The global automotive active seat headrests market is characterized by the presence of many regional and global players. The market is highly competitive with all the players competing to gain market share. Intense competition, rapid advances in technology, frequent changes in government policies, and safety regulations are key factors that confront market growth and enhance the active seat headrests demand and sales. The active seat headrests manufacturers compete based on cost, product quality, and reliability. It is crucial for the manufacturers to provide cost-effective and high-quality products, in order to survive and succeed in an intensely competitive market environment.
The growth of the market players depends on the economic conditions, government support, and industry development. Thus, they have been observed focusing on improving their products and expanding their regional presence. Grammer AG, Lear Corporation, Toyota Boshoku Corporation, TS TECH Co LTD, and Adient plc being the leading players, held nearly 44.2% of the market share in 2018.
Deprag Schulz Gmbh U. Co., Yanfeng Automotive Interior Systems Co., Ltd., Magna International Inc., JR Manufacturing, Inc., and Daimay are some of the other players operating in the global automotive active seat headrests market. Among all the players, the leading ones, as mentioned above, dominate the market due to their enhanced product portfolios, vast industry experience, and geographic reach. These players may strengthen their presence in the global automotive sector, through new product development and further increase their research and development investments during the forecast period. Players with access to better technologies can develop unique and innovative products and services, which could render the competitors’ products, obsolete. The competitive environment in the market is likely to intensify further due to an increase in the number of expansion and partnerships.
Michael Porter’s Five Forces Model is a framework for the global automotive active seat headrests market, which is influenced by five forces. The strategic business managers, trying to create an edge over competitive firms in the global automotive active seat headrests market, can utilize this model to comprehend the industry connection, in which the firm operates. The components of each of the forces and the degree of impact of each force in the context of the global automotive active seat headrests market have been broken down and analyzed.
Threat of New Entrants
A moderate capital requirement and the presence of competitors in the automotive active seat headrests manufacturing products results in the moderate threat of new entrants in the global automotive active seat headrests market. The product is in the growth stage and demands research and development efforts into product technologies. The high impact of brand identity of the existing companies such as Lear Corporation, Adient Plc, Grammar AG, Toyota Boshoku Corporation, Toyota Boshoku Corporation, and TS TECH Co LTD in the market, is expected to lead to the increased entry barrier for new manufacturers. Active seat headrests are mainly equipped in luxury passenger and commercial vehicles due to the high-end hardware and technology used in such vehicles. Active seat headrests are play an important role in enhancing passenger and driver safety, which is regulated by industry mandates. However, the profit margins will be the challenging factor for the new players, as most of the prestigious suppliers and buyers are already in long-term partnerships owing to the demand for the high-quality product technology due to the application in the luxury vehicles. However, the seat manufacturing companies might enter the market with their existing technological and manufacturing capabilities. Thus, the threat of new entrant is moderate in the global automotive active seat headrests market.
Bargaining Power of Suppliers
The primary suppliers in the automotive active seat headrests market are the raw material/component suppliers, such as motion sensors, forming materials, pressure plate, head rest structure (rod/stem), plastic, and trims. The automotive active seat headrests manufacturing companies tend to enter into long-term agreements in order to ensure uninterrupted supply of raw materials to the manufacturers of product. However, the moderate concentration of suppliers, and low raw material differentiation, can limit the bargaining power of suppliers. Thus, the bargaining power of suppliers is moderate in the global automotive active seat headrests market.
Bargaining Power of Buyers
The concentration of buyers in the automotive active seat headrests market is low. The end users of automotive active seat headrests are inclined toward buying high end systems to ensure minimized performance risks at the time of rear-end collision. The main buyers in the market are luxury vehicle manufacturers, such as BMW AG, Mercedes-Benz, and Audi AG, who choose to procure high-end systems and prioritize technology innovation, comfort, and safety performance. This leads to the increased prices of the active seat headrest. The impact of brand identity is high and the price sensitivity in the market is low. The manufacturers tend to have long term contracts with the automotive OEMs for the uninterrupted supply of active seat headrests. Such factors are expected to result in the high bargaining power of buyers in the global automotive active seat headrests market.
Threat of Substitutes
There are no direct substitutes in the global automotive active seat headrests market. However, rear vehicle monitoring systems are widely used to avoid rear end collision. However, technological innovation with the availability of types of automotive active seat headrests will further reduce the threat of substitutes. Hence, the threat of substitutes is low in the automotive active seat headrests market,
Rivalry
There is a moderate presence of existing automotive active seat headrests manufacturers, with companies such as Lear Corporation, Adient Plc, Grammar AG, Toyota Boshoku Corporation, and TS TECH Co LTD, which are the major market share holders in the global automotive active seat headrests market. The wide sales and distribution network in the market has increased the competitive rivalry in the market. Moreover, there is high industry growth owing to the rising purchasing power and awareness regarding safety features. The leading automotive OEMs are spending heavily on advertisements to increase the awareness among consumers regarding the product features. There is moderate product differentiation, in terms of product quality and specifications, as automotive active seat headrests are used primarily in luxury vehicles. Thus, the moderate number of companies, high industry growth, moderate product variation, and high advertising expense are expected to result in high intensity of rivalry in the global automotive active seat headrests market.
