The Automotive Electronic Control Unit (ECU) Market was valued at USD 44 billion in 2020 and is expected to reach USD 67 billion in 2026 by registering a CAGR of around 6% during the forecast period (2021 - 2026).
The Impact of the COVID-19 pandemic on the automotive electronic control unit market is inevitable due to shut down of automotive manufacturing units and lock downs. However, market is expected to regain its momentum owing to the swiftly escalating year-on-year adoption rate of electric vehicles across the world.
Government regulations to reduce fuel usage and increasing demand for better mileage of the vehicles by the general public is another major factor leading to high growth of ECU market in the automotive industry.
The steady growth of alternative vehicle choices such has the hybrid and pure electric cars in the developed nations has contributed significantly to the ECU market due to high complexities of these vehicles over conventional vehicles. Driver safety, security concerns, ease of driving, low maintenance demanded by the customers are also some of the factors driving the growth of ECU market.
The involvement of smartphones connected to the vehicle providing the driver with real time information about the state of vehicle is a major trend in recent times. These advanced ECU systems with the provision to connect with the smartphones easily can lead to an improvement in the growth of ECU systems.
Asia-Pacific region followed by North America and Europe anticipated to witness significant growth during the forecast period owing to growing demand for electric vehicles in the region. Moreover, Increased demand for technologically advanced vehicles like hybrid vehicles in the developed and developing countries to drive the growth of ECU market.
Key Market Trends
Rising Electric Vehicle Sales to Boost Demand for ECUs
The demand for Electric Vehicles is growing rapidly across the world, and this in turn to augment demand for ECU in these vehicles. In addition, favorable government subsidies and initiatives to act as catalyst boosting the growth of ECU market. By 2040, nearly 54% of the new car sales and 33% of the global car fleet will be electric.
To meet the electric vehicle sales target, the European government has already started various projects for building charging infrastructure across the regions. This transformation in the automotive industry is expected to have an impact on the automakers, electronic component manufacturers, aftermarkets, and supply chain of the industry itself.
As a result, manufacturers of parts and components only pertaining to IC engine vehicles are now expanding their business into the electric vehicle domain. As the demand for and sale of electric vehicles are increasing. In the automotive diagnostics market, components, such as ECU for engine control and transmission, would be replaced by ECUs for the electrical architecture and the battery management systems.
Moreover, the conventional diagnostic systems are anticipated to be completely replaced by the onboard diagnostic systems that would continually monitor the health of all the electric and mechanical components of the vehicle.
Asia-Pacific Anticipated To Dominate the ECU Market
Asia-Pacific dominates the automotive electronic control unit market due to rise in the demand for in-vehicle infotainment and communication applications in passenger vehicles, an increase in disposable income, and rise in automobile production in this region.
Electrification in the Asia-Pacific region has witnessed a high penetration rate due to the presence of China and Japan, as China is the leading market for electric vehicles, and most of the automakers advancing in electric vehicle technology are from Japan. This development in electric vehicles can be correlated to the increase in the market for ECU in the region and currently holds the highest market share in terms of both revenue and volume.
North America is the expected region in terms of growth in the automotive electronic control unit market due to an increase in the demand for luxury cars, growing demand for energy-efficient vehicles, and strict government regulations to reduce carbon emissions in this region.
The European automotive ECU market is growing as the infotainment & communication applications are experiencing high demand due to their implementation in luxury & passenger vehicles. The growing focus on providing luxury and comfort features by leading automotive manufacturers present in European countries, including Germany, Italy, etc., is further generating prospects for the industry development.
The Automotive Electronic Control Unit Market is dominated by players such as Lear Corporation, Robert Bosch GmbH, Nidec Corporation, Continental AG, Delphi Technologies, among others. Companies around the world are adopting various and innovative technologies and investing in R&D projects. Moreover, manufacturers are expanding their networks by developing dealership and distribution networks globally to gain profits & strengthen the industry presence. For instance,
In December 2019, Denso Corporation Bought a Stake in PiNTeam Holding GmbH PiNTeam Holding GmbH develops embedded software systems for vehicles. The equity investment has accelerated Denso’s development of basic software that controls the onboard electronic control unit (ECU). In January 2019, ZF Friedrichshafen AG & Xilinx Will Jointly Develop AI Automation and Autonomous Driving. This joint venture will help ZF Friedrichshafen AG to overcome the problem of autonomous driving systems and AI-based automation. Xilinx is a leader in adaptive and intelligent computing, powering its advanced AI-based automotive control units. This will also help ZF Friedrichshafen AG to overcome automation problems.
Owing to the above-mentioned instances and developments, players in the Automotive Electronic Control Unit anticipated to focus on capturing the majority of market shares and are likely to expand their geographical presence during the forecast period.
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