Car Electronics Report – Supplier capability in China

China’s car electronics industry has been advancing consistently over faster than the global automotive semiconductor sector. Entertainment products contribute significantly to supply and revenue, and in-car GPS devices are showing a positive outlook as well. Production of most car electronics is thriving on aftermarket sales. The growth of A/V products, however, is attributed to solid OEM business, as more new vehicles are being preinstalled with complete systems. Certain product segments have suffered a sharp decline in exports in recent months but manufacturers remain confident that China’s overall strong performance will help the line endure the economic slowdown. The following are some of the key trends observed in China’s car electronics industry as suppliers weather the financial downturn:

• Many companies are turning to the domestic market, where automotive sales have been increasing, to boost their business. Suppliers promoting their own brands are targeting retail channels and the replacement parts sector.

• The growing convergence of electronics, telecom and navigation technologies continues to drive R&D efforts in the car A/V product segment.

• New releases of in-car navigation systems and personal navigation devices have slim form factors, high performance and sensitivity, and multimedia functions.

• Car PCs are evolving into infotainment systems that support various applications, including GPS, multimedia player, rearview camera, and Internet and wireless communications.

• User convenience is the key trend in China’s car security and safety segment. Makers are venturing into wireless car safety electronics in response to strong demand, especially in North America and Europe.

• Car electronic accessories that support various portable gadgets, including iPods, mobile phones and handheld gaming devices, are a fastgrowing segment in the line. These include FM transmitters and Bluetooth
handsfree kits, which have grown to become staple car accessories.

• Companies are enhancing ODM services to shorten design and development time for custom-made models. This allows them to compete more on the basis of functionality than on price, specifically in the low end.

• Cost cutting has limited makers’ product development activities. Some streamline R&D and manufacturing processes to reduce production outlay while decreasing the rate of returns.

• Although some suppliers offer lower quotes, price cuts are limited because of higher labor and component costs.

This report covers car audio systems, including speakers, subwoofers and amplifiers; car multimedia players and monitors; car GPS devices, car PCs, car electronic accessories such as Bluetooth handsfree kits; and car safety and security electronics, including car alarms, parking aids and keyless entry and remote starters.

The Industry Overview section discusses developments in China’s
supply, and key trends and R&D priorities in coming months.

 Guangdong province is a major production center for car electronics, with the cities of Shenzhen, Foshan, Dongguan, Huizhou and Guangzhou leading supply.

The supplier base is composed of companies with diverse manufacturing capability. Most offer a mix of car entertainment and consumer electronics, including monitor and A/V players. Some specialize in car security or GPS.

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