India’s automotive electronics market is expected to cross $18 billion by 2027 with a compound annual growth rate of 17 per cent from $6 billion in 2020, according to the latest research from Counterpoint’s Smart Automotive Service.
Automotive electronics sales will triple during the period, driven by rising income levels and increasing customer preference for in-vehicle digital experience, it said.
The automotive market has faced headwinds due to the ongoing Covid-19 pandemic. The country’s overall automotive sales declined 26 per cent year-on-year (YoY) in 2020.
But, Counterpoint estimates that the next six years through 2027 will see a strong boost in automotive sales. This growth will be mainly driven by the rising adoption of advanced connectivity experiences and electrification across automotive mobility segments.
“Passenger vehicles are expected to capture nearly two-thirds of the domestic automotive electronics market driven by the rising usage of telematics control unit, infotainment and other electronic components such as on-board diagnostics (OBD), electronic control unit and anti-lock braking systems,” Soumen Mandal, Research Analyst at Counterpoint said.
Telematics penetration remains low compared to global standards. However, rising awareness about advanced safety and communication services, coupled with more embedded connectivity service offerings by automakers, will drive this market, he said.
“Head-up display (HUD), blind-spot monitoring system, auto-dimming mirror, advanced driver assistance systems (ADAS) and automatic transmission features remain mainstream features for premium segment cars (cars with an ex-showroom price of more than ₹11 lakh),” Mandal said.
Electronic components cost
The average electronic component cost per passenger vehicle is projected to reach nearly ₹2 lakh ($2,685) by 2027. Stringent regulations like Corporate Average Fuel Efficiency II and Bharat Stage-VI emission norms are also among the key drivers for rising electronic content in a car, the report said.
India’s two-wheeler market will also see increasing adoption of automotive electronics. Electric vehicle penetration in the two-wheeler segment was one per cent in 2020 but is estimated to climb to 15 per cent by 2027, driven by favourable government policies like Faster Adoption and Manufacturing of Electric Vehicles II and rising consumer awareness of the green technology. This adoption is higher in the low-speed two-wheeler segment currently, but it will increase in the high-speed segment in coming years.
The report further said that the electronics market in the commercial vehicle segment is projected to cross $530 million by 2027 due to the rising adoption of telematics and other new technologies like exhaust gas recirculation, selective catalytic reduction and on-board diagnostics II.