Latin America ADAS Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
The Latin America Advanced Driver Assistance Systems (ADAS) market is anticipated to register a CAGR of about 7.5 % during the forecast period (2020 - 2025).
The road safety performance can be evaluated in terms of deaths and serious injuries, which are usually linked to driver negligence, like not using a seat belt, over speeding, and inadequate experience.
According to the World Health Organization (WHO), annually, over 1.4 million people lose their lives in road traffic crashes. As a result, autonomous vehicles are equipped with features like alcohol interlocks, fleet drivers, electronic stability control, and anti-lock braking for motorcycles. Thus, providing safety measures to both the driver and pedestrians.
There is a growth in government regulations pushing towards upgrading the safety standards of vehicles in the Latin American automotive industry. They also aim to replace the cheap machinery with high tech machinery to combat against road accidents and environmental issues.
With these growing regulations on vehicle safety, the automotive industry will see some of the mandate ADAS features equipped in vehicles during the forecast period. Thus, in the region, automakers can capture the potential demand for the ADAS market during the forecast period. Also, with advancements in AI and IoT and with ever-growing dependence, the need for automobiles will no longer be limited to electric vehicles. ADAS software will become the driving factor for the future of the automotive industry.
By 2025, due to the growing demand for increased regulation norms by all the government for safety and environmental reasons, companies will see a rise in demand for mandatory features for cars to be equipped with an Advanced Driving assistant system for all upcoming vehicles.
Since 2017, Mexico recorded a valuation of USD 12 billion in vehicles and related component sales and is only increasing since then. Today, in 2019, Car exports make up to 12 percent of the exports and vehicle parts, making an additional 6.7 percent. Moreover, Mexico, the fourth largest automobile exporter in the world and also in 2019, the automotive sector for the first time, became the country's most significant contributor to manufacturing GDP.
Mexico, followed by Brazil, is one of the largest manufacturers of automobiles in the South American market. Due to low production cost, cheap labor, and a rise in offshore foreign investments, these countries have thrived on being on the top. The positive economic growth in these specific regions has let customers adopt budget friendly ADAS technologies.
For example, Argentina, the largest to export ADAS technology from Brazil. There is a need for potential expansion towards ADAS equipped vehicles. While, the automotive industry in economies such as Brazil and Mexico have generated significant demand for vehicles equipped with technologies like Tire Pressure Monitoring System, Parking Assistance Systems, Automatic Braking, and Adaptive cruise control.
Although Autonomous Driving applications are still in their early days, they will eventually become the main feature of differentiating automotive brands. Also, they will become one of the most important revenue sources for major car manufacturers.
The Latin America Advanced Driver Assistance Systems (ADAS) Market is fragmented with international and regional players such as Autoliv AB, Bosch Group, Continental AG, Delphi Automotive, Harman International, Hella KGaA Hueck & Co, and Hyundai Mobi. Although to have the edge over its competitors, the major ADAS companies are making joint-ventures, partnerships with car manufacturing companies to launch newer products.
For instance, Mexico has become one of the most promising ADAS markets for the automotive industry. For example, Kia, Audi, and Ford have planned the construction of new car manufacturing plants with a total investment of over USD 4 billion. This will further push the growth for the ADAS market is the Latin America region.