Automotive Radar Sensors Market Analysis

Automotive Radar Sensors Market Deep Dive – PESTLE, Porter, SWOT

The market for automotive sensors is undergoing a period of transformation, driven by the increasing demand for ADAS and the increasing demand for vehicle safety and automation. Radar sensors have become the key technology to support ADAS functions such as adaptive cruise control, collision avoidance and parking assistance. It is not only a matter of vehicle safety, but also a key technology for the development of automation. It has become an important focus of innovation in the automobile industry. Besides, the popularity of the trend of connected vehicles and the Internet of Things will also drive the popularity of radar sensors, which will play a role in the communication between vehicles and the outside world. In this context, there are many challenges and opportunities for the relevant industry, as it is facing the complexity of technological innovation, regulatory frameworks and consumers' tastes in a rapidly changing market.

PESTLE Analysis

• Political:
  In 2023, government regulations regarding vehicle safety and emissions had become more stringent, which had affected the car sensors market. In the European Union, for example, all new cars had to be equipped with so-called ADAS (Advanced Driver-Assistance System) by 2025. ADAS, which were based mainly on acoustic sensors, were to be compulsory from that date. This regulation would affect an estimated 15 million vehicles per year in the European Union alone, and thus drive the market for acoustic sensors.
• Economic:
  The development of electric vehicles is having a major impact on the market for radar sensors. In 2023, the average cost of a vehicle’s on-board radar is expected to be around $300, with the market for these sensors reaching $1.2 billion. In addition, the number of jobs in the global automobile industry will increase to over nine million. Of these, a significant number will be in the development and integration of advanced sensors.
• Social:
  In the future, there will be a marked shift in the consumers’ preference towards increased safety features in cars. By 2023, more than 70 per cent of the car buyers will consider the safety technology in the car they buy to be very important. In the coming years, the automakers will be investing more in the radar sensors. The role of the radar sensors is critical in the active cruise control and the collision avoidance system. In addition, the growing awareness of road safety will lead to a higher acceptance of the vehicles equipped with advanced radar systems.
• Technological:
  77 GHz sensors are being introduced, with better resolution and range. It is estimated that by 2023 about forty per cent of new vehicles will be equipped with such advanced sensors, against twenty-five per cent in 2020. Artificial intelligence is bringing an even higher level of performance to the radar, which is essential for the development of the driverless car.
• Legal:
  Legal provisions for the safety of vehicles are becoming more extensive. In some countries, for example, the installation of a radar in new cars is now required by law. The United States National Highway Traffic Safety Administration has proposed a regulation for all new cars from 2024 to have a certain ADAS. This is expected to affect the sale of about 17 million cars in the United States every year, and the demand for sensors will increase.
• Environmental:
  The auto industry is under pressure to reduce its carbon footprint. Many manufacturers have committed themselves to setting and achieving a series of sustainable development goals. It is estimated that by 2023 some 30 per cent of car makers will be investing in new production methods for sensors that are more environmentally friendly, with the aim of reducing energy and material consumption by 20 per cent by 2025. Furthermore, the switch to electric mobility is expected to cut the industry’s carbon emissions by around 50 per cent by 2030. This will further increase the need for efficient sensors.

Porters Five Forces

• Threat of New Entrants:
  The entry barriers to the market for automobile radar sensors are moderate because of the need for substantial investment in technology and research and development. The established players enjoy economies of scale and a high degree of brand awareness, which make it difficult for new entrants to win market share. However, technological developments and the growing demand for driverless cars may make it easier for new companies to enter the market.
• Bargaining Power of Suppliers:
  The suppliers’ bargaining power on the market for car radar sensors is relatively low. There are many suppliers of the electrical components and materials used in the sensors, which creates competition between the suppliers. The manufacturers can also change suppliers without major costs, which further reduces the suppliers’ bargaining power.
• Bargaining Power of Buyers:
  The bargaining power of the buyers in the automotive radar sensors market, including the automobile manufacturers and the original equipment manufacturers, is high. They purchase in large quantities and can negotiate prices due to the presence of multiple suppliers. The demand for advanced driver assistance systems and safety features is increasing.
• Threat of Substitutes:
  The threat of substitutes in the market for car sensors is moderate. Radar sensors are indispensable in many applications in cars. However, the use of lidar and camera sensors is increasing. In certain conditions, such as bad weather, radar sensors offer unique advantages.
• Competitive Rivalry:
  Competition in the market for car sensors is intense. Several major companies are competing for market share. Competition is intensified by the rapid technological development and the push for self-driving solutions. The companies are investing heavily in research and development to create differentiation in their products, which creates a dynamic and competitive market.

SWOT Analysis

• Strengths:
  • High accuracy and reliability in object detection and distance measurement.
  • Growing demand for advanced driver-assistance systems (ADAS) and autonomous vehicles.
  • Integration with other sensor technologies enhances overall vehicle safety and performance.
• Weaknesses:
  • High development and production costs may limit market entry for new players.
  • Complexity in integration with existing vehicle systems can pose challenges.
  • Limited awareness and understanding of radar technology among consumers.
• Opportunities:
  • Increasing government regulations and safety standards driving adoption of radar sensors.
  • Expansion of electric and autonomous vehicle markets creating new applications.
  • Technological advancements in radar technology, such as improved range and resolution.
• Threats:
  • Intense competition from alternative sensor technologies like LiDAR and cameras.
  • Economic fluctuations affecting automotive industry investments.
  • Potential cybersecurity threats to connected vehicle systems.

The market for automobile radar sensors will be characterized by strong demand in 2023, a result of the growing popularity of ADAS and self-driving vehicles, the high accuracy and reliability of radar technology, and the availability of high-capacity and low-cost radar systems. However, the cost of radar sensors and the difficulty of integrating them into the vehicle may impede the growth of the market. Opportunities will be created by the increasing regulatory pressure and the technological development, while competition from alternative sensors and economic uncertainties will be a threat. Strategic focus on innovation and collaboration will be crucial for the players in this dynamic market.