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China's aftermarket boosts the automotive display market in 2015
Automotive display market is changing and China, as one of the largest car market in the world, is driving these changes.
According to the latest IHS Automotive Display Market Tracker the total active matrix-based automotive display market fell 5% Q/Q in Q2'15, shipping 28.4 million units. The shipment decrease was mainly due to a slowdown in China related to economic uncertainty. The automotive monitor market-center stack display, rear seat entertainment, and other monitors-was down 7% Q/Q to 19 million units. However, the demand for instrument cluster displays was stable at 9 million units. Nonetheless, the total market growth is still high at 35% Y/Y, mainly due to the demand increase for China's aftermarket. We believe shipments recover in the third quarter, up 2% Q/Q.
IHS expects the total automotive display market in 2015 will grow 34% Y/Y to around 118 million units:with the following spilt :
- Automotive monitor: 79.4 million
- Head-up display (HUD): 1.2 million
- Instrument cluster display: 37.5 million
The growth is mainly driven by the demand for aftermarket automotive displays in China. As we know in the automotive display market, the primary market is based on the installed base where the automotive companies install the display and entertainment system in the car when the car is built. The aftermarket is that the consumers buy a standalone display or entertainment devices and then install that into their car purchased.
Compared to other regions, consumers in China are showing a much stronger interest in having infotainment systems, similar to China's very high smartphone adoption rate. However, consumers are also highly price sensitive and prefer to buy in the aftermarket, as the price of aftermarket automotive display panels is half to one third of installed equipment. The panel specifications are much lower, too. The special automotive selling machanism in China, especially in big cities like Beijing, Shenzhen, Shanghai, also encourages the end users to buy the infotainment after they purchase the car. They have to pay very high license fee when they bought a car and also the car dealers are charging very high premium for the installed system. The major panel module suppliers for the China aftermarket are Innolux, HannStar, CPT, Tianma, and Truly. Some manufacturers are also buying cells from BOE and making the display module with even lower costs. These display manufacturers are not like the traditional higher end makers like Sharp or Japan Display, but they are gaining the benefits of the China aftermarket growth.
We expect the total automotive display market will keep showing healthy demand increases during the forecast period. The share of light vehicles with center stack displays is expected to keep increasing, as auto makers have perceived in-vehicle infotainment being an important selling point to consumers. Also, consumers are showing interest in having user experiences inside the car similar to their mobile phone. Many new car models are launching with built-in Apple Carplay and Android Auto.
The US rearview camera mandate will also drive demand for display audio and rearview mirror display. The evolving advanced driver assistance system (ADAS) market is also increasing demand for digital instrument cluster. A full digital instrument cluster, especially 12.3", has become mainstream for prem ium models. As a result, we expect the total automotive monitor display market will continue double-digit growth until 2017 and then 5-10% growth until 2020.
David Hsieh is a display senior analyst for IHS
Posted on 28 October 2015
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