Small-car surge stymies auto electronics growth
Over the last decade, the electronic content of new cars has climbed steadily as features like navigation, satellite radio, MP3 and Bluetooth interfaces have become increasingly common, even on mainstream models. However, this year's recession combined with the dramatic slow down in overall sales has, at least temporarily, put the brakes on electronics growth. The market in many regions has shifted toward smaller, less expensive cars and buyers are selecting fewer options.
The average value of electronic control units has jumped from $550 to $650 between 2002 and 2008. If and when the economy recovers, the content is likely to start increasing again, especially as vehicle electrification becomes more prevalent. Not only will the powertrains and batteries need electronics, but the move to systems like electric power steering and air conditioning will also require ECUs.
Eventually, as all of these systems become ubiquitous, the value growth will again slow and then decline as a result of decreased costs of electronics.
[Source: Automotive News - Sub. req'd]
Reader Comments (Page 1 of 1)
Mark Kiernan 10:08AM (10/26/2009)
Volvo has developed a new system to make cars safer, i think many people would like to have this in their cars.
http://www.treehugger.com/files/2009/10/volvo-makes-car-that-brakes-for-kids.php
I think we need to move away from expensive electrons that work independently and more to central software that controls everything in the car. This would reduce costs to manufacturer as they would have a simple standard system to install. They could make money on upgrades also. Imagine a Linux system that controls the aircon, windows, the seats, the mp3 player, etc.
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Woodenbee 10:20AM (10/26/2009)
I dont agree with this, I was looking at a small car ad from the UK and it came standard with blue tooth, voice activated controls and all the other stuff you get on any decent cell phone these days, I dont buy it, Car companies pick and choose based on marketing, generally UK buyers dont like cruise control, whereas US buyers like it, but dont blame it on small cars, thats counterproductive and doesnt hold much water, the new Nissan Cube comes standard with some neat features
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Evan 11:02AM (10/26/2009)
"Small-car surge stymies auto electronics growth".
Why do small cars = basic cars? In Europe, you can get premium small cars, fully loaded with electronics like navigation.
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wincros 11:30AM (10/26/2009)
I agree. And why do fuel efficient cars have to be strippers filled with cheap plastic moldings?
Phil L. 1:49PM (10/26/2009)
Traditionally, Europeans have been willing to pay premium prices for well equipped, premium small cars. So they get a market full of such choices.
Americans traditionally view small cars as cheap cars, and haven't been willing to pay premium prices for them, even when well designed, built and equipped. So we have a market full of stripped-down choices or cheap cousins of their European relatives (this is for you, current US Ford Focus).
The difference in manufacturing expense between building a small car and a large car isn't as large the the US consumer perception in the difference of their value. The current economy is changing this perception gap (we'll finally get the Euro Focus!), but it's taking some time.