Market Trends of Circuit Protection Components Industry
Automotive is Expected to Hold Significant Market Share
- The increase in hybrids and electric vehicles (EV-type cars) is rapidly reducing the environmental burden and increasing the number of ECUs (electronic control units), thereby leading to a more robust demand for electronic components whose miniaturization and further performance improvements have been rising. The growing market for these vehicles will offer further growth opportunities to circuit protection component manufacturers.
- In July 2022, a new set of European rules were introduced, requiring new vehicles to be equipped with a range of mandatory advanced driver-assist systems to improve road safety. The latest safety regulations will help to protect passengers, cyclists, and pedestrians across the EU, saving over 25,000 lives and avoiding at least 140,000 severe injuries by 2038.
- North America is one of the largest automotive hubs in the world. The region's economic growth has impacted the sale of passenger cars and commercial vehicles. According to OICA, North America produced around 13.43 million motor vehicles in 2021, a slight increase compared to 13.37 million in 2020. BEA (Bureau of Economic Analysis) states that light vehicle retail sales in the United States soared from 14,471.8 thousand units in 2018 to 14,926.9 thousand units in 2020.
- Further, according to the US Department of Energy, plug-in light vehicles (PEVs) sales in the United States were between 607,600 units in 2021. After initially rising in 2018 as Tesla's Model 3 deliveries gathered steam, all-electric and plug-in electric car sales in the United States peaked that year.
- Also, according to the China Association of Automobile Manufacturers, over 965,000 passenger automobiles and around 216,000 commercial vehicles were sold in China in April 2022; these numbers represent a 48% and a 42% decline, respectively, from the previous month. Such huge sales of vehicles will create an opportunity for the studied market to grow.
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Asia-Pacific is Expected to Register Significant Growth
- In recent years, India has witnessed remarkable growth in terms of the demand for and consumption of electricity. Growing urbanization and industrialization rates are among the primary factors behind this growth. According to the World Bank, the degree of urbanization in India stood at 35.39% in 2021, compared to 34.93% in 2020.
- Furthermore, the demand for circuit protection components is also expected to grow across their major end-user industries, such as automotive, consumer electronics, energy, and power, as these sectors are witnessing an upward trend. For instance, according to IBEF, the electronics industry contributes around 3.4% of the country's GDP. The country's domestic electronics production increased from USD 29 billion in FY 2014-15 to USD 67 billion in FY 2020-21.
- Further, India is also witnessing growth in terms of the adoption of electric vehicles. Growing awareness and various government-led initiatives are driving the sales of electric vehicles in the country. For instance, according to IBEF, with 324,840 EVs registered, the country's electric vehicle market will grow by 163% in 2021. The two-wheeler segment led the chart, reporting a remarkable growth rate of 422%, with numbers increasing from 28,508 to 149,068 in FY 2020/21.
- Similar to its status in digital product manufacturing, China is fast emerging as the "world's factory" for EVs, accounting for more than 50% of global electric vehicle production. For instance, according to the China Association of Automobile Manufacturers (CAAM), the production and sales of new energy vehicles (NEVs) in China increased significantly in 2021, with the sales of battery electric vehicles (BEVs) growing from 1,115 thousand units in 2020 to 2,916 thousand units in 2021. The sale of plug-in electric vehicles (PHEVs) also reported a similar trend, increasing from 251 thousand units in 2020 to 603 thousand units in 2021.
- The government is also taking a number of initiatives to promote the growth of the Chinese automotive industry. For instance, in September 2022, the State Taxation Administration (STA), the Ministry of Finance (MOF), and the Ministry of Industry and Information Technology (MIIT) jointly announced the continuation of tax exemptions on purchases of new energy vehicles. Hence, with EV sales expected to sustain a similar growth pattern, the demand for circuit protection components across the country's automotive industry is also expected to grow further during the forecast period.
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