The airbag market is currently experiencing a period of robust demand.
A confluence of factors is driving this trend, such as advances in technology, a growing number of cars on the roads and the introduction of new and more stringent safety regulations.
The global airbag market is estimated to grow by 8%, from $17 billion in 2013 to $30 billion until 2020. In 2013, the Asia Pacific region was valued at $6 billion and represented the largest share of the worldwide market. It is anticipated to grow by 8.5% until 2020 and is expected to be the fastest growing automotive airbag market in the coming years.
Several developments indicate that growth opportunities in the global airbag market are abound.
More, cheaper airbags
Airbags are located in four different locations in a vehicle: front, side, knee, and curtain areas. Each segment is anticipated to grow at different rates. For instance, frontal airbag growth will be close to 5% between 2014 and 2018, while side airbags growth will exceed 9% between 2013 and 2018.
As a result of heavy investment, airbag technology has advanced and cheaper airbags are now available. Indeed, airbags will soon be offered not only in medium- and luxury-range vehicles, but lower-end models as well.
More cars on the roads
Vehicle production is currently at a record high. In 2014, an estimated 86 million light vehicles were sold worldwide, and in 2019, the figure is anticipated to reach 99 million, of which 58 million will be in China and developing countries.
As a result of the increasing number of vehicles constructed, the number of airbags produced will also grow in turn. Global airbag unit production reached 330 million in 2014 and will increase to 424 million by 2018.
More safety regulations
With the rise in the number of automobiles on the roads, traffic injuries are set to nearly double worldwide, from 1.3 million in 2014 to 2.4 million in 2030. More than 500,000 people die due to traffic accidents in China and India every year.
This has led regulators to introduce new rules. As of 2014, frontal airbags are required by law in Brazil, and airbags will also be mandatory in India starting in 2016. Also, developing countries are beginning to launch New Car Assessment Programs (NCAP, an initiative initially started in the US to rate cars based on their safety performance) for the first time or are catching up to programs in industrialized countries. C-NCAP, the Chinese car safety assessment program, anticipates meeting European safety standards in 2018, and India will launch its own program, the Bharat New Vehicle Safety Assessment Programme, in the same year.