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Airbag Industry~Quo Vadis? The Industry's Structural Changes: Balancing Globalization, Economy and Technology
Published December 04, 2000 by Fraunhofer Institut Chemische Technologie in Germany
Event: Airbag 2000
The structural change at the OEMs has progressed quite intensively producing similar effects in the branch of automotive suppliers. In the Airbag Industry the consolidation process has lost its dynamic and is now focusing on system integration.
After the booming phase car production is expected to stagnate on a high level. The formerly strong pace of growth out of West Europe will transfer to Asia and Latin America.
Through an intensely degrading number of car platforms the average platform volume is continuously increasing and consequently related order volumes and also order risk is affected.
On a mid-term base OEM profit is expected to decrease and probably price pressure on airbag suppliers will become higher again.
Vertical integration for special technology is fundamental for airbag system suppliers to gain the necessary profit level for pre-development work expected by OEMs. On a long-term aspect car mega-modules are expected to initiate further consolidation on Tier 1/0.5 level.
Market penetration for front bags has nearly reached its peak in Europe, whereas for side bags a remarkable potential till 2006/07 is forecasted unfortunately coupled with decreasing margins. The slope of growth and product innovation through conventional technologies will diminish by approximately 2008 resulting in the direct link of the Airbag Industry to the demand cycle of the automobile industry.
Further growth potential is forecasted in the interaction and integration with active vehicle safety. Through this the number of electronic components and functions will increase dramatically, consequently requesting different core competencies compared with the ones actually available in the Airbag Industry. It gets even more difficult looking at today's drastically change structure of resources showing the need for long-term and early global acting.
To sum it up on a mid-term scale the outlook is still optimistic, but for long-term aspects an acceptable growth with sufficient profit is only expected in the mechanically and electronically integration in car mega-modules resulting in changing market position of the Airbag Industry with regard to the supply chain.