BOSTON-Government mandates will cause demand for tire pressure monitoring systems to rise tenfold by 2009, according to a new report.
From 4.4 million units in 2004, TPMS production will jump to 45 million in 2009, a market worth $1.62 billion, according to consulting firm Strategy Analytics Inc. in its "TPMS Market Analysis 2005," issued in June.
Semiconductor demand in the TPMS sector will grow at the same rate, from $41 million in 2004 to $394 million in 2009, said Simon Schofield, a senior analyst at Strategy Analytics and author of the report.
The Transportation Recall Enhancement, Accountability and Documentation Act, passed by Congress in October 2000, contained a mandate for a rule from the National Highway Traffic Administration requiring systems on cars that notified motorists of a dangerous loss of tire air pressure. The law requires this on all new cars by September 2007.
NHTSA issued a TPMS rule in 2002, but reconsidered it the following year on a court order. While the second final rule is facing another court challenge by consumer and tire industry groups and some tire makers, it is expected that all major auto makers will provide tire pressure monitoring systems on all new vehicles before the end of the decade.
The U.S. mandate will in turn drive market penetration of the systems in Europe and Japan, increasing consumer awareness of the devices and allowing volume pricing worldwide, according to Schofield.
At least in the U.S., devices that monitor tire pressures directly will be the technology of choice, the report said. The cost advantage that the less accurate indirect systems enjoy will erode as the price of direct systems falls, it said.
Outside of the U.S., it will be more a matter of manufacturer choice, according to Schofield.
"Typically, direct systems are being deployed for the high-risk and high-value vehicle types, but usually as a consumer option," he wrote. "Indirect systems are expected to be deployed across the range of vehicle segments with ABS (anti-lock brake systems) for vehicles sold outside of North America."
Once TPMSs are established, the next goal for the TPMS industry will be to develop battery-less systems, according to Schofield.