What had initially started as a limited recall of cars in early 2013 by the key automotive manufacturers across the globe eventually became a global phenomenon until 2019. During early 2013, about 3.6 million vehicles were recalled due to the defective airbags manufactured by the Japanese Conglomerate named Takata Corporation, now Key Saftey Systems (China), led Takata to bankruptcy and eventually acquisition by a Chinese company that develops and manufactures automotive safety systems.
As of late 2016, numerous automotive players such as Acura, Audi, BMW, Cadillac, Chevrolet, Chrysler, Daimler Trucks North America, Daimler Vans USA LLC, Dodge/Ram, Ferrari, Fisker, Ford, GMC, Honda, Infiniti, Jaguar, Jeep, Land Rover, Lexus, Lincoln, Mazda, McLaren, Mercedes-Benz, Mercury, Mitsubishi, Nissan, Pontiac, Saab, Saturn, Scion, Subaru, Tesla, Toyota, and Volkswagen were affected by the recall. In 2019 alone, about 10 million inflators are being recalled in the US, with as many as 70 million to be recalled by the time the whole clutter ends late next year. Until recently, Subaru is recalling 826,144 vehicles, including various Forester, Legacy and Outback models from 2010 to 2014 whereas, Mercedes is recalling 288,779 vehicles from model years 2010 to 2017 followed by BMW who is recalling 266,044 vehicles from 2000 to 2004 model years and the 2007 to 2015 model years.
According to the Point Of View of Siddharth Rane – Assistant Manager: Semiconductor and Electronics, at MarketsandMarkets™, thorough testing of the airbags under multiple environmental conditions have prevented such financial losses to the companies. For instance, the airbags, if were subjected to environmental conditions with high humidity or conditions with extreme hot or cold temperature fluctuations would have allowed the automobile manufacturers to identify the flaw and rectify it within the stipulated time frame. Notably, stringent government regulations and standards to ensure compliance with safety and quality norms by automotive manufacturers and dealers also affect stakeholders significantly. Certification of vehicles during manufacturing stages and scheduled inspection during operation stages are governed by these regulations.
Automotive TIC market:
The automotive TIC market comprises market players who specifically provide TIC services to manufacturers and distributors of automotive products that help improve productivity, meet global standards, and enhance product quality. TIC services assure end users and consumers about the compliance of national and international industry regulatory standards (meant to maintain quality, safeguard public health, and ensure safety) by manufacturers. The growth of this market is driven by the trend of outsourcing TIC services, formulation of new regulations and standards, and others. Growth opportunities for small and medium-sized businesses in the TIC ecosystem and growth of the electric vehicles (EVs) and hybrid vehicles market are some of the major growth opportunities for the automotive TIC market.
The automotive TIC market is expected to be valued at USD 27.66 billion by 2023, growing at a CAGR of 7.23% between 2018 and 2023.
Impact on Emerging Automotive Market:
The automotive market is growing as the production volumes have increased from 81.8 million units in 2013 to 101.7 million units in 2017 according to OICA. Home to almost half of the world’s population, China, India, and other Asian countries are the key markets spearheading this growth. As a result, major automotive manufacturers, both public and private, have started to outsource the TIC services. With strict regulatory standards, such as environmental and safety regulations/requirements, companies are struggling to meet specified standards due to the unavailability of relevant expertise, thus preferring to outsource TIC services to third-party service providers. The aim of outsourcing to companies specializing in TIC services is to minimize errors and reduce possibilities of malfunction.
Often manufacturers are forced to recall vehicles on the discovery of component defects that could either be potentially lethal for users or put manufacturers/sellers at risk of facing legal action. A major reason for vehicle recalls is the increased use of electronic components in modern vehicles, frequent product launches, customer demand for new models with complex designs, supply chain issues, delayed regulatory notification, and poor monitoring and handling of safety issues.
Airbags, advanced driver assistance systems, electronic fuel injection systems, and infotainment systems are some of the areas where automotive electronic systems are used to increase the overall efficiency of the entire system. For instance, Complex electronic modules used in certain systems are sometimes fit into very confined spaces, risking the electromagnetic interference (EMI) of these systems through radiated and conducted emissions. EMC testing is carried out (controlling harmful electromagnetic radiation) to ensure the safety and reliability of a system. Therefore, with the growing trend of electronic systems adoption in the automotive industry has led to the penetration of new and improved interconnected technologies that extensively require testing, certification, and inspection before being marketed.