production base.
Li Shuchong, an analyst with CCID Consulting, thinks that in the next few years, China's advantages in automotive electronic product manufacturing will be put into further play. As technology continues to mature, such advantages will gradually expand from on-board electronics to vehicle body electronics and even the power and chassis control field, In conclusion, China's automotive electronics industry still offers huge growth potential. In the next few years, the automotive electronics industry will continue to develop at a rapid pace.
