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Published- June 2021
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In vehicle entertainment (IVI) has always been an important feature for car manufactures and owners alike, improving the overall car ownership and driving experience.
Till early 2000s, IVI in most cars was limited to just radio and music until GPS became accurate enough for drivers.
By 2010, many standard, mid and high segment cars had 2-Din systems, which had Bluetooth connectivity, navigation and multi-media display. In early 2010s, the car industry saw the advent of in-car Wi-fi with smartphone app integration as a major selling point.
To know more about Global Automotive Display Market, read our report
Fast forward 2021, and now touchscreen infotainment system is a quintessential feature of almost every passenger car sold globally.
To know more about Global Electric Vehicle Infotainment Market, read our report
The global smartphone penetration as of September 2021 stands at 73% and >82% for car buyers, thus car entertainment cannot be secluded from smartphone connectivity. This is also the reason why Smartphone connectivity using CarPlay or Android Auto is becoming a default feature in most cars. These features allow users to have the same interface with their cars as their phone, allowing higher degree of personalization.
Among the lower B&C segment vehicles, infotainment from VW Golf and BYD Song Pro standout. BYD has one of the best voice recognition tech whereas Golf`s infotainment looks very premium for the segment.
Mercedes in a statement earlier in May 2020 said that over 80% of their users say Voice is the most important control element in the car and an equal number of its users also believe voice commands make searches easier and fast.
The screen size segments XX” and XX” will continue to dominate the market until 2025. Around XX M units will be sold in this category by 2025 growing at 7.2% CAGR
Since the cluster system in an EV requires new design, OEMs are choosing to integrate the entire cockpit for a single display interface to enable simplicity and reduced mechanical parts
Touchscreen infotainment systems are now also seen as “the enabler” for auxiliary means of revenue generation from car sharing, vehicle subscription etc. But in Post COVID-19 world, we believe there will be a consumer shift from sharing services to personal mobility.
With the blistering growth of EV market, touchscreen infotainment market got a major boost as it is a must to find nearest charging station, vehicle range status, drive mode and other important vehicle parameters.
As discussed earlier, consumers are now looking for higher degree of personalization and that is where Artificial intelligence (AI) has started to make a world of difference.
AI can completely personalize the user experience by predicting his/her next choice in a few seconds which would otherwise require a physical effort. The growth of AI could also allow cloud-based content to be monetized to a greater degree.
The importance of AI in automotive touchscreen infotainment systems can be judged by the fact that more than 10 partnerships between auto and tech companies have been struck in past 12 months alone.
Amazon`s Echo voice assistant will be available on Volvo and BMW whereas Alibaba`s version will be available in the Chinese market on Audi, Renault and Honda.
Among the 400+ EV start-ups in China, the Byton M-Byte has e a 48-inch display, running the entire length of dashboard, but it is one of the first casualty of COVID-19 in EV market. It suspended its domestic operations in June 2020 and furloughed staff. The company recently said it is making efforts to obtain funding to pay salaries owed.
Qualcomm in September 2021 announced the development of an in-vehicle infotainment system in collaboration with Google for Renault’s new Megane E-Tech Electric, the next generation electric vehicle. The automaker will incorporate the 3rd generation Snapdragon automotive cockpit platform to power the vehicle’s advanced infotainment system. The system is a portrait sized touchscreen display for multimedia, visual and navigation features. It will come with built-in Google assistant, maps as well as Play.
General Motors in partnership with AT&T technologies have announced plans to develop 5G cellular connectivity for GM vehicles for the next decade for the US market. The 5G connectivity will be available in the infotainment systems of the vehicles to be produced by 2024. They will be equipped with Microsoft’s scalable and secure cloud services.
Stellantis NV in collaboration with Hon Hai Precision Industry commonly named Foxconn company and its subsidiary FIH Mobile have signed a non-binding memorandum of understanding to develop a mobile drive innovative to the existing in-vehicle infotainment systems which will be enabled by advanced electronics, HMI interfaces and services.
Globally, the automotive operating system is gearing from single function towards the intelligent tiered, modularized and platform-based development. For example, in future, Volkswagen will have one uniform software platform (consisting of vehicle operating system “vw.os” and the Volkswagen Automotive Cloud) for all vehicles throughout the Group. By 2025, all new models from the VW group are to run on this software platform.
In future, we expect further evolution of domain controllers like cockpit domain controller to integrate ADAS, connected car gateway and heads-up display resulting in cost optimization and reduced weight.
The automotive touchscreen infotainment system offered in budget, A- segment cars cost <$200 per unit, offer a 6-7-inch touch screen, less responsive- resistive touch screen, Bluetooth connectivity, low power processors and low pixel density display.
In the mid, B-C segment cars, a 7-8-inch capacitive touch- screen, with smartphone connectivity is standard with optional on-board connectivity and navigation.
In Europe, Volkswagen has equipped its cars with e-Sim on higher trim cars like Golf, Polo, Tiguan, T-roc and Passat. These cars are equipped with 8-inch Centre console touch display as standard and Passat gets 9.2-inch touch display as Option and smartphone connectivity features like Android auto and Apple car Play are provided on higher trim.
In the premium segment, 10-15-inch screens can be commonly found with voice recognition display, AI assistant, augmented-reality navigation,20+ remote controlled features (enabled via e-sim).
The global automotive infotainment system market size is estimated at $XX Billion in 2021, growing at –% CAGR till 2025. Due to COVID-19, the global automotive infotainment market declined by at-least 18% worldwide in 2020.
Need for integration of advanced features as well as the instrumentation is driving OEMs to consider consolidation of entire cockpit for better user experience and reduced parts.
In US almost every top selling vehicle among top 30 is equipped with at least a screen size of 7”. However, Ford’s Edge and Fusion are exception as they are fitted with 4.2” and 6.5” respectively.
The Harman occupied the top spot in terms of market share with ~27% penetration in the infotainment systems, followed by Panasonic with ~19%
The below list is of top selling vehicles in the region and the type of infotainment system incorporated in them
The infotainment systems are based on the type of display incorporated in the vehicles. The most common types of display are the 7 inch, 8-10 inch and greater than 10 inch display. Honda has the highest number of vehicles whose screen size is 7 inch size however, as new developments take place the penetration of this industry in the automotive market is increasing. Mazda car line-up was mostly equipped with an infotainment system whose screen size is greater than 10 inch. The trend is followed by RAM and Hyundai which mostly use greater than 10 inch display screens.
The CAGR predicted for the years 2020-2025 for the growth of infotainment systems in the US is XX%.
8-10” screen size is the most popular type in the region as almost 50% of the vehicles in the region is fitted with screen of this size. Among top 30 sellers there are 5 models whose screen size is sub-5” i.e., 4.2”, which is also the lowest in the region.
Visteon acquired the highest market share in the European Union with ~14%, followed by Harman.
Across Europe, the number of vehicles adopting the 8-10 inch displays is higher as compared to that in USA where 7 inch displays have the higher market penetration.
Mercedes Benz models are mostly fitted with an infotainment system of screen size greater than 10 inch, followed by Skoda and Peugeot. Ford and Volkswagen’s top sellers mostly had infotainment systems with display size between 8-10 inch.
China commonly makes use of the 8-10 inch displays as part of the infotainment systems, followed by the >10 inch displays. OEMs such as BAIC, Jetour & HYundai among top sellers had infotainment systems of >10 inch display but also incorporated 8-10 inch displays in smaller vehicles.
Hangsheng Electronics occupied the highest market share with ~17% penetration, followed by Harman with 12%.
The company CHJ Automotive which is an electric vehicle manufacturer based in China launched a smart electric SUV named ONE. The vehicle is incorporated with a four-screen infotainment system which includes a smart voice system. The vehicle features a dual chip system as well as a dual system structure which is equipped with a Qualcomm Xiao Long 820A-class chip as well as with an android automotive compatible system.
BAIC Yinxiang Automobile company recently collaborated with ADAYO which is a subsidiary of Foryou corporation. The company specialises in the development and design of infotainment systems for vehicles, GPS, Beidou as well as GLONASS, the company’s single/dual-mode navigation system and ADAS. The partnership is set to develop new platforms for BAIC’s product restructure with a platform of infotainment systems.
The Japanese market mostly incorporates 8-10 inch displays as infotainment systems except for Subaru which had models mostly with 7 inch displays. The market is dominated by 7 and 8-10 inch displays, where the companies using > 10 inch displays are found in very few models of Nissan, Volkswagen and Toyota.
The Asia-Pacific market is estimated to grow at a fast pace with growing demand for luxury, high end vehicles with infotainment systems and other digital services.
However, the penetration of the market in the Indian market is relatively less, major automakers in India are now focusing on developing infotainment systems. For instance, Maruti Suzuki launched the Smartplay infotainment system in the new model of WagonR, Hyundai launched the new model of Santo with an infotainment system with smartphone connectivity. Renault has also announced plans to launch the new model of Kwid with Apple CarPlay as well as Android Auto-across.
The infotainment system market in India was very basic & the is miles behind the global trends. It is only now that the automakers are developing new technologies creating a sustainable market for infotainment systems.
Most of the automakers make use of 7 inch displays with very less penetration of >10 inch displays in the market.
Very few OEMs among the top sellers equip >10 inch displays in India such as Hyundai followed by Toyota which is set to launch new vehicles including such displays.
The market is dominated by use of 7 and 8-10 inch displays with little or no penetration of >10 inch displays. The OEM that had most models with >10 inch display is Volkswagen. The OEMs that are mostly into 7 inch displays are Kia, Honda and Fiat.
The impact of the COVID-19 pandemic on the infotainment system for the automotive industry is primarily driven by the sales of vehicles and their production. The sales of the vehicles during the pandemic decreased due to the lockdowns put in place by governments across the globe. Due to the lockdowns and halt in production and manufacturing activities, the sales of vehicles experienced a slow growth.
The major hit for the automotive industry is due to the shortage of semiconductor components and chips. The shortage was created mainly due to the lockdown in China and Taiwan. The industry is now trying to recover the market but due to the excessive backlog, the shortage is affecting the automotive industry the most. Many OEMs including BMW, Audi and Tesla have announced the delay in the launch of new models and delivery of existing orders due to component shortage. Some companies have started to use analog meters and devices from the old models to be incorporated in their vehicles.
With the development of new technologies in the automotive industry the demand for semiconductors in smaller size ranges is increasing. The most advanced microcontrollers and processors with size around 7-14 nanometers or even smallers are used in the leading-edge technology applications. With the development of 5G technology, the rollout for a larger number of radio-frequency semiconductors is increasing.
The below infographic shows the market share of major players in the automotive infotainment industry
The global automotive infotainment system market value chain is comprised of four categories of vendors i.e., touchscreen display providers, technology providers, chip/processor/storage providers and ultimately the integrators (complete system providers) who work closely with the car manufacturer to deliver the complete infotainment system to be fitted on the vehicle assembly line.
The average B-2-B prices can range anywhere between $200-$800 per unit and is highly dependent on annual volumes. All suppliers look to secure Long term, Multi-Million dollar deals from OEM for increased cashflow.
The gross margins vary for suppliers between 22-27% and the EBITDA levels are at 10-12% i.e. at par with Automotive lighting market suppliers
HARMAN is World`s market leader with 26% market share of infotainment system in 2019.It is a complete end to end provider including sound system ranging from JBL to Mark Levinson.
Continental is one of the biggest innovators in automotive electronics, powertrain and ADAS. It has already partnered with Pioneer (May 2020) for Asian markets.
In China, many domestic vendors have developed their own operating system to be deployed across all vehicles in the portfolio. For Ex- In February 2020, NIO launched the NIO OS 2.5.0 version in-car system and upgraded three important aspects of its vehicles i.e , NIO Pilot automatic assisted driving, digital instrument cluster and suspension.
ARCFOX(BAIC`s upcoming EV brand launched in May 2020) has new generation 5G chip from Huawei which is Industry’s first 5G-V2X hardware module.
Alpine Electronics announced the integration of the management with Alps Electric in the year 2019. Alpine is the leading system design and software development company and Alps electric develops core device technologies incorporating advanced electronic components such as EHI, sensing devices, mobile devices as well as communication device technologies. The collaboration is all set to incorporate new technologies such as the HMI cockpit.
In the year 2020, LG Electronics and Cerence incorporation which is an automotive voice recognition solution provider based in the US signed a partnership to develop an infotainment system based on the web OS auto based IVI system. The system is set to be equipped with voice recognition features.
Continental AG recently released the half-yearly financial report for the first half of the year 2021 with the sales worth $23.7 billion which was an increase from the previous year which reported $19.5 billion for H1 of 2020. The sales of the automotive technology department was $9.2 billion for the same term, an increase from the H1 of 2020 which reported $7.9 billion worth sales.
The company received a major order to develop and manufacture a pillar-to-pillar display from a leading automaker. The display system is set to go into production by the year 2024 which will enhance the visual interface between driver and passenger digital driving experience. The company has also become a strategic business partner with Pioneer to develop new user experience infotainment systems.
Denso Corporation recently released the first quarter results for the fiscal year 2022 with the total consolidated revenue of $12.3 billion which was a 77.3% increase from the previous year same quarter. The company also stated that the revenue has significantly increased due to the recovery in sales of vehicles and production activities from the COVID-19 pandemic.
One of the leading manufacturers of this sector, Visteon recently announced the fiscal results for the second quarter of the year 2021. The company recorded net sales worth $610 million which was a whopping 59% year on year increase from the Q2 of 2020 reporting net sales worth $371 million.
The company also announced that Geely Auto’s new Xingyue L flagship SUV will be the first production vehicle to incorporate the intelligent cockpit system developed with Qualcomm technologies and ECARX.
Qualcomm Incorporated announced the acquisition of NUVIA, a leading CPU and technology design company, by its subsidiary Qualcomm Technologies for $1.4 billion. With the acquisition, the company has plans to integrate the next generation CPUs across a wide variety of products such as digital cockpits, smartphones, laptops as well as ADAS systems. The company also announced the third quarter financial results for the year 2021, with revenue worth $8,060 million which was a whopping 65% increase from the revenue of the same quarter of the year 2020 recorded as $4,893 million.
As vehicle Facelift and upgrade(next gen) timeline continue to decline over past 8-9 years and is now 28-32 months for facelift and 60-66 months for new gen, R&D lead time is also shrinking. As infotainment systems are now an important selling point for many OEMs, they are updated in a facelift as well as generation update. One common aspect for every facelift and generation change is upgraded infotainment system
To know more trends , Please read our report Global Automotive Infotainment OS Market
At the CES 2021, premium car manufacturers Mercedes-Benz unveiled the MBUX Hyperscreen
To know more about car Audio developments, read our Car speaker market report
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