Industry Policies Driving Formation of Car Electronics Standards
Before the announcement of Automotive Industry Development Policy and the Eleventh Five-Year Plan, the penetration rate of automotive electronics was still low and no clear-cut automotive electronics development regulations were available at that time. Besides the regulations on occupant protection in collisions that require the installation of ABS in braking systems, there were only a few regulations regarding automotive electronics before 2005. With automotive electronics playing an increasingly important role in the development of the Chinese automotive industry, along with consumers' rising demand for low energy consumption, environmental friendliness, safety, and entertainment, the scope automotive electronics applications has widened. Regulations on automotive electronics have sprung up due to demand of related policies and market growth.
In order to improve driving safety and to protect passengers and pedestrians, vehicle safety systems have moved from passive to active design. As the design of active safety systems must take into consideration the integration of the system with the car, China in recent years has placed more emphasis on standards regarding the reliability and stability of electronic control and detection systems.
The widespread adoption of car audiovisual and navigation systems has stimulated formation of standards for navigation map management and audiovisual systems in the past two years. It is expected that China will expand the utilization of value-added map information services to include emerging services such as intelligent traffic, electronic logistics, and in-vehicle navigation, which in turn establish related policies.
China has been aggressively developing vehicles using new energy to achieve the goal of saving energy and protecting the environment. Although many core technologies of automotive electronics have been dominated by overseas companies, the development of vehicles using new energy is still at an early stage. Therefore, Chinese makers still have many opportunities to be involved in the development of new technologies and to overseas companies in this sector. Due to the lack of related regulations in this segment, the Chinese government has initially drawn up standards which are based on international standards. With the support of China's automobile market, the Chinese government will initially lay down regulations based on international standards, and then establish regulations aimed at introducing technologies from overseas companies and enhancing domestic R&D and production.
Good Command of Policies the Key to Market
The development of the Chinese automotive electronics market is closely related to relevant policies and regulations, particularly the mandatory car safety regulations that have led to increasing demand for airbags and ABS. China has also been introducing mandatory regulations that are already implemented in other countries so as to keep pace with international standards. For example, the US regulation that demands new cars be equipped with TPMS have stimulated the Chinese government to state that the regulation on the compulsory installation of TPMS will be announced in late 2008. The regulation is expected to boost growth for the Chinese TPMS market, and some makers have started related development. This reflects the fact that governmental polices usually lead the development of new products and growth of market demand in China.
Policies also influence consumers' vehicle purchase habits, which in turn force makers to adjust production strategies. For example, by using tax incentives to encourage consumers to purchase vehicles with low emissions, makers have to readjust their production plans to meet market demand. In this way, the government will be able to achieve the goal of saving energy and reducing emissions. As a result, a good command of China's policies and regulations is important for makers seeking to enter the Chinese automotive electronics market.
Aggressive Involvement in Standard Formation
In the development of a new product, specifications and standards are the main drivers behind the formation of product applications. With the establishment of various standards underway, China's automotive electronics technology is going through a critical period. Unified protocols specifications and application standards will enable rapid and large-scale production of automotive electronics products. Therefore, besides car makers that are aggressively involved in the formation of standards in China, automotive electronics makers are seeking every opportunity to become suppliers for car makers. Securing a place in the formation of standards will allow these makers to enter the market ahead of their competitors. Once the new standards are unveiled, the makers will be able to take the lead in providing new products and benefit from the new business opportunities.
Focus on Development of Low Energy Consumption Technology
In view of increasing energy consumption and environmental pollution, China has made technologies capable of reducing energy consumption and environmental pollution a key item in its national development tasks, so as to upgrade automotive electronics technologies. Currently, new energy technologies are still far removed from mass production. For example, the extremely high cost of fuel batteries has caused them unable to be mass produced, and the significantly small battery capacity has made long-distance traveling impossible. It will take some time for these technologies to be commercialized. Therefore, at this moment the Chinese government focuses on reducing energy consumption, such as improving fuel utilization efficiency and developing low-energy consumption engines. In terms of automotive electronics, the use of LED lights and installation of tire pressure detectors has been rising. Besides cost control and quality management, low energy consumption and environmental friendliness are also important issues for makers seeking to enter the Chinese car electronics market.