RUCKERSVILLE, Virginia, USA -- Automakers are accelerating the rollout of technology designed to avoid crashes, but insurance companies are waving a caution flag at consumers eyeing discounts for buying collision-avoiding brakes or automated cruise control.
The global market for advanced driver assistance systems, known in the industry as ADAS, is expected to reach more than $67 billion by 2025, growing more than 10 percent each year. A group of 20 carmakers has pledged to outfit almost every new vehicle with forward collision warning and city-speed automatic emergency braking by 2020.
Government mandates to install technology such as collision avoiding automatic brake systems are driving the market, as is the promise of profits for these higher-margin vehicles.
"Anybody that has been in a car with advanced safety solutions is not going to go back," Kevin Clark, CEO of auto technology supplier Aptiv told Reuters. The cost for advanced safety systems -- automatic braking, lane keeping and automated cruise control -- can be relatively low to the automaker, between $500 to $1,000 per vehicle, Clark said.
"The (manufacturer) can price for it and consumers will pay for it," he said.
Aptiv expects to book more than $4 billion in new ADAS business this year. "We have gone from five customers just a few years ago to I think we’ll have north of 20 in a couple of years from now," Clark said.