Frost & Sullivan's Strategic Analysis Of The Active And Passive Safety Systems Market In Europe

Active Safety Systems To Power Expansion Of European Passenger Car Safety Systems Market

The flood of innovations to improve the safety of passenger cars has not only created a plethora of opportunities for vehicle manufacturers and suppliers across Europe, but has also raised a number of challenges ranging from accountability to affordability and profitability.

A unique, strategic analysis on passenger car safety systems by Frost & Sullivan(http://www.transportation.frost.com)reveals that vehicle manufacturers face a major challenge as new vehicle buyers are less willing to pay for safety features as they expect safety to be guaranteed. This challenge has been compounded by inconsistencies in the level of customer awareness on the benefits of new safety systems, particularly, active safety systems. 

"Despite multiple challenges, the market for active safety systems is expected to make giant strides between 2004 and 2010 - primarily in the area of vertical stability of vehicles," says Frost & Sullivan Industry Analyst Anil Valsan. "Additionally, the introduction of sophisticated driver warning and information system (DWIS) is likely to form the foundation for more advanced collision avoidance systems."

A key challenge for market participants has been the lack of standardisation among the various DWIS and collision avoidance systems, resulting in the escalation of manufacturing costs and hence the pricing of features. This has made it difficult for vehicle manufacturers to introduce new active safety features across a wide range of vehicle segments. Consequently, the features are likely to be first introduced in the premium, low volume vehicle segments before migrating to the lower vehicle segments.

Besides these, the absence of legislation detailing the responsibility of vehicle manufacturers in the event of a system failure has made them cautious about marketing and selling these features, specifically on their safety benefits.

The Frost & Sullivan study forecasts that the next significant leap in the area of vehicle stability systems will come only with the integration of the steering, braking and suspension systems in the vehicle. Electronic stability control (ESC) systems are likely to be progressively integrated with the steering and suspension systems. Apart from their role as stability systems, they are expected to provide a significant amount of information to the network of passive safety systems in the vehicle.

ESC and anti-lock braking systems (ABS) are anticipated to continue as the largest revenue contributors to the active safety systems market. While market penetration of ABS is expected to touch 100 percent across all vehicle segments by 2005, the number of vehicles installed with ESC is also set to grow significantly between 2003 and 2010. However, the penetration of ESC systems is likely to take much longer, as even today a number of vehicle manufacturers make this feature available primarily for driving comfort rather than for safety benefits. 

"As a result, manufacturers with sales skewed towards the premium vehicle segments have found it easier to introduce the ESC feature in their models whereas the volume manufacturers such as Ford, Renault and PSA have been slow followers," explains Mr. Valsan.

The ESC feature is seen as a major product differentiator, particularly in the Executive 1 (Mercedes-Benz E-Class, Jaguar X-Type etc.), Medium (BMW 3-Series, Mercedes-Benz C-Class, Ford Mondeo, Volvo V40 etc.), and Compact (Fiat Stilo, Alfa Romeo 147, Mazda 3, Peugeot 307, Renault Megane etc.) vehicle segments.

Although vehicle manufacturers are excited about the potential of the active steering feature, the cost of the system will allow its introduction only in the Medium, Executive 1 (which includes the BMW 5-Series, the only model with the feature currently) and Executive 2 (Mercedes-Benz S-Class, BMW 7-Series, VW Phaeton, and Audi A8) vehicle segments between 2003 and 2010.

The fastest long-term growth is likely to be registered by the blind spot warning/lane change assistant and the lane deviation warning/lane keeping systems, followed by the active steering and adaptive cruise control (ACC) systems. 

"While active safety systems are either in their growth phase or product development phase of their lifecycle, most of the passive safety system products (such as front airbags and seatbelts) have reached the maturity stage and only new products (such as curtain airbags) are now reaching the growth phase," says Mr. Valsan.

Accordingly, Frost & Sullivan's analysis projects that the growth in total revenue will be driven by active safety systems over the 2003 to 2010 period, with passive safety systems registering only marginal annual growth - 0.8 per cent - during the same time frame.

In the area of passive safety, the objective today is not survival, but the reduction of the seriousness of injuries inflicted on the occupant. Current efforts within the passive systems market have aimed at improving the performance of existing seatbelts and airbag systems, and introducing new features to reduce the level of injuries sustained by the occupant. The main challenge for participants while introducing further occupant protection systems in vehicles will, however, be the need to comply with the European New Car Assessment Programme (EURO NCAP) ratings. 

Curtain airbags and front side airbags are likely to be the key contributors to revenue growth in the passive safety systems market. While front airbags and seatbelts are expected to register only marginal revenue growth due to falling unit prices and their standard availability across almost all passenger cars, curtain airbags are likely to register robust growth owing to their rapid adoption across vehicle segments.

Frost & Sullivan believes that over time, the integration of active and passive systems will be essential not only to enhance the all-round functionality of safety systems, but also to bring down the cost of the individual features and facilitate the sharing of components between different systems.

"The process of integration is likely to happen as a continuous evolution rather than in distinct phases and will primarily be achieved by using more sophisticated in-vehicle networking solutions to connect various safety systems," concludes Mr. Valsan.

If you are interested in a summary of this research service providing an introduction to the European Active and Passive Safety Systems industry, please send an email to Kristina Menzefricke, Corporate Communications, at kristina.menzefricke@frost.com with the following information: full name, company name, title, contact telephone number, email. Upon receipt of the above information, the summary will be emailed to you.

Title: Strategic Analysis of The Active and Passive Safety Systems Market in Europe
Code: B243

Background

Frost & Sullivan, an international consultancy firm, has been supporting clients' growth for over four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes strategic consultancy, market intelligence and management training. Our mission is to work with our clients' management teams to deliver market insights and to create value and drive growth through innovative approaches. Frost & Sullivan's network of more than 500 consultants, industry experts, corporate trainers and support staff spans the globe with 19 offices worldwide.

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