The automotive electronics market has taken a hit in 2009 due to a surge in demand for small cars, according to Strategy Analytics.
Chris Webber, vice president of Global Automotive Practice, said that, while some negative effect on profits will be felt by car makers in light of the lower margin on smaller cars, it is the electronic tier ones and semiconductor suppliers that are feeling the full impact of this temporary slowdown in electronics demand.
The firm said that global government incentive programs, most of which were for a fixed amount regardless of purchase price, have contributed to the one-time boom in the sales of smaller, lower-cost vehicles. Hence, a $2,000 discount is far more attractive on a $10,000 car than a $50,000 one.
“Whereas the period 2002 to 2008 saw a fairly linear rise in average Electronic Control Unit (ECU) content, from around $550 to $650, 2009 will stall at that level because of this unprecedented demand for small cars,” said Ian Riches, director of Global Automotive Practice, in a statement. “Future growth looks much better, as the market swings back to its long-term norms and increased electrification in the powertrain boosts electronic content."
Strategy Analytics is forecasting average content to hit almost $800 per car in 2013, he added. As a result, the firm said, the ECU market will exceed $63 billion by 2013.
In May, Strategy Analytics reported that the automotive electronics market would take until 2011 to exceed 2007 levels. The decrease in vehicle production and sales led the company to forecast a 15 percent drop to US$126 billion ($167 billion) in the value of automotive electronics systems installed in light vehicles in 2009. It followed a 3 percent drop in 2008.
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