Automotive Electronics Market to be a USD 265 Billion Opportunity by 2018: Says Zinnov

BENGALURU, July 1, 2015 /PRNewswire/ --

The Overall Addressable Opportunity for Globalisation and R&D Services in Automotive Electronics Stand at 11.5 Billion USD  

Zinnov, a leading Management Consulting firm, today released an exclusive study on the Automotive Electronics R&D Services market in India, with a specific focus on Product Engineering Services. The study titled, "Automotive Electronics - Speeding on the Outsourcing Highway", pegged the market at approximately USD 200 billion. The total automotive electronics market of OEMs and Tier-1s stood at USD 204 billion in 2014 and is expected to reach a mark of USD 265 billion by 2018, it read.

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Class A (like Daimler, Audi, Jaguar & BMW) & Tier-1 (Bosch, Denso, Continental & Delphi) companies are major outsourcers in the industry today. Apart from Europe, the availability of large talent pool and the established R&D eco-system has made Bay Area (US), the R&D hub for automotive electronics. The Zinnov study brought to light that OEMs' major R&D focus areas are concentrated around advanced transmission systems, electric vehicles and hybrid vehicle technology. On the other hand, Tier-1s' R&D areas include ADAS, infotainment solutions and carrying out R&D on autonomous cars that are of hybrid version for creating a green environment. Additionally, it is witnessed that the number of embedded patents has grown up in the last 5 years along with the penetration of service providers in this space.

 Embedded Patents Filed by Top OEMs in past 5 years      ADAS - 23%

  Embedded Patents Filed by Top Tier-1s in past 5 years   ADAS - 25%

ADAS* - Advanced Driver Assistance Systems  

Talking about the growth opportunity, Sidhant Rastogi, Partner & Practice Head, Zinnov, said, "Advanced Driver Assistance Systems and infotainment systems will see increased outsourcing and larger deals can be expected in next two-three quarters. The opportunities for service providers will continue to open up as we move towards a more connected world."

The Zinnov study brought to light that European service providers address the larger on-shore outsourcing piece when it comes to automotive electronics, whereas Indian service providers address a market of USD 320 million of the automotive electronics outsourcing market. It added that automotive electronics contributes 46% of outsourcing deal value in auto industry and that 'Cockpit Electronics' was found to be the major outsourced sub-vertical in the recent past.

Talking about the emerging growth opportunity in ADAS, the study highlighted that Heads-Up Display (HUD), eCall Telematics and Lane Assist were the rapid growth areas. Outsourcing in mature activities will increase and OEMs will shift their focus on to adding new features to the mature activities. It also brought to light that Indian service providers have started to develop IP/Framework in the emerging and growing areas.

Last but not the least; it added that products will continue to climb the S-curve as OEMs realize ADAS as the differentiating factor and increase their R&D spend. It also recommended an attack plan for service providers, which said the following:

• ADAS is the differentiating factor: Analysis of OEMs spending activity shows that they will continue to increase R&D spend on emerging areas of ADAS as they realize that going ahead it is going to be the differentiating factor among them.
• R&D investment lags product maturity curve: Within Driver Assistance major R&D investment by OEMs, Tier-1 suppliers and consumer electronics companies will majorly be in the products that lie in emerging and growing zone of the S-curve.
• Building capability for emerging areas is the key: Service providers focus more on building frameworks/capabilities for the products which lie in the growing and emerging zone as outsourcing will increase in these areas as they climb the S-curve.

About Zinnov  

Zinnov provides consulting services for the establishment and management of offshore captive centers for Engineering & IT, BPO, and knowledge process based services. Zinnov offers offshore advisory services; and assistance with conducting market analysis, exploratory research for expansion and business analytics. Zinnov also provides business consulting and support services, which include customized consulting engagements, operational dashboards, industry trends and best practices monitoring, and policies in the areas of technology & IT services, business and corporate services, growth strategies, expansion initiatives, branding, and process improvements.

Zinnov serves clients in Software, Automotive, Telecom& Networking, Semiconductor, Consumer Electronics, Storage, Healthcare, Banking, Financial Services & Retail Verticals in US, Europe, Japan & India. Zinnov was founded in 2002 and is head quartered out of Bangalore. The company has locations in Houston, Silicon Valley, Bangalore and Gurgaon.

For any further media queries, please contact:
Kinjal Panwar
[email protected]
+91-8197140140
Zinnov Management Consulting