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Analysis of the Chinese Market for Passenger Car Advanced Driver Assistance Systems

  • August 2014
  • 132 pages
  • Frost & Sullivan
Report ID: 2314483


Table of Contents

Strong Potential with Market Revenue Expected to Grow Fivefold by 2020

Despite being the largest automotive market in the world, the ADAS market is in its nascent stage in China with most major ADAS technologies attracting less than 10% penetration rates in the market. However, the future looks positive with clear market potential with the regional ADAS market expected to grow six fold in revenue by 2020. Vehicle safety and driver comfort are expected to attract more interest within the Chinese automotive industry, with improved legislations likely to touch every aspect of safety from avoiding collisions to pedestrian security. In a highly cost-sensitive market, the ADAS market in China is entering a new phase with a possibility of exponential growth in the market in the next 3 to 5 years. Covering the Chinese ADAS market from 2013 to 2020, this study shows how the ADAS market is expected to unfold by 2020.

Key Findings
The Chinese ADAS market is expected to grow fourfold in revenue over the next years, but the market is expected to be highly price sensitive and consumer driven.
1 Market Size: The Chinese advanced driver assistance systems (ADAS) market is forecast to grow from million units in 2013 to million units by 2020 at a CAGR of %, while revenue is forecast to grow from $ million in 2013 to $ billion in 2020.
2 Competitive Environment: The market is largely dominated by global suppliers in China. However, a number of Chinese suppliers are entering this market. BMW, Daimler, and VW groups held over % of the market in 2013.
3 Government Role and Support: By 2015/2016, better defined legislation on specific ADAS technologies is expected to boost the penetration rate of ADAS technologies.
4 Localisation: With major original equipment manufacturers (OEMs) localising production by up to % by 2015, it is important to localise the ADAS technologies to fit the demand of the Chinese market. With cost being a major challenge, innovative cost-effective solutions need to be developed for the Chinese market.
5 Consumer Awareness: The significant growth in ADAS technologies in the market is a reflection of the increased awareness of safety technologies among consumers and OEMs.

Following the policies of car purchase restrictions in major Chinese cities (Beijing, Shanghai, and Guangzhou), the cost of car registration has increased to around 35,000 Chinese Yuan (CNY). This is pushing low-priced cars out of the market and has also affected the second-hand car market.

Despite the challenges, local manufacturers such as FAW are exhibiting their desire to showcase ADAS technology at a prototype level with other Chinese OEMs—Changan, BYD, SAIC, and Great Wall—planning to follow these footsteps into the market by 2014/2015.

On the other hand, it opens up opportunities for luxury and premium car manufacturers to provide advanced technologies in order to create brand differentiation and offer a unique value proposition for their customers.

Major challenges for local suppliers are to offer quality systems at lower costs compared to international suppliers, and to gain the trust and business from local OEMs whom often overlook local suppliers when it comes to advanced technologies.

International OEMs and suppliers are currently facing cost pressures and fitment challenges due to technology localisation in China. As most of these technologies were designed and developed to serve the Western market, there is a need to invest in further research and development (R&D) and testing.

China ADAS Market Snapshot Local OEMs and suppliers are not yet equipped to tackle the growing market for ADAS technologies in China.

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