Automotive Electronic Brake System Market Analysis

Automotive Electronic Brake System Market (Global, 2023)

Introduction

The market for automobile brakes is experiencing a transformation, driven by technological advancements and the rising demand for vehicles with enhanced safety features. In the effort to meet increasingly stringent regulations and the high expectations of consumers, the integration of the latest braking systems has become a key element in the design and development of new vehicles. These systems not only improve braking efficiency and responsiveness, but also contribute to the performance and safety of modern vehicles. The growing emphasis on automation and the rise of electric and hybrid vehicles have further increased the need for advanced braking solutions. The evolution of automobile braking technology is now at a critical point. The market for automobile braking systems is expected to grow, despite the challenges posed by the need for sustainable development and the disruptions to supply chains.

PESTLE Analysis

Political

In 2023 the car industry is heavily influenced by government regulations aimed at enhancing safety. In the USA, for example, the National Highway Traffic Safety Administration (NHTSA) stipulates that, by 2025, all new cars must be fitted with a special braking system. This affects about 17 million new cars a year. This is part of a general campaign to reduce the number of traffic fatalities, which, in the USA alone, numbered more than 38,000 in 2022. This has led to the introduction of further regulations and the further development of safety technology.

Economic

The market for automobile brakes is also influenced by economic conditions, especially by rising prices for raw materials. Steel, for example, rose to about $1,200 a ton in 2023, a rise of 15 per cent over the previous year, because of transport problems and rising demand. The rising prices of raw materials have an effect on the manufacturers’ prices and profit margins. They have to balance the need for high-quality products against the cost of production.

Social

There is a tendency to move towards the purchase of cars with improved safety equipment, especially with the installation of the antilock braking system. A survey made in early 2023 shows that 72% of consumers consider the antilock braking system a basic requirement when buying a new car. This growing awareness of the importance of safety has pushed manufacturers to invest more in the development of electronic braking systems to meet the expectations of the safety-conscious market, especially among young people aged 18 to 34, who represent 30% of new car purchases.

Technological

Advancing technology is transforming the market for automobile brakes. In 2023, artificial intelligence (AI) is being incorporated into brake systems. More than a quarter of all new cars are equipped with brakes based on AI, which enhances braking performance and safety. High-quality sensors and powerful digital technology, both of which are essential for the development of the next-generation of braking systems, are becoming increasingly available.

Legal

The laws regulating the safety of motor cars are becoming more and more strict. In 2023, the European Union imposes on the manufacturers a new law which makes it compulsory for them to subject their cars to severe tests of their braking devices, the cost of which is estimated at about five hundred million francs. The aim of these regulations is to ensure that the electric braking system is of a high standard of safety, and to increase the legal obligation of the manufacturers to invest in the quality of their products.

Environmental

Besides, the car brake market is also influenced by the environment. In 2023, the European Union aims to reduce car emissions by 55% by 2030. The brake market has developed eco-friendly materials, and an estimated 20% of manufacturers use recycled materials in their production processes. The industry is increasingly concerned about the environment.

Porter's Five Forces

Threat of New Entrants

The barriers to entry are medium-high, because of the substantial investment in technology and production facilities. The established companies also enjoy economies of scale and brand loyalty, which make it difficult for new entrants to compete effectively. The introduction of electric vehicles, however, offers new opportunities for technologically advanced start-ups.

Bargaining Power of Suppliers

The bargaining power of suppliers in the market for automobile brake systems is relatively low. There are numerous suppliers of electrical components and materials, which makes for a competitive environment. Suppliers can be changed at relatively low cost, which limits the influence of any one supplier. However, suppliers of specialized components may have a higher bargaining power.

Bargaining Power of Buyers

The buyers in the automobiles' brakes systems market have a high bargaining power because of the multiple choices available and the increasing demand for safety features in vehicles. There is pressure on the automobiles' manufacturers to come out with new safety features and hence the buyers have the power to bargain for better prices and features. The introduction of electric and driverless cars is also increasing the bargaining power of the buyers.

Threat of Substitutes

The threat of substitutes in the car-brake market is moderate. In spite of the fact that conventional braking systems are still the norm, technological progress may lead to the development of alternative braking systems, such as the regenerative braking systems in electric vehicles. However, the critical safety role of the braking systems in the car prevents the immediate threat of substitutes, as consumers are more concerned with safety and reliability.

Competitive Rivalry

Competition is high in the market for automobile brake systems, with several established companies competing for market share. These companies have a strong research and development department, which makes it possible to develop and improve products that are better than their competitors’. The rapid technological development and the desire for increased safety add to the rivalry in this market.

SWOT Analysis

Strengths

• High demand for safety features in vehicles driving adoption of electronic brake systems.
• Technological advancements leading to improved performance and reliability.
• Integration with advanced driver-assistance systems (ADAS) enhancing overall vehicle safety.

Weaknesses

• High initial costs associated with the development and implementation of electronic brake systems.
• Complexity of technology may lead to higher maintenance and repair costs.
• Limited awareness and understanding among consumers regarding the benefits of electronic brake systems.

Opportunities

• Growing trend towards electric and autonomous vehicles creating new market opportunities.
• Potential for partnerships with automotive manufacturers to develop innovative braking solutions.
• Increasing regulatory pressure for enhanced vehicle safety standards driving market growth.

Threats

• Intense competition from traditional braking systems and alternative technologies.
• Economic downturns affecting consumer spending on new vehicles.
• Supply chain disruptions impacting the availability of critical components.

Summary

The world market for automobile brakes will be characterized by strong demand, driven by the safety concerns and technological advancements. But the high costs and complexity of the systems may hamper the market. Opportunities lie in the growing electric and self-driving vehicle segments, and in cooperation with manufacturers. Competition and economic factors could, however, have a negative effect on market growth.