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Frost & Sullivan: Higher Demand From Automotive, Consumer Electronics Verticals Drive Sensor Manufacturing Contracts

BEIJING, March 25, 2013 /PRNewswire/ -- The Chinese sensor contract manufacturing and export market had taken a hit from the European debt crisis but managed to stay buoyant due to the strong domestic demand from the automotive, consumer electronics and process industries. The Government's initiatives and stimulus packages aimed at stoking local demand will further assist market growth.

New analysis from Frost & Sullivan ( http://www.sensors.frost.com), Chinese Sensor Contract Manufacturing and Exports Market, finds that the market earned revenues of $2.62 billion in 2012 and is expected to reach $4.92 billion by 2019 at a compound annual growth rate of 9.4 percent.

Automotive sensors, such as brake and tire pressure sensors, are crucial for vehicle safety. This criticality of sensors, along with the rising purchasing power of citizens, is boosting the uptake of automotive sensors in China.

"Meanwhile, high demand for mobile phones and computers has increased the sales and the manufacturing contracts of acceleration and vision sensors," said Frost & Sullivan Measurement & Instrumentation Research Analyst Leo Jia. "The requirement of different types of sensors in railway high-speed and infrastructure has multiplied manufacturing contract orders."

The export market, however, has not fared as well as the domestic market due to the rising value of China's currency. Owing to the thinning profit margins and fluctuating exchange rates, exporters need to win long-term purchase orders to insulate themselves against these changing market dynamics.

In 2012, there was a significant slowdown in demand from both local and foreign original equipment manufacturers (OEMs). Further, the anticipated downturn in the sensor contract manufacturing industry compelled participants to re-evaluate their business strategies. With the global economy still battling poor form, participants may experience a further dip in exports.

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