The "ADAS and Autonomous Driving Tier 1 Suppliers Research Report, 2024 - Foreign Companies" report has been added to ResearchAndMarkets.com's offering.

Research on foreign ADAS Tier 1 suppliers: make all-round attempts to transform and localize supply chain and teams.

Foreign ADAS Tier 1 suppliers fall behind relatively in development of intelligent driving, with declining profitability from 2018 to 2023.

In the past few years, foreign ADAS Tier1s like Bosch, Continental, Valeo, ZF and Magna have faced unprecedented challenges. According to the data from 2018 to 2023, the compound annual growth rates (CAGR) of EBIT/operating margin of these five giants were -3. 9%, -14. 4%, -7%, -0. 3% and -6. 4%, respectively. These data not only reflect the impact of the global economic environment on traditional auto parts suppliers, but also reveal the intensified competition in vehicle electrification, connectivity, intelligence and sharing.

Reasons why foreign Tier1s lag behind in development of ADAS business.

Difficulty 1 in developing in China: There are many ADAS Tier1 players in white-hot competition.

As China's local companies soar in the field of ADAS, foreign Tier 1 suppliers are facing unprecedented pressure of competition. In the past, these foreign giants dominated the Chinese market with their leading technologies and rich experience. Yet as new technologies spring up and China's local companies rise rapidly, the market pattern is undergoing disruptive changes.

China's local intelligent driving Tier1s have been quickly accepted by the market by virtue of their deep understanding of the local market and great R&D strength. These companies are well-known for their quick response to market needs, cost-effective solutions, and excellent AI algorithm capabilities.

The emergence of these new players has not only broken the competitive edges of traditional Tier 1 suppliers, but also redefined the intelligent vehicle supply chain pattern. As electrification, intelligence and connectivity gather pace, the industry is experiencing a profound transformation. These changes bring structural increment opportunities to the market, while also making the competition among intelligent driving Tier1s in China fiercer.

Difficulty 2 in developing in China: There is a drastic involution in Chinese L2-L3 market.

In current stage, the competition in the new energy market is stiff. The successful implementation of urban NOA means that OEMs have the technical strength to realize all-scenario driving assistance, which will help them take a lead in the market competition. By rolling out urban NOA on a large scale, major mainstream OEMs have acquired massive and diverse real data and built a forward cycle between data and algorithm solution iterations, thereby creating a technical moat. In addition, as the young generation becomes increasingly important consumers in the automotive market, they have ever higher expectations of intelligence and convenience. As an intelligent function, urban NOA will gradually become one of the key factors to the young generation of consumers making decisions on purchasing a car.

In 2023, urban NOA began to show growth spurt. Seen from the new vehicles launched on market, the installation rates of L2 and higher-level ADAS functions rose sharply, of which L2. 5 and L2. 9 enjoyed a surge. In 2022 the installation rate of L2. 5 functions in newly launched passenger cars in China was 13. 25%, a figure climbing to 19. 86% from January to April 2024; the installation rate of L2. 9 functions jumped from 12. 4% in 2022 to 23. 4%.

Following Xpeng and Huawei taking the lead in launching urban NOA in Shanghai, Guangzhou and Shenzhen, various automakers have been making intensive efforts in terms of technology path, urban launch scale, implementation speed and cost. The support behind this is mainly from Chinese ADAS Tier1s, and foreign ADAS Tier1s are rarely seen.

Foreign ADAS Tier1s make all-round efforts to transform: from strategic transformation, to redeployment of ADAS/AD product matrix, and then to comprehensive breakthroughs in intelligent driving solutions.

Step up intelligent driving layout in the Chinese market and strive to achieve the development goal of 'in China, for China'.

In Aptiv's case, it increases its investment in China to deepen its presence in the local market, and plans to operate 70% of its overall business in the Chinese market by 2028. Currently, the company forges closer strategic partnerships with China's local companies by establishing and expanding R&D centers and building an automotive ecosystem in China, so as to make triple breakthroughs in intelligent driving technology innovation, penetration into the Chinese market, and localization of intelligent driving products.

Shift the strategic focus to mass production solutions with higher actual output and commercial value, and peel off high-risk low-return L4 business, to ensure steady business growth.

ZF exhibited a new L4 autonomous shuttle and its previous autonomous shuttle models at CES 2023. Despite being a promising market, autonomous shuttles develop slowly, delaying the expected return on investment. The current economic crisis and the transformation to e-mobility have increased cost pressures, forcing the industry to re-evaluate investment strategies. ZF has decided to reduce high-risk investments, optimize allocation of resources, and focus on projects with clear market demand and a shorter payback period, in a bid to ensure financial health and sustainable development.

Supply chain localization, team localization, cost-effective intelligent driving solutions + faster cross-domain integration

Foreign Tier1s speed up the launch of more cost-effective intelligent driving solutions for the Chinese market by way of supply chain localization, team localization, strategic cooperation, investment in innovative Chinese intelligent driving companies, and continuous technological innovation. In addition, one of ultimate goals in developing intelligent vehicles is to achieve cross-domain integration, that is, seamlessly integrate various vehicle functions to enable all-around intelligent experiences. The concept of cockpit-driving integration has now entered the substantive implementation stage of quite a few foreign Tier1s, and is evolving towards 'integrated chip' solutions.

A more comprehensive ADAS/AD product matrix allows foreign ADAS Tier1s to stay competitive.

In terms of product matrix, Bosch, Continental, ZF and Aptiv have the most comprehensive product matrix, and all the eight international Tier 1s have deployed front-view cameras and autonomous driving solutions. In 2023, Bosch abandoned development of LiDAR and put more resources in development of radars. 4D radar and front/rear radar have become the deployment focus of foreign Tier1s during 2023-2024.

Key Topics Covered:

Global Regulations on Taking Autonomous Driving to Road and Development Plans

• Global Regulations on Taking Autonomous Driving to Road
• UN Regulation on Automated Lane Keeping Systems (ALKS) - Main Test Items
• UN Regulation on Automated Lane Keeping Systems (ALKS) -System Safety and Fail-Safe Response
• UN Regulation on Automated Lane Keeping Systems (ALKS) - Human Machine Interface / Operator Information
• UN Regulation on Automated Lane Keeping Systems (ALKS) - Object Detection, Data Storage
• Summary of Autonomous Driving Development Plans of Some Countries/Regions
• EU & Europe's Regulations on Taking Autonomous Driving to Road
• German Act on Autonomous Driving
• EU & Europe's Development Plan for Autonomous Driving
• EU's Autonomous Driving Roadmap and 2040 Outlook
• US' Regulations on Taking Autonomous Driving to Road
• US' Development Plan for Autonomous Driving
• Japan's Regulations on Taking Autonomous Driving to Road
• Japan's Action Plan for Realizing Automated Driving 4.0
• Japan's Development Plan for Autonomous Driving
• Japan's 'RoAD to the L4 Project'
• South Korean's Regulations on Taking Autonomous Driving to Road
• South Korean's Development Plan for Autonomous Driving

Development Trends of Products and Solutions of International Tier1s

• Comparison of Financial Performance between Foreign Tier1s, 2018-2023
• Comparison of ADAS/AD Product Matrix
• Comparison of Front View Cameras
• Comparison of Surround View Systems
• Comparison of OMS
• Comparison of 4D Radars
• Comparison of CMS
• Comparison of Domain Control/Central Computing Platforms
• Comparison of Autonomous Driving/Driving-Parking Integration Solutions
• Difficulties for Foreign Tier1s Developing ADAS Business in China
• Advantage of International Tier1s: Background - L3 Gets Ready
• Advantage of International Tier1s: L3 Layout
• Advantage of International Tier1s: Engineering Solutions
• Strategy Trends of International ADAS Tier1s
• Product Trends: 4D Radar Starts Mass Adoption
• Product Trends: CMS Is Allowed to Be Installed in Vehicles in China, and Competition in the New Market Is Fierce
• Product Trends: Multiple Tier1s Have Launched Cross-Domain/Central Computing Platforms

Major Foreign Autonomous Driving Tier1s

• Aptiv
• Bosch
• Continental
• Denso
• Hyundai Mobis
• Magna
• Valeo
• ZF

For more information about this report visit https://www.researchandmarkets.com/r/dp10cz

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