Automakers hungry for everything electronic
By Staff -- Purchasing, 7/16/1998 2:00:00 AM
Buyers at the nation's automakers will need to start paying more attention to microchips, drams, and electronic connectors.
According to a new study from The Freedonia Group, demand for automotive electronics will climb more than 7% per annum to nearly $30 billion in 2002, far outpacing demand increases for most other light-vehicle components.
The study, "OEM Automotive Electronics in North America," says the most-wanted electronic components will be those used in safety and security applications, such as head-up displays and collision avoidance systems. OEM demand for these types of electronics will climb more than 11% per year to $12 billion in 2002.
Freedonia researchers expect future demand for these type of components to be even greater as on-board intelligent transportation systems move from high-performance and luxury vehicles to more modest car and truck models. In the interim, electronic components will find their way into entry-level vehicles through keyless entry, anti-theft, and intelligent air-bag systems, which are becoming standard amenities on most cars and trucks.
New on-board navigation and instrument devices, such as the OnStar mobile communications system available in some of General Motors Corp.'s more expensive sedans, will also drive up demand for automotive electronics.
Despite high demand, prices for automotive electronics will remain relatively flat. The Freedonia report says price increases for most automotive electronics is to remain quite modest due to "an intensely competitive business environment and technology-driven performance/price upgrades."
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