How advances in automotive systems are changing passive components requirements


The automotive industry is entering a period of rapid change. Car makers will have to adapt to multiple, concurrent challenges such as new market entrants, tougher emissions standards, vehicle electrification and the shift to mobility platforms, as well as customer demands for greater safety, autonomy and connectivity.


The good news for passive component makers is that addressing many of these issues will demand additional and more sophisticated vehicle electronics in which their parts will play a wide variety of key roles.


According to a recent McKinsey report, car makers face four key challenges, which will, in turn, set the context for automotive component makers until at least 2025.


The first is to cope with the increasing complexity and cost pressures caused by tightening safety and environmental standards, the trend to create more derivatives from each vehicle platform to service niche markets, and the need to keep developing alternative powertrain options to serve as-yet undefined future demand.


The second big challenge, according to McKinsey, is to move car manufacture and its associated supply chains closer to fast-growing emerging markets, whose share of the global car market is expected to grow to 60 per cent by 2020. This will also create demand for new models to match local preferences, such as for smaller vehicles.


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The third big challenge is driven by the digital revolution, which is driving customers’ expectations of vehicle cabin environments. Where once an SUV was sold, in part, on its deployment of cupholders, today the right choice of hook-ups for mobile phones, tablets and internet connectivity has become equally important.


The fourth major challenge is the shifting car industry landscape, in which component makers will supply more of the value-added content of a vehicle, production will move closer to growing markets, the European market will be restructured, and new entrants, be they Chinese e-vehicle makers or Apple, Google, and Uber, will challenge the incumbents.


Drivers for increased use of passives


What do these macro-economic and industry-wide trends mean for the makers and buyers of passive components? Many market intelligence companies, of varying credibility, offer trend analysis reports, market forecasts and expert insights. Taken together, they paint a picture of a car industry that is increasing the electronics content of every vehicle it makes, and applying electronics to a growing variety of tasks, not just up-and-coming features such as vehicle autonomy.


For example, customer and regulatory pressure to improve driver, passenger and pedestrian safety, is driving a wave of safety innovation that, in turn, demands greater use of passive components.


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