Advancements in sensor technology are driving the electric power steering systems market. The early-generation steering sensors were just optical sensors with photodiodes inside, which interpreted evenly-spaced slits in a disc attached to the steering column. In addition, the early steering position sensors were relatively low-resolution sensors, and are expected to typically detect steering movements in 8-9 degree increments. However, the modern steering position sensors are high-resolution magnetic sensors, which are even capable of detecting movements of one degree or less. They can even have resolutions lower than one-tenth of a degree.

The hydraulic power steering, which is used conventionally, is now, increasingly, being replaced with electronic-power assist systems. The electric motor helps to turn the car, with the required power steering assistance. Power steering assistance is provided with the help of ECUs in these systems, which takes all the information from the sensors (in addition to collecting other information, like vehicle speed) and then provides the required steering assistance. Thereby, the development of steering sensors, from just a rotation sensor, has helped to augment the demand for EPS by the OEMs, in the last five years.

The sales of passenger cars have been growing continuously for the past few years. However, in 2018, China’s passenger car production reached 23,529,000 units, reflecting a 5.2% decline y-o-y; while sales reached 23,710,000 units, reflecting a 4.1% decline y-o-y. Production of passenger vehicles accounted for 84.6% of the total production; while sales accounted for 84.4%. These proportions were 0.9% and 1.2% points lower than those in 2017, respectively. When compared with the same period the previous year, the growth rate of the first half of 2018 was significantly higher than that of the second half of 2018. The prime reason being the trade tensions with the United States and shaky consumer confidence. Additionally, industry experts predict a further decline of 5% in vehicle sales in 2019.

It is anticipated that China will sell about 28,100,000 vehicles in 2019, out of which, 23,700,000 likely to be passenger vehicle sales. After balancing imports and exports in 2019, the annual demand of China’s automotive market will be 28,200,000 units. It is anticipated that the demand for passenger car production is likely to increase, which, in turn, is expected to fuel the demand for EPS in the country.

Additionally, with an aim to increase the sales of cars, the Chinese government, in January 2019, unveiled numerous measures. The National Development and Reform Commission (NDRC) announced that the restrictions will be loosened on the second-hand auto market, and appropriate subsidies will be provided to boost rural sales of some vehicles, as well as the purchase of new energy vehicles. This, in turn, is expected to drive the demand for and sales of vehicles in the country in 2019, but at a slow pace, which, in turn, is likely to propel the demand for EPS.