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Consumer, Automotive Electronics Drop
February 2, 2009 |Estimated reading time: 1 minute
LOS ALTOS, CA Henderson Ventures reports that the consumer electronics sector, excluding cell phones and computers, will face declines in 2009. Game consoles will be a bright spot, however. Automotive electronics will continue to fall globally in 2009, moving into negative territory. Slumping vehicle demand and price pressures are to blame, Henderson asserts.
Given the absence of compelling product offerings, along with the dismal economic environment and an inventory hangover from the 2008 Christmas selling season, it should not be too surprising that world production of consumer electronic products, excluding cell phones and computers, will fall this year. Output is predicted to drop by 6.4% versus an anemic 1.7% increase in 2008.
For reference, world output fell by only 4% in 2001, the last time that the industry suffered a downturn. But game consoles are likely to achieve a gain of 10% this year as games represent a form of affordable family entertainment.
2008 was not a good year for automotive electronics manufacturers. Global vehicle production fell by 3.0%. US output plummeted by 19.8% and West European production was down by 10.3%. Even though electronic content is steadily rising in cars and trucks, cost containment is a major issue at vehicle manufacturers.
Consequently, automotive electronics output managed only a thin 0.4% increase in 2008, versus a 10.1% surge in 2007. This year, the combination of slumping vehicle demand and even more intense price pressure will drive down automotive electronics production by 5.7%. But an accelerating industry recovery will take growth rates back up to 8.7% in 2010 and 12.3% in 2011, as vehicle obsolescence and pent-up demand lift industry prospects.
The Henderson Forecast Summary is provided by Henderson Ventures, publishers of the Henderson Electronic Market Forecast newsletter and PWB industry forecasts. For more information, visit www.hendersonventures.com.