With the automotive industry increasingly transitioning from a mechanical to an electronic era due to rapidly rising demand for entertainment, safety and under-the-hood electronics, automotive electronics is emerging as one of the most exciting areas in the industry today.
New analysis from Frost & Sullivan EMS Opportunities in the North American Automotive Industry, reveals that electronic manufacturing service (EMS) revenues in this industry are likely to grow from $1,047.4 million in 2005 to $31,08.8 million in 2012.
If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants an overview of the latest analysis of the EMS Opportunities in the North American Automotive Industry, then send an e-mail to Tori Foster, Corporate Communications, at tori.foster[.]frost.com with your full name, company name, title, telephone number, fax number, and e-mail address. Upon receipt of the above information, an overview will be sent to you by e-mail.
Simultaneously, the trend toward outsourcing certain key operations to benefit from technical expertise as well as cost effectiveness is gaining ground in the automotive industry and creating plentiful opportunities for EMS providers. Original equipment manufacturers (OEMs) and tier one suppliers are realizing the advantages of automotive outsourcing at a time when the electronic content in cars is expanding and expected to continue doing so.
“The increasing amount of electronic content and continuous technological advancements are acting as major incentives for OEMs and tier one suppliers to outsource to EMS providers,” remarks Frost & Sullivan Research Analyst Lavanya Ram Mohan. “Thus, the automotive industry, which was once a niche segment, has developed into a full-blown profitable market offering largely untapped opportunities to these providers.”
The North American opportunity for EMS providers is likely to increase at a compound annual growth rate (CAGR) of 16.8 percent. Of the three major categories of automotive electronics – infotainment, safety, and others such as powertrain, body/chassis and navigation – infotainment is currently experiencing the highest demand. Revenues in this category are likely to grow at a CAGR of 17.8 percent. Safety electronics will witness greater demand as the focus on safety increases and governments pass various mandates to this effect.
Despite the numerous opportunities that lie ahead, EMS providers could face considerable challenges in penetrating the highly demanding automotive industry. OEMs place great emphasis on exceptional quality and zero-defect production lines, compelling EMS providers to achieve the same. However, maintaining such high levels of quality for products manufactured in massive quantities is likely to be a difficult task for these providers.
Again, EMS providers tend to underestimate the exacting nature of the automotive industry, which is considered one of the most difficult areas to break into. They often fail to realize the complexity and responsibility that comes with contracts to manufacture automotive electronics.
“If EMS providers learn the strategies and techniques that will help them penetrate the automotive industry, they can look forward to plentiful opportunities to capitalize on,” says Ram Mohan. “Growth in this industry is a continuous journey and successful EMS providers are likely to enjoy long-term contracts, with a fairly stable demand from consumers.”
EMS Opportunities in the North American Automotive Industry, part of the E&S Subscription, provides an overview of EMS opportunities within the automotive industry along with revenue forecasts, analysis of key drivers and restraints, impacts of major industry challenges, competitive analysis, as well as various trends affecting growth opportunities. This study includes research in the following markets: infotainment electronics; safety electronics; and others such as powertrain, navigation and body/chassis electronics. Interviews are available to the press.
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.
EMS Opportunities in the North American Automotive Industry