The latest figures provided by the global research firm TrendForce show that car sales in the US for 2019 are projected to slide by 3% YoY. China’s car sales for the same year are also projected to drop by 7% YoY. The ongoing trade dispute between the US and China has taken a serious toll on the global automotive market, which is now facing a continuous decline in sales. Now struggling under a negative market cycle, major car makers have proceeded to cut costs through layoffs. On the other hand, they are also directing more of their resources into developing functions pertaining to advanced driver assistance systems (ADAS) and automated driving systems (ADS) for their upcoming vehicle models.
Caroline Chen, TrendForce analyst for the global automotive market, pointed out that the automotive industry has entered a major transformational period, where vehicles themselves are undergoing revolutionary technological changes. “The automotive supply chain, which was previously very much closed off to new entrants, is starting to open up for non-traditional players,” said Chen. “For instance, companies in Taiwan’s well-established ICT supply chain now have a golden opportunity to venture into the automotive market and carve out a niche for themselves.”
Traditional suppliers can also ride on this wave of changes and climb up the value chain. “Again, looking at Taiwan, there are parts suppliers that have the potential to leave the aftermarket and become manufacturers of factory-installed products,” said Chen. “They can make this transition by offering new functions with low market penetration in vehicles. The emerging areas where suppliers can make significant contributions include electric vehicles, smart cockpit, ADAS, and ADS.”
According to Chen’s further analysis, ADAS technologies for safety-critical operations constitute a strong selling point for new vehicle models. Moreover, the New Car Assessment Programs (NCAPs) of the US, China, and Europe have included more and more ADAS subsystems into their review benchmarks. This, in turn, has led to the diffusion of ADAS technologies from the high-end to the mid-range segment of the vehicle market. At the same time, consumers have gradually familiarize themselves with how and when to use driver assistance functions.
However, Chen also stressed that mandatory regulations instituted by government agencies worldwide are ultimately the main force that drives the market penetration of ADAS. Take autonomous emergency braking (AEB) as an example. The adoption of this particular active safety system is expected to become widespread in the near future as the regulatory bodies in the EU, Japan, and the US have all decided that it must be a standard feature for new vehicle models by the 2020-2022 period.
As for the highly anticipated self-driving technologies, they have already started on the path of commercialization this year; and their deployment will expand noticeably in 2020. In the near future, most of the self-driving vehicles will be commercial vehicles operating under the business models of taxi/ride-hailing services, trucking/logistics services, and closed-loop transportation networks.
Chen noted that both ADAS and ADS require various types of sensors for detecting obstacles on the road. Thus, the number of sensors in a vehicle will increase in tandem with the rising demand for driver assistance and self-driving functions. Among the various sensors installed in vehicles, the millimeter-wave radar (mmWave radar) is central to the operation of many subsystems. TrendForce currently forecasts that the total quantity of mmWave radar modules installed across all vehicles worldwide will increase by 15.8% YoY in 2020.