Automotive Safety—Global Trends and Implications for Indian OEMs

Car makers need Highest star rating with lowest price increase; additional safety features don’t drive higher sales due to low customer awareness

Scope & Limitations

Death rates due to road accidents per 100,000 inhabitants:

Globally, with saturation in innovation in passive safety systems, OEM and supplier focus has shifted to accident avoidance systems in developed markets

Regulation is a key driver for growth of Active Safety Systems across the world

European Union is at the forefront of making cars safer by mandating ESC, TPMS and Emergency Braking technologies

Even a developing country like Brazil is moving from passive safety toward active safety systems like ABS, ESC etc.

Fuelled by push for Active Safety Systems by NA and Europe, the global safety systems market is expected to reach $29 Billion by 2017

Approximately half of all deaths on the country's roads are among -motorcyclists, pedestrians and cyclists

Fatal accidents have fallen; however, numbers of people killed has shown a marginal upswing, post an almost flat run

While developed markets are moving toward crash mitigation and avoidance, India is just entering the damage reduction phase

Current airbag penetration in India stands at a mere 15% while ABS installation is estimated at around 22%

Current National Safety Policy is to align with ECE regulations to the extent possible

Existing safety regulations do not mandate adherence to crash safety standards

India is poised to have full fledged crash test standards by 2020 – BNVSAP (Bharat New Vehicle Safety Assessment Program)

BNVSAP implementation:

Europe and NA saw gradual introduction of safety norms; India will see quick adoption of passive safety technologies

Strong price sensitivity and diverse customer purchase preferences hinder penetration of passive safety technologies in the Indian market

BNVSAP impact on prices:

Increased cost of vehicles will affect OEM margins forcing suppliers to contain costs making the value chain highly competitive

Active safety systems will be key contributors in developed markets; whereas in growth markets like India passive safety will continue to be key

Car makers need to balance costs despite legislative push for safety: India’s price sensitive customers will opt for within-budget safety features

Glossary

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