Need to Improve Road Safety Fuels Usage of Advanced Driver Assistance Systems in Top Gear
According to Organisation for Economic Co-operation and Development (OECD), there were nearly 1.75 million road accidents in 2015 and 37,150 deaths recorded due to road accidents in 2017. The average age group that is observed to be the victim of such accidents is 15-30. According to Centers for Disease Control and Prevention, US (CDC), in the year 2018, over 7,700 older adults (aged 75+) were killed due to road accidents and more than 2,50,000 were admitted to emergency departments due to the same. Such a high death rate is primarily due to an increased vulnerability to injury in an accident.
Decline in cognitive functioning and vision affects the driving abilities of older adults. To avoid such road accidents, which may lead to deaths as well, advanced driver assistance systems (ADAS) are installed. Some of the most sought-after applications in ADAS market include traffic sign recognition, blind-spot detection, automatic emergency brakes, and pedestrian avoidance.
Increased Awareness about Safety among Vehicle Owners and Intensifying Regulatory Scenario Boost ADAS Adoption
The government of multiple European countries have stringent safety regulations in order to prevent road accidents as much as possible. For instance, the European Union (EU) is making it mandatory for new vehicles to have certain ADAS features such as automatic emergency braking, by 2022. These stringent regulations have boosted the demand for ADAS. Installation of automatic emergency brakes (AEBs) becomes important to prevent fatalities and injuries which could not have happened if brakes were applied. For instance, on 5th March 2021, a vehicle collided with a sheriff’s cruiser in Waterloo while the driver looking for his cell phone while driving. Such distractions during driving may cause severe injuries or possibly death of the people nearby. Installation of an AEB in the vehicle would have prevented such an accident, thereby, preventing the loss faced by both parties.
With an increase in awareness about driver’s safety and decreasing installation costs associated with cameras and radar, the ADAS market is experiencing a boost in demand. Moreover, in order to achieve higher safety ratings, Original Equipment Manufacturers (OEMs) have been adopting ADAS solutions. ADAS, therefore, is seen to be a differentiating factor and is expected to become one of the main sources of revenue in the near future. For instance, the adaptive cruise control feature is called Intelligent Cruise Control by Nissan and DISTRONIC by Mercedes.
ADAS features were first introduced in luxury cars as an option. Brands such as Mercedes Benz, have built-in ADAS features now. Besides this, the standard of living and consumer spending on automobiles have improved exponentially, resulting in shifting consumer preferences towards premium auto components. This change has further led to an increase in the demand for better products, which boosts the demand for luxury cars. With soaring demand for luxury cars of Mercedes-Benz, Audi, and other premium automakers, adoption of ADAS is also growing significantly.
Despite being expensive, the sales for ADAS are increasing due to an increased commutation to work due to hub spoke architecture developed between the rural, suburb, and urban areas. Easy availability of financial schemes such as Buy Now, Pay Later by Mahindra are also significantly responsible for increased sales of vehicles which in turn accelerate the advanced driver assistance systems market.
Relative Lack of Awareness about ADAS Dampens Market Growth in Developing Regions
While the demand for ADAS is increasing, the market continues to face the setback posed due to the relative lack of consumer awareness in developing and underdeveloped countries. People who buy a vehicle are usually unaware of what ADAS is or how ADAS functions. This lack of awareness prevents them from buying additional ADAS systems which in turn dampens the demand for ADAS. For instance, on February 20, 2020, a Volvo crashed into a lorry near Coimbatore, Tamil Nadu (India), killing 20 people and injuring more than 15. An AEB would have helped and prevented such a fatal accident. Moreover, ADAS is expensive and only present in premium vehicles, which further declines the scope for awareness in common or middle or lower-income people. The aftermarket prices are also high, and continue to soar.
Lack of adequate infrastructure also hampers sales of ADAS to a large extent. For proper functioning, ADAS requires specific infrastructure that includes well-built roads, availability of GPS for high efficiency, trained and disciplined driving, and skilled labour. Developing countries such as India, however, fail to provide such an adequate infrastructure that acts as a restraint in the market for ADAS.
There was a halt in the production of ADAS during the pandemic which dampened the sales of a wide range of auto components, including ADAS. Unavailability of raw materials, decreasing disposable income of consumers, and falling sales of cars have further led to slow growth of the market over the recent past.
While ADAS aims at preventing road accidents and deaths, ADAS features continue to face restriction due to malfunctioning. ADAS features such as emergency braking systems and lane detection signals might not function properly which will in turn negatively impact the progress of the ADAS market.
Emergence of Semi-autonomous Vehicles Presents an Opportunity for Manufacturers and OEMs in ADAS Market
ADAS has helped immensely in reducing the intricacy of driving with the help of features such as pedestrian detection, emergency braking, and stability control. Semi-autonomous vehicles depend on technologies such as radars, high-definition cameras, and ultrasonic sensors to collect information. Consistently increasing demand for semi-autonomous vehicles enables OEMs to install more control features and safety systems in their new vehicles. Companies such as Ford, Tesla, General Motors, and Volkswagen have recently announced the launch of fully autonomous vehicles in the forthcoming years.
Expanding Fleet and Vehicle Parc Solidify Asia Pacific’s Position in Global Market, Adoption of Advanced Auto Technologies Soars
The ADAS market is largely driven by Asia Pacific, predominantly because of the increased use of advanced technologies and high vehicle production in fast-developing countries such as Japan, China, and South Korea. Production plants of many leading companies such as General Motors and Volkswagen have also been shifted to developing countries due to reasons such as cheap labour, low capital investment, and easy availability of raw materials. Despite a significant dip in ADAS sales due to the pandemic situation, the prevailing safety mandates act as a booster for the market. For instance, the Government of China has made it mandatory to install Tire Pressure Monitoring System (TPMS) in vehicles from the year 2019.
The Ministry of Road Transport and Highways, India, has planned the adoption of ADAS features by the year 2022. The features include automatic emergency braking and electronic stability control. The Ministry of Land, Infrastructure, Transport, and Tourism (MLITT), Japan, has announced plans in order to mandate automatic emergency braking for all new passenger cars by 2021. Similarly, the United States and the European Union are making it mandatory for all vehicles to be equipped with various ADAS features, by 2022. The features include advanced emergency braking, emergency stop signal, accurate tire pressure monitoring system, drowsiness and attention detection, and lane-keeping assist.
Passenger Vehicles Account for Lion’s Share in Global ADAS Sales
With an increase in urbanization, there has been an increase in the sales of passenger vehicles over the past decade. Urbanization has not only improved the standard of living but also made people aware of the various features of ADAS that are responsible for reduced chances of road accidents. Ever-mounting sales of passenger vehicles boost the demand for ADAS features.
Moreover, authorities in many European countries have introduced regulations such as the Vision Zero, an initiative that aims at reducing injuries and deaths caused by road accidents by 50% towards the end of 2030, in addition to aiming at zero deaths due to road accidents by the year 2050. Such countries have planned to mandate the use of ADAS features such as automatic emergency braking and lane departure warning by the year 2022. In January 2019, South Korea also mandated the use of automatic emergency braking and lane departure warning for all new passenger vehicles. Such regulations have thus escalated ADAS installations in passenger vehicles.
Key Market Players Invest in Expansion and Launch of Innovative ADAS Features
The market for ADAS is led by companies such as Continental AG, Valeo, Aptiv, Magna International, and Robert Bosch GmbH. To sustain their market position, these companies have adopted strategies that include contracts & agreements, collaborations, and new product developments.
For instance, Continental AG had announced a new production plant for ADAS in Texas to manufacture radars, in February 2020. The plant had an investment of $109 million for the next three years. Similarly, in August 2019, they launched a new system solution for safer automated driving. It had developed a camera system comprising of an inward-looking infrared camera as well as an outward-looking camera.
In February 2020, Veoneer supplied active safety systems based on radars and next-generation vision. The system was developed to provide driver assistance features such as highway assist, stop and go adaptive control, traffic sign recognition, and automatic emergency braking, and to meet The European New Car Assistant Programme (Euro NCAP) 5-star safety rating.
Please Note: The above mentioned segmentation/companies/countries are likely to differ in the actual report as they are based on preliminary research.