2022 China automotive electronics industry analysis report

First, development environment: Policy and economic dual promotion, automotive electronics development prospects

As one of the pillar industries of the national economy, the automobile industry occupies a very important position in the economic and social development. As an important part of the automotive industry, automotive electronics provides important support for the sustainable development and optimization and upgrading of the industry. With the increasing maturity of new energy vehicles, driverless and vehicle-mounted information system technologies, the application and innovation of automotive electronic technology have greatly promoted the progress and development of the automotive industry, and become a national key development and vigorously supported industry. In recent years, a number of national departments have successively introduced policies to support and encourage automotive electronics related industries, promoting and guiding the development and upgrading of the automotive electronics industry.

Second, development status: the market size has increased steadily, and the penetration rate of automotive electronics has gradually increased

With the continuous innovation and development of electronic information technology and people's pursuit of driving safety, comfort and entertainment, the application field of automotive electronic technology is expanding day by day. At present, the application of automotive electronic technology is still deepening, the development of automotive intelligent, networked and information technology makes automotive electronics have a broad application space, and the market size of China's automotive electronics industry has shown a steady increase in recent years. With the acceleration of automotive intelligence and electrification, the automotive electronics industry covers more areas of automotive electronic products manufacturing, and the market penetration rate of China's automotive electronics-related equipment and systems will continue to increase.

Third, the market pattern: Foreign automotive electronics enterprises occupy a dominant position in the market, and the competition of domestic enterprises is fierce

China's automotive electronics industry is currently in its infancy, most of the country's automotive electronics enterprises small scale, weak foundation, lack of technology accumulation, lack of core technology, technical standards are relatively backward, the lack of competitiveness of products, domestic manufacturers are mainly concentrated in the low-end automotive electronics market. Foreign automotive electronics giants have entered China and a comprehensive layout, almost monopolized the core technology field, all of which has brought a huge challenge to China's automotive electronics industry. At present, the development mode of China's automobile market has shifted from the period of high volume growth to the period of structural transformation and upgrading. As an important basic support in the automotive industry, the industry as a whole has shown a rapid growth trend under the joint action of policy-driven, technology-led, environmental protection and consumer traction.

Fourth, development trend: the degree of industry integration increases, and the proportion of automotive electronics in the value of the vehicle will continue to rise

In recent years, the automotive industry has been in the "new four modernizations" reform and integration stage, rapid iteration of technology, diversification of competitors, intensive introduction of policies and regulations, the new coronavirus epidemic, chip shortage and other issues have caused a huge impact on the global automotive industry, prompting the industry to accelerate integration, vehicle market pattern, industry chain cooperation mode are rapidly changing. With the continuous development of intelligent cockpit and autonomous driving technology, from high-end to low-end, new energy vehicles to fuel vehicles are fully covered, market penetration increases, and the proportion of automotive electronics in the value of the vehicle will continue to increase.

Keywords: automotive electronics development environment, automotive electronics development status, automotive electronics market pattern, automotive electronics development trend

Development environment: Policy and economic dual promotion, automotive electronics development prospects

Automotive electronics is the general term of vehicle body electronic control device and vehicle electronic control device. The most important role of automotive electronics is to improve the safety, comfort, economy and entertainment of the car, and the electronic control system composed of sensors, microprocessor MPU, actuators, dozens or even hundreds of electronic components and their parts. According to the impact on the driving performance of the car, the automotive electronic products can be classified into two categories: one is the automotive electronic control device, the automotive electronic control device should be used in conjunction with the mechanical system on the car, that is, the so-called "electromechanical combination" of automotive electronic devices. They include engine, chassis, and body electronic controls, such as electronic fuel injection systems, anti-skid control, and electronically controlled automatic transmissions. The other is the automotive electronic device, the automotive electronic device is an electronic device that can be used independently in the automotive environment, and it has no direct relationship with the performance of the car itself. They include vehicle information systems (driving computers), navigation systems, car audio and TV entertainment systems, vehicle communication systems, Internet access equipment, etc.

The upstream of the automotive electronics industry chain is mainly automotive electronic parts and components, and there are more suppliers in the upstream of the industry chain, including electronic component manufacturers, wafer manufacturers, package design manufacturers, etc., which are mainly responsible for providing the production of automotive electronic parts and components. The midstream of the industrial chain is mainly composed of system integrators, who are responsible for integrating upstream parts and components, and designing, producing and selling systematic functions, including vehicle networking systems, vehicle control systems, and auxiliary driving systems. The downstream of the industry chain is mainly the whole vehicle link, which is dominated by various types of car enterprises, and has a higher bargaining power in the industry chain. At present, the key enterprises in the automotive electronics industry mainly include Huayang Group, Desai Siwei, Hikvision, Geely Holding Group and so on.

As one of the pillar industries of the national economy, the automobile industry occupies a very important position in the economic and social development. As an important part of the automotive industry, automotive electronics provides important support for the sustainable development and optimization and upgrading of the industry. China's electronic automobile industry started relatively late, with the new energy vehicles, driverless, vehicle-mounted information system technology increasingly mature, the application and innovation of automotive electronic technology has greatly promoted the progress and development of the automotive industry, and has become a national key development and vigorously supported industry. In recent years, a number of national departments have successively introduced policies to support and encourage automotive electronics related industries, promoting and guiding the development and upgrading of the automotive electronics industry. Among them, the "14th Five-Year Plan for Digital Economy Development" issued by The State Council in December 2021 proposed that efforts should be made to improve the supply level of basic hardware and software, core electronic components, key basic materials and production equipment, and strengthen the self-support capacity of key products. We will enhance the competitiveness of key links in the industrial chain, and improve the supply chain system of key industries such as 5G, integrated circuits, new energy vehicles, artificial intelligence, and the industrial Internet. By February 2022, the "Guidelines for the Construction of Vehicle Networking Network Security and Data Security Standard System" issued by the Ministry of Industry and Information Technology points out that it is urgent to speed up the establishment of a sound vehicle networking network security and data security guarantee system to provide support for the safe and healthy development of the vehicle networking industry; Standardize the safety protection and testing requirements of key intelligent devices and components of intelligent connected vehicles, including vehicle gateways, electronic control units, vehicle security chips, vehicle computing platforms and other safety standards. From 2021 to June 2022, the relevant policies of China's automotive electronics industry are summarized as follows:

In order to better guide the high-quality development of the automotive electronics industry, various provinces and cities across the country have issued a series of incentive policies for the development of automotive electronics for their own provinces and cities. In May 2022, Hebei Province issued the "Hebei Digital Economy Promotion Regulations", proposing to accelerate the development of electronic information manufacturing, software and information services, focusing on promoting the development of new generation information technology industries such as automotive electronics and products, software products and services, artificial intelligence and intelligent equipment; We will promote the demonstration of smart connected vehicles and smart transportation applications, and improve the capacity of smart transportation and smart travel. In January 2022, Liaoning Province issued the Three-year Action Plan for Promoting the coordinated development of the "One Circle, One Belt and Two Regions" in Liaoning Province, which mentioned that it is necessary to expand and strengthen advantageous industries such as automobiles and parts, accelerate the promotion of intelligent advantageous industries, build a new generation of automobiles, expand and strengthen the whole industry chain of new energy vehicles, and develop vehicle manufacturing and power battery industries. Develop intelligent terminal products or components such as automotive electronics, and build a new generation of information technology industrial cluster of 200 billion in Dalian. The key points or tasks related to the construction of automotive electronics in the policies of some provinces and cities in China in 2021-2022 are as follows:

In recent years, China's economy has continued to develop, the per capita disposable income of the national has steadily increased and the purchasing power has continuously increased, and the proportion of consumer spending on improving the quality of life has continuously increased, providing a solid foundation for the development of China's automobile industry. According to the data of the National Bureau of Statistics, from 2012 to 2021, China's automobile production and sales showed a synchronous upward trend. Among them, automobile production peaked at 29.02 million units in 2017, and by 2021, the national automobile production was 26.53 million units, an increase of 4.78%, and the annual automobile production of banana in 2012 increased by 7.25 million units. The national automobile sales also reached a peak of 28.88 million in 2017, and by 2021 the national automobile sales will be 26.27 million, an increase of 3.79% year-on-year, and an increase of 6.96 million compared with 2012. The stable development of the automotive industry provides a broad development space and good development prospects for the automotive electronics industry.

Related report: "2023-2029 China Automotive Electronics Industry Market Research and Development Prospect Planning Report" issued by Zhiyan Consulting

Development status: The market size is increasing steadily, and the penetration rate of automotive electronics is gradually increasing

With the continuous innovation and development of electronic information technology and people's pursuit of driving safety, comfort and entertainment, the application field of automotive electronic technology is expanding day by day. At present, the application of automotive electronic technology is still deepening, and the development of automotive intelligent, networked and information technology makes automotive electronics have a broad application space and market space in the future. According to statistics, the market size of China's automotive electronics industry from 2017 to 2021 shows a steady upward trend, and the growth rate remains above 10%. In 2017, China's automotive electronics market expanded at the fastest rate, reaching nearly 19%. In 2021, the market size of China's automotive electronics industry is 889.4 billion yuan, an increase of 10.01% year-on-year, and an increase of 349.4 billion yuan compared to the market size in 2017. It is predicted that the market size of the national automotive electronics industry will reach 978.3 billion yuan in 2022.

Driven by the development trends of the Internet, digitalization, entertainment, energy saving, and safety, the level of automobile electronization is increasing day by day, and the proportion of automobile electronics in vehicle manufacturing costs is constantly increasing. According to statistics, in 2020, automotive electronics accounted for 34.32% of the total vehicle manufacturing cost, an increase of 19 percentage points compared to 1990. With the improvement and optimization of the research and development technology of automotive electronics in the future, the value of automotive electronics related equipment and systems will continue to increase, and it is expected that the proportion of automotive electronics in vehicle manufacturing costs will reach nearly 50% in 2030.

From the perspective of the market share distribution of the automotive electronics industry, the main product segments in China's automotive electronics industry are highly competitive, and the proportion of market shares is not much different. Among them, the power control system accounted for the largest proportion, accounting for 28.7% of the overall market; Followed by chassis and safety control systems, accounting for 26.7% of the overall market; Body electronics and vehicle electronics accounted for 22.8% and 21.8% of the overall market, respectively.

With the acceleration of automotive intelligence and electrification, the application range of automotive electronics in China has gradually expanded, and the automotive electronics industry has covered more areas of the automotive electronic product manufacturing industry. From the perspective of the market penetration rate of China's automotive electronics-related equipment and systems, the current rear reversing radar, central control screen, parking image system and cruise system are widely used, and their market penetration rates reach 86.3%, 85.6%, 78.5% and 72.6%, respectively. In addition, the penetration rate of other automotive electronics-related equipment and systems is below 40%, such as the market penetration rate of front reversing radar, LCD dashboard, collision prevention system, lane departure warning is 37.5%, 34.7%, 33.8%, 26.7%, although its penetration rate is relatively small, but with the development and upgrading of the automotive electronics industry, In the future, the market will have broad space for improvement.

Third, the market pattern: Foreign automotive electronics enterprises occupy a dominant position in the market, and the competition of domestic enterprises is fierce

China's automotive electronics industry is currently in its infancy, most of the country's automotive electronics enterprises small scale, weak foundation, lack of technology accumulation, lack of core technology, technical standards are relatively backward, the lack of competitiveness of products, domestic manufacturers are mainly concentrated in the low-end automotive electronics market. Foreign automotive electronics giants have entered China and a comprehensive layout, almost monopolized the core technology field, all of which has brought a huge challenge to China's automotive electronics industry. At present, the Chinese automotive electronics market, foreign manufacturers are still in a monopoly position in the market, these foreign factories are also the world's main automotive electronics manufacturers, mainly Bosch, Continental Germany, Delphi, Denso, Hyundai Mobius and Valeo. Among them, Bosch, Continental Germany, Denso, Delphi accounted for 12%, 11%, 10%, 8% of the market share of China's automotive electronics industry, and the four foreign enterprises accounted for 41% of the market share of China's automotive electronics industry. It can be seen that the current market pattern of China's automotive electronics industry shows that foreign-funded automotive electronics enterprises occupy a dominant position in the market, and domestic enterprises are in a fierce competition situation.

At present, the development mode of China's automobile market has shifted from the period of high volume growth to the period of structural transformation and upgrading. As an important basic support in the automotive industry, the industry as a whole has shown a rapid growth trend under the joint action of policy-driven, technology-led, environmental protection and consumer traction. In recent years, the registrations of automotive electronics related enterprises in China have shown an overall growth trend. From 2017 to 2021, the number of registrations of automotive electronics-related enterprises in China increased from 366,300 to 1,546,400, with an increase of more than 1.18 million during the period. Among them, the number of registrations of automotive electronics-related enterprises increased significantly in 2019, and the number of registrations of automotive electronics-related enterprises decreased slightly in 2020 due to the impact of the new coronavirus epidemic, but with the improvement of the epidemic and the support of national policies, the number of registrations of automotive electronics-related enterprises will usher in a significant growth again in 2021. It is predicted that the number of registrations of automotive electronics related enterprises in China will reach 1,586,100 in 2022.

From the perspective of the operating income of key enterprises in China's automotive electronics industry, in the first half of 2017-2022, the automotive electronics operating income of Huayang Group and Desay Siwei showed an overall growth trend. Among them, the operating income of the two companies in the automotive electronics business showed negative growth in 2018, due to the complex and volatile international economic situation in 2018, the stable and changing domestic economic situation, the sales decline of some models supporting the central control products, the reduction of product prices and the delay of new projects. In 2020, due to the impact of the epidemic and changes in the automobile market, the operating income of Huayang Group's automotive electronics business decreased slightly from the same period last year, but Desai Siwei still achieved the growth of the operating income of the automotive electronics business. In 2021, the domestic epidemic spread, the complex and changing economic environment, the shortage of chips in the automotive industry, and the rise in raw material prices, China's automotive industry still achieved growth, ending the decline of three consecutive years since 2018. Many automotive electronics companies seize market opportunities, overcome the tight supply of raw materials, rising costs and other operating pressures, order development continues to grow, mass production projects are delivered on time with quality, and cost control is good, which has brought a substantial improvement in the company's operating performance. In 2021, the operating income of Huayang Group's automotive electronics business is 2.946 billion yuan. This is an increase of nearly 500 million yuan compared to 2017. Desay Siwei's electronic business revenue in 2021 was 9.569 billion yuan, an increase of 3.56 billion yuan compared with 2017. In the first half of 2022, the operation of the two enterprises continued to maintain a good trend, and the operating income of Huayang Group's electronic business increased significantly. The operating income of Huayang Group's electronic business was 1.603 billion yuan, an increase of 19%. Desay Siwei Electronic business operating revenue reached 6.407 billion yuan, an increase of 57%.

From the perspective of the profitability of key enterprises in China's automotive electronics industry, in the first half of 2017-2022, the profitability of the automotive electronics business of Huayang Group and Desay Siwei is better, and the gross profit margin of the automotive electronics business is maintained at more than 20%. Among them, the gross margin of Huayang Group's automotive electronics business peaked at 25.85% in 2017, and its gross margin will be 21.19% by 2021. The gross margin of Desay CV's automotive electronics business also peaked at 25.78% in 2017, and by 2021 its gross margin was 24.6%. In the first half of 2022, the gross profit margin of the automotive electronics business of Huayang Group and Desay Siwei was 20.8% and 24% respectively, compared with the profitability of Desay Siwei.

Fourth, development trend: the degree of industry integration increases, and the proportion of automotive electronics in the value of the vehicle will continue to rise

The scale of the automotive electronics market continues to expand, and the penetration rate continues to increase

At present, there is still a big gap between China's per capita car ownership and developed countries, and China's automobile consumption market still has a broad space for development. With the continuous development of China's economy and the continuous growth of national per capita disposable income, the willingness of Chinese residents to consume automobiles will continue to increase, and the market size of the domestic automobile industry will continue to expand. On the one hand, in recent years, China's electronic information technology continues to make innovative development and breakthroughs, the state attaches importance to and supports the automotive electronics industry, and social enterprises have increased their investment in automotive electronics research and development year by year, so that the technical level of China's automotive electronics industry continues to improve, providing technical support and guarantee for the wide application of automotive electronics. On the other hand, with the increase of people's demand for driving safety, comfort, entertainment and energy saving, new energy electric vehicles, intelligent driving and other emerging industries with automotive electronics as the core equipment system have entered a stage of rapid development. Automotive electronic technology, as the basic core of automotive intelligence, networking and information technology, will usher in a broad demand space. The supply side of automotive electronics is guaranteed, and the demand side is growing, which will jointly promote the rapid expansion of China's automotive electronics market, and automotive electronics will maintain a high growth rate in the coming period, and the market penetration rate of automotive electronics related equipment and systems will continue to increase.

The integration of the automotive electronics industry has increased, and industrial cooperation has become closer

In recent years, the automotive industry has been in the "new four modernizations" reform and integration stage, rapid iteration of technology, diversification of competitors, intensive introduction of policies and regulations, the new coronavirus epidemic, chip shortage and other issues have caused a huge impact on the global automotive industry, prompting the industry to accelerate integration, vehicle market pattern, industry chain cooperation mode are rapidly changing. With the continuous improvement of the user's demand for safe, comfortable and efficient driving experience, the vehicle system performance requirements are becoming higher and higher, the computing power requirements are becoming stronger and stronger, and the need to break through the bandwidth bottleneck, ensure the safety of the function and real-time, so the electronic and electrical architecture of intelligent vehicles is moving from distributed to centralized. With the gradual upgrading and evolution of intelligent vehicles, the market size has expanded rapidly, the technical barriers of the industry have increased rapidly, and industrial cooperation will also be closer.

The proportion of automotive electronics in the value of the vehicle will continue to increase

In recent years, the trend of electrification and intelligence in the automobile industry is obvious. With the continuous development of intelligent cockpit and autonomous driving technology, from high-end to low-end, new energy vehicles to fuel vehicles are fully covered, market penetration increases, and the proportion of automotive electronics in the value of the vehicle will continue to increase. In addition, on the one hand, fluctuations in the automotive industry, exchange rate fluctuations, upstream raw material prices and supply shortages, and the impact of the new coronavirus epidemic will push up the cost of automotive electronics; On the other hand, as cars enter the electrification and intelligent development and consumers' requirements for safety, energy saving and environmental protection continue to increase, automotive electronic technology dominates the direction of the progress of the automotive industry to a certain extent, and the competition of locomotive technology in the future will be more and more reflected in the competition of automotive electronic technology. Therefore, automotive electronics companies have gradually increased the R&D investment in automotive electronics business in recent years, vigorously promote the iterative upgrading of product technology and the research and development of new products, so as to enhance the value and competitiveness of automotive electronic equipment and systems, and ultimately will promote the proportion of automotive electronics in the value of the vehicle.