The data of the number of deaths in road accidents each year is very disturbing; around 1.3 million (according to WHO) people perish each year due to road accidents. Compared to the deaths in the much-vaunted wars like the Iraq war which killed around 0.45 million people or the Syrian war which killed 0.5 million people, we are losing more people in road accidents than we lose during a war.
Of the total fatalities, around 90% are in fast developing lower & middle-income countries. In the developed countries the awareness with respect to safety is much higher and their vehicles, much safer thus. Along with fatalities, the world loses around half a trillion dollars because of the accidents, more than the GDP of many countries.
Several factors contribute to road safety issues, most notably: speed, traffic density, flow, congestion, demographics, lighting, road condition and weather conditions also affect road safety. Most of these factors are beyond our capacity to constantly monitor them, except the choice to use safety devices and among them, the airbag has the highest efficacy in reducing fatalities.
Airbags diminish the impact of collisions by preventing the passengers from striking against hard objects such as steering wheel, dashboard, front glass and other parts of an automobile. They are designed to complement conventional restraints, such as seat belts and seatbelt pre-tensioners.
An airbag system generally comprises an airbag module (airbag inflator and airbag), crash sensors, a diagnostic monitoring unit. In the event of a collision, the airbag inflates within a fraction of a second (0.4 seconds), before the passenger hits the hard surface. The inflation of the airbag happens on account of a device called "Inflator". There are three types of inflators used in modern cars; Pyrotechnic, stored gas and hybrid inflators.
Pyrotechnic Inflators use solid gas generants which fills the airbag with harmless Nitrogen gas. They are mostly used in frontal airbags, have the largest market share and are also the most expensive. They are an ideal lightweight option.
Stored gas inflator keeps the gas in a compressed state and releases it in the event of a collision; they have the fastest gas release. They are mainly used in side, knee, and curtain airbags.
Hybrid inflators are the second most dominant and are the mix of the first two inflator types. It has many advantages over Pyrotechnic Inflators such as greater performance tailoring, a lower exhaust gas temperature, reduced gaseous and airborne particulates along with a greater bag fill capability. They are mostly used in side, knee, and curtain airbags.
The Hybrid inflators have an impressive growth rate of above 6%, while Stored gas inflators are growing the fastest.
Stratview Research after an in-depth analysis of the market, prognosticates that the global airbag inflators market will grow at a modest CAGR of over 4% and reach a market size of over USD 5 Billion by 2023.
Europe was the global leader with a third of the market share, with the Asia-Pacific at its heels in the airbag market in 2017. Asia-Pacific led by China and India, is expected to dethrone the leader within couple of years. USA, Germany, China, Japan and Spain are the top countries (in decreasing order of market share) and together account for over half of the market.
The airbag inflator industry has the presence of a few firms only. Autoliv Inc., Daicel Corporation, ZF TRW Holdings Corp., Toyoda Gosei Co. Ltd., and Key Safety Systems together command over almost the majority of the market share. With respect to integration, except Daicel Corporation, all are forward integrated.
On account of increasing penetration, the demand for the front airbag is increasing rapidly in Asia-Pacific, while the demand for side airbags, knee airbags and curtain airbags is increasing across the globe.
The frontal airbags have the highest share, followed by side and curtain airbag inflators. Moreover the rise in penetration of frontal airbags is expected to rise in China and India from 85%, 50% → 95% & 80% respectively, by 2023, this impressive rise in penetration will lead the growth in near future.
Small cars dominate the airbag inflator market with 40% share, along with the highest growth of near 5%, followed by SUVs.
Asia-Pacific, poised to become the market leader, is also growing at a modest pace and will boost the demand for airbag inflators. India and China, the two gigantic markets also have the highest fatalities in the world, the need for safety cannot be more emphasized.
Increased awareness is also an important factor in boosting growth. The increased awareness is on three fronts; consumers are more aware today, so is the government along with the automakers. They all are taking steps to enhance safety, ex.- campaigns by the government to increase awareness among people, it has also done regulatory changes to that effect too, etc. The awareness will keep on increasing in future too, especially in low-middle income countries. Automakers are also doing their bid to make cars safer and more affordable too.
On the regulatory front, an aspiring China has implemented New Car Assessment Programmes (NCAPs) which is modelled on Euro NCAP and mandates the use of frontal airbags, resulting in the rise of the use of airbags. In India, all the new car models, launched after the date of October 2017, will be required to have compulsory airbags across all variants along with ABS (deadline 2019).
The airbags, made by Takata, were mostly installed between 2002 through 2015. Takata, one of the leading inflator manufacturers, produced faulty ones. It led to dozens of deaths and resulted in history’s biggest recall of over 100 million vehicles. This replacement creates a demand for fresh airbags.
The regulatory changes, along with major corporate debacles (ex. Takata) have given a shot in the arm to inorganic growth. The acquisition activities have been directed towards expansion of manufacturing capabilities, as the market is expected to gain momentum in future.
German auto supplier ZF Friedrichshafen AG fully acquired safety systems supplier TRW Automotive Holding Corp. in 2015 and the combined company became one of the top three automotive suppliers in the world.
Ningbo Joyson Electronic Corporation completed the acquisition of Key Safety Systems (KSS), in 2016. The acquisition boosts the position of Joyson to become a global leader in automotive supplier business.
KSS has completed the acquisition of Takata at a deal value of US$ 1.6 billion in April 2018. The acquisition gives Joyson Safety Systems (KSS’s parent company) with additional manufacturing capability to compete with auto safety industry leaders like Autoliv Inc and ZF TRW.
In 2016, Ningbo Joyson Electronic acquired KSS. The combined company was rebranded as Joyson Safety System. The acquisition was done to achieve capacity as well as capability expansion.
Both capacity and capability seem equally important in this expanding market.
Unsafe vehicles and road accidents bereave us of our near and dear ones and the accidents also have a pinching economic cost. In light of these facts, airbags have now moved from a thing of luxury to a necessity. The governments across the world have recognised their need and many have made it an integral part of the four-wheeler.
Keeping the economic growth, stringent regulations and increasing awareness, in perspective, the growth prospects of airbag inflators look roseate.
The rise in cases of counterfeit airbags is a cause of concern, though not a big one. Also, the big Chinese cities are putting a cap on vehicle registration which will affect vehicle sales and airbag inflator market.
Notwithstanding the challenges, the global market of airbag shall grow at a modest pace and the market is expected to continue expanding during the next five years and beyond.
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