Airbag Systems Mkt. & Tech. Overview - Excerpt

Executive Summary

Introduction

At the request of several clients, TIER ONE undertook this study to better define the technology and market forces that will influence the Occupant Restraint Market. We report current market size and market share, identify immediate issues, and analyze where and how the industry will change.

Driven by regulatory mandates and consumer demand in the United States, airbags have become standard equipment on cars and light trucks produced in all major automotive markets around the world. Anticipating this trend, many companies entered the industry, creating a highly competitive supplier environment.

Beginning in CY 2005, dynamic changes in the US market will accompany anticipated government mandates for fail-safe occupant sensing, variable force front airbags, and improved side impact protection. To comply with these mandates, automakers and suppliers are designing intelligent restraint systems that combine new front and side airbag technologies, seat-belt pretensioners, occupant sensors, smart initiators, a reliable safety bus to handle both sensors and initiators, staged deployment, and extensive communication with other automotive systems.

o GM planners estimate that in 2005, 65% of their US vehicle production will have 10-12 initiators, and 35% will have 8-10 initiators.

o The final legislative draft is in review. A critical item is mandatory seat belts that enable seat belt pretensioners to be effective.

World Airbag Market Forecast

Airbag Unit Volume

The world airbag market is forecasted to increase from 66 million units in 1996 to over 200 million units in 2006, a compound annual growth rate of 12%. Over this decade, Europe will add 60 million units, Asia-Pacific 30 million units, and North America 24 million units.

Table 1. World Airbag Module Market (millions of Units)

Airbag Installation Rates

Front airbags (driver and passenger) are now standard on 90% of worldwide vehicle production, driven by regulatory mandates in the United States and strong consumer demand in Europe and Japan. Side impact airbags will achieve worldwide installation of nearly 25% in 2001. Beginning in 2005, side impact airbags in North America will ramp toward 100% installation rate.

Airbag Component Pricing

Airbag module prices declined significantly between 1997 and 2000, caused primarily by decreases in inflator prices. Prices will begin to level off in 2001 and drop only marginally through 2004 as inflator manufacturing, technology improvements and supplier sub-component pricing are maximized. Prices for electronic airbag components will decline moderately during the same time. System prices in North America will increase in 2005 under planned government mandates.

World Airbag Market Revenue

The world market for automobile occupant restraints in MY2000 generated sales of over $12 Billion (USD). Of this total, Airbag Modules accounted for 50% of the market, seat belts for almost 30%, and occupant restraint electronics for the remaining 20%.
During 1999 and 2000 vehicle sales reached record highs. With the recent worldwide downturn in economic performance, beginning in Asia and culminating most recently in North America, worldwide production of new vehicles declined in the first quarter of 2001.
Despite this, TIER ONE predicts that installation of occupant restraint devices will still enjoy a moderate growth in the short term. This prediction is based on

o Installation of airbags has not yet reached a worldwide penetration of 100%. Most automakers throughout the world are not only scrambling to introduce additional safety devices such as side airbags and seat belt pretensioners, but are still struggling to get driver and passenger airbags in 100% of their vehicles.

o Occupant safety systems have shown to have a big influence on consumers. They have become a key marketing tool used by OEMs to attract buyers to invest in new safer vehicles.

North American Airbag Market Revenue

Federal law in the United States mandates that all new light vehicles sold after September 1, 1998 have front airbags for driver and passenger. As a result, the installation rate of front airbags in North America has saturated at nearly 100%.
Offsetting this plateau has been steady growth in side impact airbags, and design-in of other airbags and seat belt pretensioners. These should allow airbag and airbag component suppliers to sustain a moderate growth rate through 2004.

North American Airbag System Cost

Beginning in 2005, new mandates will force side impact protection toward 100% for driver and passenger, greatly increase the sophistication of occupant sensing, and require variable deployment rates for front airbags. These market conditions will spur development of alternate airbag inflator technology, sensor technology and a multiplexed safety bus. Total system cost will experience a step function increase.

 

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