High-Tech Dashboards to Boost Electronics Market in Auto Industry

Published on: 29 Jun, 2017

There is a race amongst auto supply companies to provide a new high-tech dashboard for the next models of cars.

Current dashboards in auto vehicles, crammed with digital features such as navigation and entertainment systems, are composed of parts from six to ten auto suppliers. The process of drawing from so many different suppliers makes production more complicated and expensive.

Visteon Corp. (NYSE: VC) is one of many corporations aiming to make dashboards simpler, cheaper, and lighter as the auto industry accelerates to the “virtual cockpit” -- an all-digital dashboard that will aid the imminent use of self-driving cars.

Streamlined dashboards can lead to cost reductions for manufacturers, who can save as much as $175 per car with an integrated cockpit, according to Munich-based management consulting firm Roland Berger. They can also aid fuel efficiency, since vehicles will be lighter due to a decrease in the amount of electronic control units (ECU). But most importantly, consumers will be attracted to a technologically advanced cockpit which will boost car sales drastically.

Visteon’s solution is “SmartCore,” a computer module that will operate a vehicle’s instrument cluster, infotainment system, and other features on one screen. The company has already negotiated two big contracts this year: one with China’s second-largest automaker, Dongfeng Motor Corp. (HKG: 0489), and the other with Mercedes-Benz (ETR: DAI).

The dashboard electronics market currently stands at $37 billion. According to accounting firm, PwC, that number is estimated to nearly double to $62 billion by 2022. The firm also predicts that electronics will account for up to 20 percent of a car’s value in the next two years, up from 13 percent in 2015.

Meanwhile, suppliers like Visteon are hoping to take a lead in the industry as automakers look to work with fewer companies capable of doing more, according to Mark Boyadjis, principal automotive analyst at IHS Markit. "The complexity of engineering ten different systems from ten different suppliers is no longer something an automaker wants to do.

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Austin Chiu

Email: Austin@financialinsiders.com

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