Integration Holds Key to the Future of European Commercial Vehicle Safety Systems Markets

LONDON, November 2 -- Driven by the introduction of new active safety systems and their rising penetration into commercial vehicles, the total market for the European commercial vehicle (CV) safety systems will rise from an estimated 390.5 million euros in 2004 to just over 406.2 million euros in 2012. The future of the market will depend on the successful integration of various active and passive safety systems.

Active safety systems products are presently in the growth/product development phase, while products in the passive safety systems market are comparatively mature. Also, the relative safety benefits achieved by introducing a new active safety feature are higher than that achieved by improving existing passive safety features.

Therefore, overall revenue growth will be powered by active safety systems. Comprising vehicle stability control (VSC) systems, driver warning and information systems (DWIS) and collision avoidance (CA) systems, revenues of the active safety systems market will grow steadily from an estimated 365.9 million euros in 2004 to 382.2 million euros in 2012.

VSC will retain its position as the principal revenue contributor to the active safety systems market, accounting for over 90 per cent of revenues in 2012. With projected compound annual growth rates (CAGR) of 61.6 and 51.9 percent respectively over 2004- 2012, the most dynamic segments will be that of the nascent DWIS and CA systems.

Although the active safety system market is currently dominated by pioneering suppliers, competition will intensify following the entry of numerous tier 1suppliers. Among current participants include Knorr-Bremse, WABCO, TRW Automotive and, Iteris, Inc among others.

Valued at 24.6 million euros in 2004, the total market for passive safety systems will decline marginally to 23.9 million euros in 2012. Aggressive competition and the shift in production to low-cost countries have resulted in severe price attrition. While seatbelts have become commoditised, the lack of product differentiation has allowed vehicle manufacturers to source the most economical components.

Current efforts are focused towards refining the performance of existing seatbelts and airbag systems. However, with seatbelts having 100 per cent market penetration, growth is likely only for driver airbags with volumes set to almost double over the period 2004 to 2012.

At present, suppliers in the European CV safety systems markets are concentrating on individual safety system solutions. However, the future of safety systems will hinge on greater systems integration. This will result in improvements in specific corrective/preventive functions, thereby promoting overall safety and the ultimate move towards autonomous driving.

"The integration of safety systems is a step towards autonomous safety system development," remarks Karthikeyan Vijakakumar, Automotive Analyst with Frost & Sullivan (http://transportation.frost.com). "Integration benefits will go beyond the obvious improvement in safety. On a system level, the sharing of sensors and electronic control unit (ECU) will distribute the costs, and hence, reduce the cost of individual features."

VSC, CA and DWIS suppliers will work closely in the lead up to integrated safety devices. The first major step in the introduction of integrated safety systems will be the development of the emergency brake assistance system, which involves the integration of the braking system with the CA system and will likely be ready for production before the end of 2007.

Among vehicle manufacturers, Mercedes-Benz, MAN and Volvo Trucks will be at the forefront both in terms of introducing these features and in achieving the highest installation rates for them among their new commercial vehicles. Moreover, due to the widening installation of safety features in long-haulage trucks, the above 16 tonnes trucks will have a higher safety system penetration.

Cost consciousness of fleet owners will compel suppliers to focus on developing cost competitive solutions. "This can be achieved through building competence through partnerships. For instance, chassis systems manufacturers can partner with collision avoidance suppliers and passive safety suppliers," says Mr. Vijayakumar. "Shifting to low-cost locations for manufacturing commoditised products can also aid in reducing manufacturing costs."

"Suppliers of growth phase products such as the VSC systems should focus on high-volume segment manufacturers, and suppliers of development phase products should focus on premium segment manufacturers," he adds.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest analysis of the Strategic Analysis of the European Commercial Vehicle Safety Systems Markets, then send an e-mail to Magdalena Oberland - Corporate Communications at magdalena.oberland@frost.com with the following information: your full name, company name, title, telephone number, e-mail address, city, country and source of information. We will send you the information via email upon receipt of the above information.

Title: Strategic Analysis of the European Commercial Vehicle Safety Systems Markets

Background

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community, by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.

List of key words in this press release: active safety systems, commercial vehicle (CV) safety systems, passive safety systems, vehicle stability control systems, VSC, driver warning and information systems, DWIS, collision avoidance systems, CA, Knorr-Bremse, WABCO, TRW Automotive, Iteris, Inc, seatbelts, airbag systems, autonomous driving, autonomous safety system, electronic control unit, ECU, sensors, emergency brake assistance system, braking system, Mercedes-Benz, MAN, Volvo Trucks, long-haulage trucks,

List of key industry participants: ZF Friedrichshafen AG, Beru AG, Wabco, Valeo, TRW Automotive, Siemens VDO, Knorr-Bremse, Iteris, Inc., Hella KGaA Hueck & Co, Delphi Technologies, INC., Autoliv Inc., Voith AG, Volvo Trucks Group, Scania, MAN Trucks, TRW Autocruise, IVECO, DaimlerChrysler, Takata-Petri, DAF Trucks N.V.