Electric Steering Market Analysis

Electric Steering Market Deep Dive – PESTLE, Porter, SWOT

Electric steering is undergoing a transformational phase. The growth of the electric steering market is largely driven by the technological advancements in the automobile industry and the increasing focus on improving vehicle performance and safety. Electric steering has become a key component in modern vehicle design, as it offers precise control and improved responsiveness compared to hydraulic systems. The integration of electric steering not only contributes to a reduction in weight and energy consumption, but also makes it easier to integrate advanced driver assistance systems (ADAS), which are becoming an essential part of the development of autonomous driving. Also, the growing demand for an improved driving experience and the proliferation of electric vehicles are pushing the market towards innovation, thereby requiring suppliers to invest in R&D to meet the evolving needs of the automobile industry. Electric steering is thus a technology that is reshaping the future of steering.

PESTLE Analysis

• Political:
  In 2023, government policies in many regions favoured the use of electric steering, because of its potential to improve vehicle safety and fuel economy. In Europe, for example, the European Union had imposed a 2025 deadline for all new vehicles to meet stringent emissions standards. This indirectly encouraged the use of electric steering, which contributed to lower emissions. Similarly, the U.S. government had allocated approximately seven billion dollars to the development of electric vehicle technology, including the support of advanced steering.
• Economic:
  The world automobile industry is moving toward electric cars, and it is expected that by 2023 about 15 per cent of all new cars sold will be electric. This trend is boosting demand for electric steering systems, which are an integral part of the performance of electric cars. The cost of electric steering systems has been reported to be about $300 per unit. This reflects the competitive price-cutting strategy that manufacturers are pursuing in order to grab a share of the growing electric car market.
• Social:
  The tastes of the consumers are rapidly changing, with a growing emphasis on the environment and the latest technology in the cars. A survey in 2023 showed that 68% of consumers would be willing to pay an extra 10% for a car with advanced steering technology, which would increase safety and driving pleasure. The manufacturers are therefore investing in electric steering to meet the increasing demand for innovative and sustainable vehicle features.
• Technological:
  The electric steering market is undergoing rapid technological progress, particularly in the development of steer-by-wire systems. It is estimated that more than one-quarter of new electric vehicles are already fitted with steer-by-wire technology, which does away with the old mechanical linkages and makes the vehicle easier to steer. Artificial intelligence is further improving the responsiveness and adaptability of steering systems, and by 2025 about 40 per cent of car manufacturers expect to be using some form of AI in their steering systems.
• Legal:
  The safety and reliability of electric steering systems are being ensured by a regulatory framework. In 2023 the National Highway Traffic Safety Administration (NHTSA) in the United States issued new regulations requiring all electric steering systems to undergo strict testing procedures, including a minimum of 1,000 hours of real-world testing before obtaining certification. The aim of these regulations is to reduce the risk of failures and to ensure the safety of consumers, and to compel manufacturers to put compliance at the top of their development priorities.
• Environmental:
  The manufacturers and the authorities are beginning to pay attention to the question of the environmental effect of electric power steering. In 2023 it was calculated that the energy consumption of a vehicle could be reduced by up to 5% by the installation of an electric power steering system, which would in turn reduce the overall CO2 emissions. Also, a life-cycle assessment of electric power steering components shows that they can be manufactured with up to 30% less energy than hydraulic systems, which also fits in with the general trend towards greener mobility.

Porters Five Forces

• Threat of New Entrants:
  The electric-steering market is moderately closed because of the substantial investment required in manufacturing and technical facilities. The established companies can take advantage of economies of scale and brand recognition to deter new entrants. But advances in technology and the increasing demand for electric vehicles may encourage new entrants.
• Bargaining Power of Suppliers:
  The bargaining power of the suppliers in the electric-steering market is relatively low. There are many suppliers of the materials and components needed for electric steering, and this creates competition among the suppliers. The manufacturers can also change suppliers without great difficulty and this also reduces the power of the suppliers.
• Bargaining Power of Buyers:
  The buyers in the electric steering market, especially the automobile manufacturers, are in a strong position of bargaining power. There are few large automobile manufacturers, and with the growing availability of alternative steering systems, they can demand lower prices and better terms. In addition, the growing shift towards electric vehicles will give the buyers an advantage as they seek to find new and cost-effective solutions.
• Threat of Substitutes:
  “The threat of substitution on the electric-steering market is moderate. The threat is moderate.” The electric-steering market is still in its infancy, and even though the traditional hydraulic steering system is still the most common, the growing trend toward electric vehicles and the development of new steering technology are pushing the market towards electric steering solutions. The threat of substitution from the competition is moderate if they offer better performance or lower cost.
• Competitive Rivalry:
  The competition in the electric power steering market is very strong, with several major companies competing for market share. The growing market for electric vehicles has increased the competition, and companies are trying to differentiate their products by developing new products. Competition for price and technological development are also very intense.

SWOT Analysis

• Strengths:
  • Enhanced vehicle control and safety features.
  • Improved fuel efficiency due to reduced weight compared to traditional systems.
  • Growing demand for advanced driver-assistance systems (ADAS).
  • Integration with electric and hybrid vehicles, aligning with sustainability trends.
• Weaknesses:
  • High initial costs associated with electric steering systems.
  • Potential for technical malfunctions and reliability concerns.
  • Limited consumer awareness and understanding of benefits.
  • Dependency on electronic components which may face supply chain issues.
• Opportunities:
  • Expansion in emerging markets with increasing vehicle ownership.
  • Technological advancements in automation and connectivity.
  • Partnerships with tech companies for enhanced software integration.
  • Government incentives for electric vehicle adoption boosting market growth.
• Threats:
  • Intense competition from traditional steering systems and alternative technologies.
  • Economic downturns affecting consumer spending on new vehicles.
  • Regulatory changes impacting manufacturing and safety standards.
  • Rapid technological changes leading to obsolescence of current systems.

In 2023, the electric steering market will be characterized by significant strengths such as enhanced safety and fuel efficiency, as well as weaknesses such as high costs and reliability concerns. Opportunities for growth are present in emerging markets and technological advancements. Threats to the market's stability are competition and economic fluctuations. Strategically, innovation and consumer education will be important in ensuring opportunities and reducing risks.