Automotive Steer-by-Wire System Market Analysis

Automotive Steer-by-Wire System (Global, 2024)

Introduction

The automobile industry is undergoing a fundamental transformation. The use of advanced technology is a decisive factor in determining the performance, safety, and comfort of the vehicle. Steering by wire, for example, transmits the steering commands not mechanically but by means of an electric circuit, and it is able to respond instantly and precisely. This not only reduces the weight and complexity of the vehicle but also makes it possible to integrate self-driving and assistance systems. Steering by wire is thus a key technology for the next generation of vehicles. It will not only revolutionize the driving experience but also help to meet the increasing demand for intelligent, networked mobility solutions. And it will be further developed by the rapid progress being made in sensors, digital algorithms, and V2X (vehicle-to-everything) communication.

PESTLE Analysis

Political

In 2024, the car industry is greatly influenced by the governmental regulations concerning safety and exhaust. For example, the European Union has imposed a requirement that by 2024 all new vehicles must meet a strict safety standard, which includes the use of advanced steering systems such as steer-by-wire. This regulation is expected to affect the sale of 15 million vehicles in the European Union alone. Moreover, the various governments are investing in the development of electric and self-driving vehicles, with the United States earmarking $7.5 billion for charging stations for electric vehicles. These efforts indirectly promote the use of advanced steering systems.

Economic

The world automobile industry is liable to experience a fluctuation in consumer spending due to the state of the world economy. In 2024, it is expected that the average household will spend about ten thousand dollars a year on transportation, including vehicle purchases, repairs, and fuel. This will have an effect on the demand for such new technologies as the steer-by-wire system. It is likely that consumers will want to see more features that enhance the driving experience and safety. As for the supply chain, the shortage of semi-conductors is expected to cause a decrease in production of about 20 percent in some regions.

Social

The demand for more technologically advanced and environmentally friendly cars is growing. In 2024, a survey shows that 65 percent of consumers are willing to pay a premium for vehicles with a high degree of safety, including steer-by-wire. The trend is towards a greater awareness of the benefits of such systems, especially in terms of safety and driving comfort. The increasing popularity of electric vehicles, which are often equipped with steer-by-wire, is changing social attitudes towards traditional car technology. In 2025, 40 percent of new car buyers in cities prefer electric cars.

Technological

The steering by wire is a rapidly evolving technology, with advances in both the electronic control systems and the sensors. By 2024, the world's investment in research and development in the field of automobile technology is expected to reach $120 billion. A large part of this will be devoted to the development of steer by wire systems. Its advantages, weight reduction and vehicle dynamics, are essential for the performance of electric and driverless cars. Artificial intelligence will further improve the responsiveness of steering by wire systems, and by 2024, it is expected that 30 per cent of new cars will have steering by wire controlled by artificial intelligence.

Legal

The legal framework for the use of car technology is becoming increasingly complex. The use of advanced steering systems is subject to various restrictions. In 2024, the National Highway Traffic Safety Administration in the United States proposed new regulations requiring manufacturers to prove the safety and reliability of steer-by-wire systems before they can be used in commercial vehicles. The regulations include rigorous testing procedures that could involve up to 1,000 hours of testing under various conditions. To avoid the risk of lawsuits and to ensure market access, manufacturers must comply with these regulations.

Environmental

Environmental concerns are driving the automobile industry towards more sustainable practices. The industry is expected to reduce its carbon footprint by a quarter by 2024 compared with 2020 levels, largely because of the adoption of electric vehicles and the energy-efficient features of systems like steer-by-wire. Also, the production of steer-by-wire systems is increasingly based on sustainable materials, with about 50% of the components coming from recycled materials. Not only does this reduce the carbon footprint, it also reflects the increasing demand for sustainable products from consumers.

Porter's Five Forces

Threat of New Entrants

The barriers to entry are moderate because of the high costs of research and development and the need to meet strict safety regulations. The market is characterized by a medium degree of competition. The increasing demand for electric and driverless vehicles, however, could bring in new competitors, and the threat of competition is therefore moderate.

Bargaining Power of Suppliers

The bargaining power of the suppliers of steer-by-wire systems in the market for automobiles is relatively low. This is because of the large number of suppliers of the important components such as sensors, actuators, and controllers. The suppliers are also easily replaceable, and so bargaining power is low.

Bargaining Power of Buyers

The buyers in the automobile industry, including the automobile manufacturers and the original equipment manufacturers, have great power of bargaining. Since they have many choices and can bargain over prices, they can influence the terms of the contract, thereby increasing the buyer’s bargaining power.

Threat of Substitutes

The threat from steer-by-wire systems is moderate. The threat from alternatives is medium. Mechanical systems still dominate the market, but the growing trend towards electric and self-driving vehicles will probably lead to an increased use of steer-by-wire systems. However, there are alternatives, which can make the threat medium.

Competitive Rivalry

Competition in the market for steer-by-wire systems is high, because of the presence of both established players and new entrants vying for market share. The intense competition between companies to develop new technology and to differentiate their products has a strong effect on the level of investment in research and development. Also, the rapid technological development in this field has heightened the competition.

SWOT Analysis

Strengths

• Enhanced vehicle control and precision steering.
• Reduction in weight and complexity of mechanical components.
• Increased design flexibility for vehicle manufacturers.

Weaknesses

• High initial development and implementation costs.
• Dependence on advanced electronic systems and software.
• Potential consumer resistance to new technology.

Opportunities

• Growing demand for electric and autonomous vehicles.
• Advancements in sensor technology and connectivity.
• Potential for integration with advanced driver-assistance systems (ADAS).

Threats

• Regulatory challenges and safety standards compliance.
• Competition from traditional steering systems and alternative technologies.
• Cybersecurity risks associated with electronic systems.

Summary

By 2024, the market for automobile steer-by-wire systems is expected to present many advantages, such as enhanced vehicle control and reduced mechanical complexity, which will enable manufacturers to be more flexible in their design. But there are also a number of challenges to be overcome, such as high costs and the possibility of a backlash from consumers. The rise of electric and driverless vehicles, along with technological advances that will make integration with existing systems easier, will present a number of opportunities for the market. However, the market will need to navigate a path through the regulatory and competitive hurdles and potential cybersecurity threats to fully exploit its potential.