Frost: Legislation Creates Dramatic Uptake for Pedestrian Safety Systems

March 27, 2006

Despite the European New Car Assessment Programme (NCAP) that introduced pedestrian protection tests, vehicles in Europe remained excessively dangerous for pedestrians, according to analysts at Frost & Sullivan. With 4,458 pedestrian deaths - 15% of the total road fatalities in Europe during 2002 - vehicle manufacturers became increasingly aware of the need for enhanced pedestrian safety systems.

At the same time, the rising fatalities prompted the establishment of stringent European pedestrian protection legislation. Such trends have fueled greater demand for pedestrian safety systems with high growth expected for the developing active and passive pedestrian safety systems segments.

European pedestrian protection legislation has two phases - the first phase went into effect October 2005; the second phase comes in 2010. This legislation requires these pedestrian protection systems be installed as standard across all vehicles, thus driving up installation rates.

"The market potential for vehicle manufacturers and suppliers is immense in the pedestrian safety systems market as almost all safety systems, whether active or passive, are still in their respective development phases," said Frost & Sullivan transportation analyst Vinay Joshi.

"Manufacturers are working on either passive pedestrian safety solutions such as energy absorption front end, installing deployment solutions (airbags, deploying bonnets or bumpers) or active pedestrian safety solutions such as driver warning systems and automatic systems."

While passive pedestrian safety systems are initially expected to experience significant growth, the development of reliable pedestrian sensing technologies will ensure substantial growth of active pedestrian safety systems to complement the more stringent, second phase of pedestrian protection legislation after 2010.

Within the passive pedestrian safety systems segment, structural solutions will have a market penetration of 72.1% in 2006, according to analysts, rising to 100% in 2011-2012. Reversible and non-reversible deployment systems are poised to rise from their almost non-existent penetration rates today to reach 21% and 26% respectively by 2015. Reversible deployment systems are expected to have a high level of penetration in the premium vehicles segment, whereas non-reversible deployment solutions are expected to be common in sports utility vehicles (SUVs) and compact segment vehicles.

In the active pedestrian safety systems segment, analysts said half the vehicles in the premium segment will likely have some form of driver warning and information system by 2010, whereas 25% of the cars are expected to have a driver warning pedestrian protection system by 2015. Less than 2% are expected to have automatic systems.

According to Frost & Sullivan, a key challenge in this scenario remains high development costs. Due to the use of sophisticated sensors in various active and passive pedestrian safety systems, the cost of development and validation is high. This has substantially increased the overall costs of developing a pedestrian safety system.

"To overcome high development costs, vehicle manufacturers can outsource the research, development and testing of these systems to Tier 1 supplier whose expertise in this field is growing, who can then be offered suitable supplier contracts," said Joshi.

At the same time, an end-user study conducted recently in five European countries revealed that approximately 30% of respondents were willing to pay for pedestrian safety systems. Analysts said vehicle manufacturers have an opportunity to increase the cost of vehicles and implement sophisticated pedestrian protection systems, albeit, after effectively proving the reliability and efficiency of these systems.

Source: Frost & Sullivan.