Industry News
Twenty per cent annual growth to 2010 forecast for automotive RFID market - VDC report
17th March 2006
According to Venture Development Corporation's new automotive market report in its annual RFID Business Planning Service, the global market for radio frequency identification (RFID) systems in the automotive sector reached an estimated $312 million in 2005. Hardware accounted for nearly 56% of the market (excluding transponder revenues for automobile immobilization and keyless entry). VDC anticipates a compounded annual growth rate (CAGR) of 20% through 2010, with revenue shipments projected to exceed $765 million within five years.
The automotive industry has primarily used RFID for vehicle immobilisation. However, as economies of scale are attained and improvements in performances are achieved, deployments to support supply chain, shop floor, and asset management applications are expected to increase significantly. Automotive companies expect to reap the following benefits from using RFID within supply chain and shop floor applications:
- Improved visibility of products, assets, and materials within the enterprise;
- Automated tracking and inventory management of goods and materials;
- Increased operational efficiency and decreased resource expenses;
- Enhanced security and shrinkage reduction;
- Improved cradle-to-grave tracking capability;
- Removal of limited human interaction generally required with bar code systems;
- Improved supply chain collaboration (i.e., reduced warranty cost, shorter response time to open issues); and
- Compliance with current and future industry and customer mandates (NHTSA, AIAG, ODETTE, JAMA/JAPIA, Wal-Mart, etc).
Users in the automotive market are described as highly experienced with RFID, and are expected to rapidly integrate new solutions as they become technologically and financially feasible. Small in number and requiring a diversity of suppliers to support massive inventories of unique parts, vehicle assembly and parts/components firms wield significant clout in driving the entire supply chain to implement new technologies.
Venture Development Corporation is an independent technology market research and consulting firm based in the US. (www.vdc-corp.com)
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