Automobile sales reached a 14-year high of 1.3 million in November 2015, with companies such as General Motors, Toyota, Fiat Chrysler, Hyundai, and Nissan all reporting sales increases to Autodata Corp. According to U.S. News & World Report, American auto sales are on pace for a record-setting year after “exceeding expectations” throughout much of 2015.
Getting into Smart Cars
As it continues to grow, the auto industry is also branching out and extending its power into new industries. This year’s Consumer Electronics Show, for example, featured a selection of connected cars, with a record 10 automakers exhibiting at the event. According to the Consumer Electronics Association, 30% of U.S. households own vehicles that include communications, safety, or entertainment systems.
In one example of how electronics continue to merge with the auto industry, Broadcom recently added to its lineup of automotive Ethernet connectivity solutions. The company’s new BroadR-Reach® supports 100 Mbps transmission over a single pair unshielded twisted cable.
“It’s a next-generation chip that enables automakers to build smarter, more secure networked cars,” according to a Broadcom announcement.
Also in 2015, global consumer electronics manufacturer Samsung became the latest in a line of non-automotive companies to join technology giants such as Google, Amazon, and Apple in pursuit of smart vehicle business. Samsung announced that it would start making in-vehicle infotainment and self-driving technology, and that it’s also working with subsidiaries in the telematics, central information display, and head-up display fields.
By the Numbers
With the adoption of more and more safety assistant systems, automotive electronic systems will account for more than 60% of car costs in 2015, according to the
Global and China Automotive Electronics Industry Chain Report, 2015-2018. The report focuses on development status and trends of automotive electronics segments, covering nine fields: airbag, tire pressure monitoring systems (TPMS), advanced driver assistance systems (ADAS), in-vehicle infotainment (IVI), navigation & audio, automatic transmission, fuel injection, automotive lighting, and telematics.
As consumers pay more attention to car safety and comfort, the proportion of automotive electronic accessories will increase exponentially, according to the report, with the industry expected to exceed $300 billion (USD) in 2020.
“We are also seeing similar statistics and forecasts for future electronic growth in the auto sector,” says Joe Venturella, vice president, transportation business unit, for electronic components distributor TTI, Inc. He says growth isn’t limited to passenger cards, and that TTI’s business within the commercial vehicle segment as been “very robust” as more OEMs add safety, infotainment, and overall enhanced electronics to their vehicles.
Venturella says demand from TTI’s automotive customer base has been “very consistent” and that most of the firm’s key suppliers are running their manufacturing plants at full capacity.
“Procurement professionals should be cognizant of this because there is very little idle plant floor capacity for non-scheduled orders,” he points out.
Shoring up the Supply Chain
For a good example of the projected growth within the sensor market for automotive and commercial vehicles, Venturella points out that some higher-end passenger cars now have more than 30 different sensors onboard—with growth to greater than 50 sensors per vehicle projected in the next four to five years. Going forward, Venturella predicts another strong year of growth ahead in 2016.
For electronics buyers, Venturella recommends aligning with a channel partner that has “the supply chain tools and the willingness and resources to inventory longer lead time components in order to [accommodated] quick-change manufacturing schedules.”
