Impact of COVID-19 on the Global Automotive Electronics Market
Automotive electronics are electronic systems that are used in vehicles to enhance the performance of various electronic parts that improve the efficiency of the in-vehicle entertainment devices and the vehicle itself. These automated systems are used for airbags, radio, electronic fuel injection, in-car entertainment systems, advanced driver assistance systems, and the ignition, among others. The COVID-19 pandemic has severely impacted the automotive industry across the world. The disruptions in supply chain activities, the interruption in large-scale manufacturing, restrictions on travel, and the declining sales of light vehicles during the Q1 of 2020, are responsible for the declining growth of the market. Besides, the U.S.-China trade war and the current crisis in the U.S. caused by the pandemic are also affecting the demand for vehicles. China is a global manufacturing hub for the export of power electronics for electric cars and electric motors. The halt in the export of raw materials from China and disruptions in the supply chains are profoundly impacting the market growth.
The key participants are investing heavily in R&D activities to develop advanced products, which is expected to fuel market growth. Besides, the rising demand for fuel-efficient vehicles that feature entertainment devices is also estimated to create an opportunity for new entrants in the market. However, the global spread of the pandemic is expected to have a significant impact post the lockdown period, and companies are expected to face challenges such as revenue losses, unavailability of the workforce, and unavailability of raw materials. The halted automotive production directly influences the revenue sales as well as the volume of electronic components, as more than 80% of automotive electronic components are incorporated during the production stage of the vehicle. The adoption of electronic components in advanced vehicles, post the lockdown, is expected to drive the market growth over the forecast period.
Global Car Production, by Country (Million)
Source: International Organization of Motor Vehicle Manufacturers (OICA)