Research Overview
Price Pressure at Retail Level Percolates down the Entire Automobile Value Chain, Even to Safety Restraint System Companies
North American vehicle manufacturers have been constrained to increase retail prices due to the pervasive trend of rebates and zero-percent annual percent rate (APR) on automobiles. This pricing pressure trickles down to the entire value chain of participants from automakers to Tier I, Tier II, and Tier III suppliers. Since consumers have started getting used to these rebates as a standard operating procedure. Safety restraint systems suppliers are under immense pressure to reduce costs by increasing production efficiencies, shifting production to low cost countries and through the use of innovative manufacturing technology.
This Frost & Sullivan strategic analysis service provides an overview of and an outlook for the North American safety restraint system markets. It has been segmented into occupant restraint systems, pedestrian, and vehicle crash compatibility systems. The research provides detailed revenue and market forecasts to help design marketing strategies and maximize growth. It enables companies to align their positioning strategies to benefit from the changing markets and obtain maximum return on investment.
Regulations Drive Uptake of Safety Restraint Systems
Normally, regulatory activity deals with the crashworthiness of vehicles and the prevention of fatality or injury through passive safety systems such as safety restraints. The National Highway Traffic Safety Administrations (NHTSA) proposed upgrade to Federal Motor Vehicle Safety Standard 214 (FMVSS-214) for side-impact protection mandates a variety of side impact protection ? curtain/side airbags or any other ? to be implemented by 2006 to 2009. Installation of frontal airbags on both the driver and passenger sides in all passenger cars and light trucks has been compulsory for some time now.
The NHTSA is also reported to be considering the possibility of enforcing the use of improved seatbelts and stronger roofs to prevent rollover fatalities. Some innovations being considered by the NHTSA include pre-tensioners that eliminate slack by getting activated within a split second of the beginning of a rollover, seatbelts that are integrated into the seat instead of being anchored to the B-pillar, four-point seat belts, and retractors that pull passengers into seats. "The NHTSA is also considering mandating shoulder seatbelts for center rear seats," says the analyst of this research. "Currently, only a lap belt is required for this seat."
Healthy Consumer Demand and Legislative Pressures Boost Market Growth
Manufacturer-level revenue for the safety restraint systems are estimated to reach $4.11 billion in 2010 on the strength of significant growth in unit shipment for a few important safety systems. This demand is likely to be driven by automakers installing safety systems in response to mounting demand, competition, and legislative requirements. "System prices are, however, expected to decline for all the systems by different degrees due to technology and productivity improvements as well as the economies of scale as volumes grow," notes the analyst.
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