The decline in the automotive electronics market has bottomed out in the first quarter, paving the way for its return to year-on-year growth in 2010.
After a dismal 2008 and the first quarter of this year, auto sales have been better than expected in some regions recently, largely due to government incentives. Although 2009 will still be sluggish, car sales in the second half of this year will be significantly improved compared to the first half. This will lead to an increase in annual sales of automotive electronics in 2010. The automotive electronics field includes car audio bodies, navigation, advanced driver assistance systems (ADAS), embedded telematics and Bluetooth.
The major U.S. auto market, which has dragged down the global auto market, continues to struggle. Sales of passenger cars and light trucks in the United States fell by 18% in 2008 and by 35% in the first half of 2009. Overall U.S. automobile sales are expected to decrease by 17% in 2009, a relatively mild decline.
A major factor in improving conditions in the U.S. auto market is the removal of uncertainty surrounding the bankruptcies of General Motors and Chrysler.
General Motors and Chrysler have emerged quickly from bankruptcy protection, removing a dark cloud facing the U.S. auto industry.
In addition, the U.S. government is currently launching a cash-for-used-car program to encourage consumers to trade in their old cars for new ones. The plan is expected to stimulate US car sales in 2009 to increase by 250,000 units. If the program's $1 billion budget is increased, overall sales could be even higher.
Cash-for-used-car schemes are also attracting more consumers to car dealerships. Increased popularity may even boost car sales more than the incentives themselves.
The final reason for the improved situation is purely statistical: due to the decline in car sales at the end of 2008, comparisons with the same period in 2008 will become more favorable in the second half of the year.
