Automotive Electronics Market Size

Automotive Electronics Market Size

Automotive Electronics Market size was valued at USD 312.9 Billion in 2023 and is anticipated to register a CAGR of over 8.9% between 2024 and 2032. The rising awareness of road safety due to increasing accidents worldwide are driving the electronic component demand in vehicles. These components are used in several comfort & safety systems, such as ADAS, lane keeping & control systems, platooning & connected vehicles, and aid drivers in night driving. Increasing accidents due to driver negligence and unavoidable night driving situations such as drowsiness have resulted in the need for developing solutions in recent years.

Therefore, leading automakers are focusing on developing enhanced driver assistance, accident safety & in-vehicle comfort systems. For instance, in March 2022, Uhnder, a LiDAR technology provider for ADAS, launched the industry’s first 4D digital imaging radar for next-generation ADAS. The product facilitates next-generation ADAS & automated mobility applications with better accuracy and an enhanced sense of standing or moving objects at short & long distances.
 

The surge in automobile production is a major driver of the automotive electronics market, as it directly correlates with the increased integration of advanced electronic systems in vehicles. As manufacturers strive to meet growing consumer demand and differentiate their products, the inclusion of sophisticated electronics such as infotainment systems, advanced driver-assistance systems (ADAS), and power management systems becomes crucial. This trend is amplified by the rise of electric vehicles (EVs) and the shift towards more connected, autonomous driving technologies, which require advanced electronic components to function efficiently.
 

Furthermore, evolving safety regulations and consumer preferences for enhanced in-car experiences are pushing automakers to adopt cutting-edge electronics, thereby fueling market growth. The combination of these factors, driven by the broader surge in automobile production, is propelling the automotive electronics sector to new heights. For example, according to The European Automobile Manufacturers’ Association In 2022, 85.4 million motor vehicles were produced around the world, an increase of 5.7% compared to 2021.
 

The high costs associated with advanced driver assistance systems (ADAS) serve as a significant restraint on the growth of the automotive electronics market. While ADAS technologies, such as adaptive cruise control, lane departure warning, and automatic emergency braking, offer substantial safety and convenience benefits, their integration into vehicles involves expensive components and complex engineering. This drives up the overall cost of vehicles equipped with these systems, making them less accessible to cost-sensitive consumers, particularly in emerging markets.
 

Additionally, the development and validation of ADAS technologies require extensive research and testing, further contributing to their high price tags. As a result, the high costs can slow down the widespread adoption of ADAS, limiting the growth potential of the automotive electronics market despite increasing demand for advanced vehicle features.