Frost & Sullivan: Healthy Competition Between Vehicle Manufacturers to Drive Development of Active Safety Systems in Japan

KUALA LUMPUR, Malaysia, August 24, 2010: Healthy competition between vehicle manufacturers is expected to drive development of active safety systems in Japan.

"Greater consumer awareness about the importance of vehicle safety is encouraging Japanese vehicle manufacturers (VMs) and suppliers to increasingly focus on developing and standardizing active safety systems rather than passive systems," said Mr. Masaki Honda, Senior Consultant at Frost & Sullivan Automotive & Transportation Practice, Asia Pacific.

He added that the mature passive safety systems segment, with almost 100 percent adoption rates, offers far fewer opportunities than the vibrant active safety systems segment in the passenger vehicle safety systems market.

Mr. Honda said Japan's passive safety systems segment is expected to see flat growth with revenues increasing at a CAGR (compound annual growth rate) of 0.4 per cent until 2014 to US$1.4 billion. He added that revenues for the active safety systems segment would grow at a faster pace at a CAGR of 3.2 per cent until 2014 to US$2.5 billion.

New analysis from Frost & Sullivan (http://www.automotive.frost.com/), Strategic Analysis of Japanese Passenger Vehicle Safety System, finds that active safety systems is expected to earn an estimated revenue of US$2.21 billion in 2010, growing 1.37 per cent year-on-year; while shipments will grow 3.66 per cent to 14,473 units.

Meanwhile, passive safety systems is expected to earn an estimated revenue of US$1.4 billion, growing 0.1 per cent year-on-year; while shipment will increase 2.3 per cent to 30,164 units.

If you are interested in more information on this study, please send an e-mail to Alice Chia, Corporate Communications, at alice.chia@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.

"For instance, vehicle stability control (VSC), as an active safety system, is expected to be available across all segments to reduce accident rate due to sudden elusive maneuvers by drivers in emergency situations," Mr. Honda said.

He added that vehicle manufacturers and suppliers are developing an advanced type of drive assist technology incorporating intelligent transport system (ITS), which is expected to help the Japanese government achieve its target of 5,000 or less traffic fatalities by the end of 2012.

However, device sophistication comes with a heavy price tag, which often hinders mass adoption. The higher costs of active safety systems have put them out of reach of smaller and cheaper vehicles. Therefore, vehicle manufacturers are working on producing affordable and user-friendly systems so that consumers pick active systems over passive ones.

Mr. Honda said that unlike in Europe and the Americas, Japan does not enforce the use of active safety systems such as VSC and tire pressure monitoring system (TPMS). "This fosters healthy competition among vehicle manufacturers, which, in turn, promotes product development of active systems," he added.

"Active safety systems use new technologies and more expensive parts such as sensors and radars, which ramps up their costs," notes Mr. Honda. "Developing low-cost sensors and radars and integration of systems will help to lower system costs and increase adoption rates."

Strategic Analysis of Japanese Passenger Vehicle Safety System is part of the Automotive & Transportation Growth Partnership Services program, which also includes research in the following markets: Strategic Analysis of the Japanese Commercial Vehicle Market, Analysis of Japanese Powertrain market, Strategic Analysis of Passenger Vehicle Market in Thailand, Strategic Analysis of Passenger Vehicle Market in Malaysia, Strategic Analysis of Passenger Vehicle Market in Indonesia, and 360 Degree CEO Perspective on Green Transportation: Focus on Rail, Automotive and Procurement. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

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