The exponential growth of the automobile industry and increased rate of road accidents worldwide have reinforced the global automotive airbag market, which has certainly emerged to be a highly profitable investment avenue over the past decade. Irrefutably, vehicle safety systems such as airbags, severely lessen the force exerted on passengers during a crash, improving their chances of survival by a significant margin. According to the National Highway Traffic Safety Administration, since the 1960s, in the U.S. alone vehicle safety technologies have saved more than 600,000 lives, with airbags accounting for more than 70,000 of the mammoth number.
U.S. Automotive Airbags Market, By Position, 2018 & 2025, (USD Million)
While the effectiveness of this safety provision is overtly prominent, a study by the World Health Organization discovered that the number of road traffic accident deaths have been rising steadily. Indeed, estimates by WHO claim that around 1.35 million lives are lost annually on account of road traffic crashes. The study also discovered that 93% of the road traffic accident fatalities occur in low-to-middle income countries, that do not have relatively strict and effective road safety regulations or mandatory inclusion of passenger safety precautions. This has quite overtly, generated the need for stricter laws that enable the inclusion of vehicle safety gear – a need that would eventually help propel automotive airbag industry.
Impact of the European Union’s tightening vehicle safety guidelines on the automotive airbag market
The Conditions: When it comes to passenger safety, the European Union boasts of having the safest automobiles and roadways in the world. While roads across the EU are substantially safer, the number of road traffic fatalities is still relatively high. In fact, according to the European Commission, in 2017 approximately 25,300 individuals lost their lives on the roads across EU .
The Target: The 2017 numbers depicted a 2% decrease as compared to the numbers a year prior. However, the decline rate does indicate the region would be reaching its 2020 target of halving fatalities compared to the estimates recorded in 2010.
The Opportunity: The EU road traffic safety situation widely differs between the member states, with some of them reporting significant progress while others performing substantially below the EU average. This disparity presents a lucrative opportunity to the regional automotive airbag market as tightening regulations and the fast approaching 2020 target deadline provides the lagging member states an impetus to further improve their vehicle safety policies.
Recent events supporting the growth: In March of 2019, the European Commission levied a fine of more than €368 million on vehicle safety equipment suppliers for partaking in two cartels and breaching the EU antitrust rules. The elimination of such barriers to businesses expansion is expected to propel the automotive airbag market share tremendously over the forthcoming years.
Impact of the emerging vehicle safety policies in Asia Pacific on the automotive airbag industry
The Potential: Asia Pacific is the biggest automotive market in the world and is home to three of the world’s ten biggest automobile markets; China, Japan and India. The remarkable economic growth experienced by two of the world’s largest emerging economies, China and India, has been listed as one of the key factors driving the expansion of the automobile sector and subsequently, the automotive airbag market, in the continent.
The Numbers: In terms of numbers, India is shaping up to gain more prominence as an automobile consumer, driven by the rapidly improving disposable incomes of the population. The Indian Brand Equity Foundation reported that India was the world’s fourth largest automobile market and had recorded a 9.5% year-on-year growth in sales back in 2017.
The Conditions: While the nation’s automotive industry is expanding, the growth has also raised the percentage of road accidents by a notable margin. According to the Ministry of Road Transport and Highways, Government of India, in 2017 approximately 464,910 road accidents were reported with 147,913 of them turning out to be fatal.
The Projections: Apparently, 2017 also marked the year when the Government of India made airbags as well as other passenger safety features mandatory for new automobiles, paving the way for the regional automotive airbag market to register attractive gains through rising automotive sales.
All in all, the revenue graph of the automotive airbag industry is projected to depict substantial gains over the forecast timeframe due to a surge in automobile consumption and stricter safety policies. Global Market Insights, Inc., estimates that the overall automotive airbag market size would exceed the $85 billion renumeration mark by 2025.