[edit] Background

The Indian automotive electronics market is one of the most rapidly growing markets in the world today, and one of the fastest growing sub-sectors within the Indian automobile sector. The current size of the Indian automotive electronics market is estimated at approximately $2 billion. With electronics content growth in Indian automobiles expected to rise to 20 percent from the current 10 percent, industry sources estimate the market for automotive electronics to grow to approximately $3 to 4.5 billion by 2011.

[edit] Market Metrics

Increasing demands by Indian consumers for technologically advanced engine and control management systems, and superior safety systems have been the main drivers for the growth of the automotive electronics market. Stricter regulations on emission and competitive pressures in the growing automobile industry in India, are also forcing automotive manufactures to constantly upgrade on automotive electronics technology. The increasing emphasis on vehicle exports from India is also an important factor contributing to this trend. Emission norms for vehicles would be on par with European norms by 2010. Several government regulations, especially on safety, will be introduced in the next couple of years, and this is further expected to drive the growth of the Indian automotive electronics sector. The demand for automotive security systems is set to increase in the near future, and by 2010 many safety features such as car protection during collisions are likely to be standardized in the Indian automobile. The market for safety electronics is expected to grow at around ten percent annually over the next three to four years.

Engine management systems such as engine control units and fuel-injection technology, accounting for close to 50 percent of the power-train segment currently dominate the Indian automotive electronics market. The automobile entertainment segment in India is dominated by CD, MP3 players today with even DVD players being installed in Indian automobiles. In this modern age, driven by the growing demand from Indian consumers for added connectivity solutions to the traditional in-vehicle standalone audio and video systems, the overall automotive entertainment systems are like to see major changes.

With the opening up of the Indian economy, the old Indian automotive industry characterized by a few automotive models with a long delivery periods gave way to an extremely competitive and dynamic consumer driven market with technology, performance, fuel economy and reliability being the key drivers. The number of vehicles models available in India today is more than a hundred and newer and advanced models continue to be launched periodically. Auto-makers in India are fast increasing their investments on technology to achieve competitive advantage and differentiation to enhance consumer experience and satisfaction.

With the Indian economy growing fast and incomes rising, the automobile industry in India is growing rapidly at between 12-14 percent per annum. Due to robust economic growth, and rising income levels, global car manufacturers are increasing their focus on the Indian market with newer models. The current size of the Indian automotive electronics market is $2 billion, which according to industry estimates is expected to grow to approximately $3 - 4.5 billion by 2011 despite a highly price sensitive market that tends to be an obstacle to the growth of automotive electronic content in Indian cars.

Even though India is the fourth largest car market in Asia, fifth largest commercial vehicle manufacturer in the world, and the second largest two-wheeler manufacturer in the world, the average electronic content per vehicle in India is still much less as compared to the U.S. and other countries. Currently automotive electronic components penetration is high in electronic engine management systems, and media/audio systems; and fairly low in automatic transmission, safety systems, telematics, body electronics and immobilizer systems.

[edit] Opportunities

The import market for superior quality automotive electronics items is growing fueled by the increasing awareness and demand by Indian consumers for technologically advanced products. Following government initiatives towards enforcement of stronger safety and emission/environment norms, the automotive sensors and automotive body electronics segments, which represent less than 10 percent of the total automotive electronics market currently are expected to witness very high growth rates creating opportunities for suppliers. By 2015, the Indian automotive market would adhere to global norms. Once government initiatives on vehicle safety regulations are also implemented, rapid growth in the safety electronics segment is also to be expected, which offers opportunities for U.S. safety system manufacturers.

While automotive engine management and safety systems are to be the main market drivers for Indian automotive electronics, use of advanced digital instrumentation and electronic ignition systems is also on the rise.

[edit] Major Players

Major players in India for safety systems include Haryana-based, Sona Koyo Steering Systems Ltd. – a joint venture between Indian Sona Systems and Koyo Seiko company of Japan, and Chennai- based, Sundaram Clayton Ltd. of the TVS group; and Sony Electronics, and Pioneer Electronics in the automotive entertainment segment. Some of the of popular Indian automotive electronics equipment and service suppliers include Textek Electronics of Coimbatore; CG-CG Smith Software a part of KPIT Cummins Infosystems based in Bangalore, a leading software and systems serviceprovider for embedded applications for automotive electronics; and TACO Sasken Automotive Electronics also based inBangalore – a joint venture between Tata Autocomp Systems and Sasken Communication Technologies dealing in design, development of automotive electronic products in telematics, and infotainment. Other important automotive electronic component suppliers are: Veeyessar Industrial Products Pvt Ltd in Hosur; and Mico-Bosch, and Electronic Automation Pvt. Ltd. in Bangalore.

Global dealers such as Avnet of the U.S., and Arrow Asia, a subsidiary of New York-based, Arrow Electronics also have a fairly strong presence in the Indian automotive electronics market.

[edit] Prospective Buyers

The Indian car industry is far from being saturated providing scope for volume growth. Driven by the booming economic growth and rising demand, Indian car industry is attracting major car players from all around the world. All the major automobile and automotive component multinational corporations (MNCs) have operations in India – having either opened their manufacturing plants in India or are importing vehicles to cater to the huge Indian market.

Major MNCs include Suzuki, Toyota, Honda, Hyundai, Ford, General Automotive Motors, BMW, Denso, Delphi, Bosch, Lear, Johnson Controls, Visteon, Faurecia, TRW Automotive, and many more.

[edit] Sources

U.S. Department of Commerce

[edit] Related ResearchWikis

Automotive Aftermarket Marketing Research

Automobile Marketing Research