KEY MARKET INSIGHTS
The global car audio market size was USD 8.56 billion in 2020. The market is projected to grow from USD 8.82 billion in 2021 to USD 13.52 billion in 2028 at a CAGR of 6.3% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with car audio witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 4.6% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The sole purpose of automotive speakers is to offer in-vehicle entertainment to occupants in passenger cars. The latest automotive speaker systems are embedded with advanced technological features that enhance the overall passenger in-car entertainment experience. The rising demand for aftermarket sound systems and components propels the growth of the automotive audio market. Key market players are augmenting their aftermarket distribution channels to support the growing demand and capture greater market share.
Changing consumer lifestyles and shifting inclination toward using onboard infotainment systems in ride-sharing services are expected to provide new opportunities for market growth. Consumers preferred using onboard infotainment systems in public transportation to listen to music while travelling, which increases demand for automobile speakers. Product penetration will be aided by the growing acceptability of technologically superior audio-visual systems.
Lockdowns And Restrictions Due To COVID-19 Might Hamper The Market Growth
The manufacturing sector was severely hampered due the COVID-19 pademic induced lockdown.The scenario caused supply chain disturbance, market uncertainty,business downturn, and concern among clientele.However, after the lockdown was lifted. the market recovered in most nations. and government activities resumed normalcy. Because the car audio sector is reliant on automobiles, the interruptions produced by the pandemic have had an indirect impact on the car audio sector. As per the Society of Indian Automobile Manufacturers, passenger vehicle sales fell 2.24 percent from April to March 2021. In addition. China. one of the primary suppliers. was the epicenter of coviD-19 from where it led to a widespread. China witnessed a demand of around 1.3 million passenger cars per month between January 2020 to June 2020. which substantially lower than 2019 by around 23%. The automobile audio market in these locations suffered as it is dependent solely on the region's car sales.
The emergence of the COVID-19 epidemic triggered a global economic slump. Strict precautions put in place to suppress the virus had a massive influence on the market economy. Several problems, including a labour and feedstock shortage, contributed to multiple difficulties in designing and developing new gadgets, resulting in a large supply and demand gap. Market leaders were focusing on servicing to the order backlog in order to maintain a continuous revenue stream in 2021.
LATEST TRENDS
Enhanced Adoption ofSmart Voice Assistant,loT,and ADAS to Set A Positive Trend For Market Growth
In recent years, loT (Internet of Things) has been used extensively by car audio companies to manage and maintain fleets. lot helps to collect and transfer data with the help of sensors and controllers. lnfotainment systems connect users to a basket of content available online or on the cloud. Hence, streaming it over Bluetooth has become the tool that marketing masterminds have leveraged to increase the device price. The automotive audio market is experiencing a dramatic change. with further developments in Advanced Driver-Assistance Systems (ADAS) and connected cars technology, with companies focusing on their product development to compete with their rivals efficiently.
Digitization means the use of data and digital technologies to generate revenue or transform business processes, whereby digital information lies at the core of the process. lt is a vast market as it is synchronized with other seismic changes such as autonomous driving. electrification. and shared mobility. For instance.in March 2021.Dolby linked its Atmos technology to the electric Lucid Air sedan through a 21-speaker deployment that creates an artificial space meant to mimic a recording studio at Capitol Records. Also.Mercedes-Benz partnered with a start-up Circulor for using blockchain to track emissions of climate-relevant gases and the amount of secondary material across the supply chain of battery cell manufacturers. Artificial intelligence (Al) and 5G have an essential role in the automotive industry, as cars' predictive capabilities are becoming more prevalent. Intelligent voice recognition control is the latest trend in the car stereo industry. it facilitates users to play songs. accept cars. operate the Ac, and others with voice commands alone while driving. Hence, intelligent voice assistants, loT, and ADAS are expected to set a positive trend for this market during the forecast period.
DRIVING FACTORS
Growing Demand For Premium Audio Systems Is Anticipated To Drive Market Growth. The rising traffic congestion, especially in metro cities, directly increases the number of hours spent in cars, increasing the use of audio systems in automobiles. According to the Texas A&M Transportation Institute, as of August 2019, the average number of hours spent in traffic
in America is arolind 54 extra hours in a vear die to fratfic delavs. Peonle nreter a premilm branded audo svstem in their vehicles for the demand for high-quality audio. This leads to a rapid rise in the need for automotive premium audio systems, fueling the market growth.
Innovations in Wireless Audio Technology Are Expected To Fuel Market Growth
Wireless technology has made successful inclusion across all the product segments of consumer electronics and the audio technology industry. Demand for a superior driving experience with advanced voice-controlled assistants such as Siri and Cortana while driving fuels the market for a voice-recognized car stereo system. For instance, in October 2021. Apple inc. said it is developing a wireless audio technology with smart capabilities including speedometer climate-control system, radio, and seats. Therefore, demand for advanced sound quality has become a deciding factor among audio consumers globally due to the shift toward wireless.
RESTRAINING FACTORS
Health and Safety Issues Concerning Prolonged Use Of Audio Devices Can Restrain Market Growth
Researchers shows that the high volume speakers has severe impacts on the hearing abilities such as partial or complete hearing loss in prolonged users. The users in age group 10 to 30 are key sufferers of such long-term impact. Moreover. continuous exposure to Wi-Fi/Bluetooth sienals furthers boosts the damaging effects by inducing sleep cycle disturbance in such users. Moreover, the car audio blocks the outside noise such as sounds of horns of approaching vehicles which my lead to fatal road accidents.
Technological Challenges in Wireless Hi-Fi Systems May Restrain Market Growth
Although the wireless technologies such as WiFi, Bluetooth offers superior convenience of listening the audio remotely, using such technologies efficiently in a moving vehicle creates a lot of quality issues. Providing high-quality and real time synchronization in wireless audio devices is technically challenging, mainly due to bandwidth constraints coding issues, bit errors while transferring the audio among others.
SEGMENTATION
By Component Type Analysis
Speaker Segment Dominates The Market Due To Its High Demand
The speaker segment is expected to exhibit the highest CAGR during the forecast period. The speaker plays a crucial role in car stereo systems. In 2020, the passenger vehicle segment accounted for 70% of the speaker industry. The market for car speakers is increasing due to technological breakthroughs and upgrades in passenger vehicle interiors, such as better safety features with ADAS. Increased use of high-quality entertainment systems smartphone-controlled via Wi-Fi and Bluetooth technologies will increase the car audio market revenue. For instance, the 12 speakers
segment is expected to hold the largest market share of about 32%, owing to their increasing demand. In comparison the 18 speakers segment is anticipated to witness the fastest growth rate of 10.3% due to growing technological advancements.
A head unit is the CPU of your car's sound system. It refers to various devices, including CD players, radio tuners, auxiliary inputs. and built-in components such as amplifiers and equalizers. The head unit interfaces the user for the vehicle's information and entertainment media components such as satellite radio, DVDs, USB MP3, dashcams, GPS navigation, Bluetooth, Wi-Fi, and sometimes vehicle systems status. Moreover, it controls audio functions, including volume, band, frequency, speaker balance, speaker fade, bass, treble, and equalization. With the emergence of dashcams, GPS navigation, head units with video screens are widely available, integrating voice control and gesture recognition. Hence, head unit segment is anticipated to grow substantially during the forecast period.
Amplifiers use electronics to convert a weak musical signal into a more robust electrical output for driving loudspeakers. They can also be used to power a whole speaker system and replace original amplifiers and add
subwoofers. Amplifiers allow speakers to be operated at larger volumes and with considerably improved sound quality, Advancement in technology is driving the market growth. For instance. at CES 2020. the Sony concept car came with a 360 reality audio, a Sennheiser/Continental speaker-less system, and an LG infotainment system with rollable OLED panels. Hence, the amplifier segment is expected to grow steadily during the forecast period.
By Technology Analysis
Voice Recognized Audio System Segment Is Expected To Hold The Largest Market Share
Based on technology, the market is segmented into voice-recognized audio systems and non-voice recognized audio systems.
The voice-recognized audio system segment is expected to exhibit the highest CAGR during the forecast period. The factor contributing to the segment's growth is increasing demand for a superior driving experience with advanced voice-controlled assistants. Car stereo system manufacturers see a voice-recognized audio system as the most productive feature to add to the car stereo system throughout the forecast period. Currently, the non-voice segment holds the significant share, and the voice recognized audio system would lead during the forecast period.
The non-voice recognized audio system is expected to project a negative CAGR during the forecast period. It is installed in the car to provide in-car entertainment for the vehicle occupants. since 1990s, modifications in the automotive audio system have included FM radio, 8-track tape players, record players, CD players, DVD players, Blu-ray players navigation systems. Bluetooth telephone integration, and smartphone controllers such as carpaly and Android Auto. However, with customers’ inclination toward superior driving experience, the non-voice recognized audio system is anticipated to witness negative growth.
REGIONAL INSIGHTS
In 2020. the Asia Pacific automotive audio market was worth USD 4.94 billion. it presently has the market's largest market share. China &lndia witness huge demand for such products mainly due to high population & sales of passenger cars. This expansion is attributable to increased urbanisation and rising disposable income, which has resulted in changing individual preferences. The automotive sector in India, South Korea, and China is expanding mostly due to increased vehicle manufacture. In 2019lndia manufactured 4.516.017 automobiles. with 3.623.335 of them being cars. In addition, China was the largest vehicle-producing country in 2019; it produced 25,720,665 vehicles of which 21,360,193 were cars. The inclusion of a competitive automotive sector, as well as an expanding range of car manufacturers, are the key reasons driving the region's car audio market growth.
Europe is anticipated to lead the worldwide industry as a result of consumers preferring improved car stereos versus factory-fitted audio systems. According to a BVRLA market research survey, the size of the car fleet in the United Kingdom increased by 1.5 percent in the first quarter of 2021, succeeding three consecutive quarters of recession. In Q1-2021, the car fleet increased by 0.4 percent to 1,371,128, with consumer growth slightly offset by declines in the business fleet. in comparison. the van fleet with 440.502 LCVs, increased by 5% in the previous quarter, reaching record levels in Q1.
North America is the market's third-largest region, but it is predicted to have the greatest CAGR throughout the projection period. Because major automobile stereo producers are located in the United States, it ranks at number 1 in this region. At the moment. the fleet market in the United States runs in a low-inflation and low-interest climate that fulfills the country's economic norms, necessitating significant OEM investment. In the country, non-voice recognized audio systems are more often used. Although it is less expensive. it is on the cusp of being supplanted by voice recognized audio systems.The region's market expansion is being fueled by increased globalization.
Latin America, the Middle East, and Africa make up the remainder of the world. The Middle East is expected to make a substantial contribution to global market growth.
