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With the potential to save lives and mitigate serious injuries, the following decades witnessed an increase in the adoption of airbags along with substantial improvements in vehicular passive safety. Driven by stricter norms thanks to rating mechanisms like the European New Car Assessment Programme (NCAP) and a regulatory push, airbags have become mandatory in most developed markets and are witnessing increasing penetration in developing nations. Not only that, the number of airbags being equipped in a vehicle has also grown from the standard driver’s side or dual front airbags to as many as 10 airbags equipped in certain current vehicles.

According to statistics from the National Highway TraDc Safety Administration (NHTSA), by 2015, front airbags managed to save close to 45,000 lives in the United States alone, and the number is further expected to increase to around 2,500 lives every year. Analysis done by NHTSA in 2015 further suggests front airbags alone can reduce fatalities by 14%. As more and more vehicles come on the roads globally, the requirement to improve safety not only for vehicle occupants but also for pedestrians has become the need of the hour. Despite regulators’ efforts to enforce stricter deployment of passive safety features in vehicles, around 1.25 million people are killed each year in road crashes as of February 2018, according to World Health Organization road traffic injuries statistics, and up to 50 million suffer a variety of injuries.

That being said, in order to curb road-related incidents, safety mechanism manufacturers as well as OEMs have turned to technology to strengthen car safety, which involves investing in key active safety mechanisms. Although passive safety mechanisms such as airbags may fall behind in garnering equal interest from safety manufacturers for future safety investments, there have recently been innovations that present an opportunity for this traditional safety component to be part of the future safety brigade.

With vehicle safety now getting its due attention in modern-day cars, newer airbag placement positions and an increase in the number of airbags deployed are driving global demand for this traditional safety component. Although luxury vehicles have continued to be equipped with a variety of airbags and other high-tech safety mechanisms, it is the volume segments driving demand for airbag installation.

In order to attract prospective buyers, vehicle manufacturers are positioning safety mechanisms as one of the key vehicle features to boost sales. Thus, airbags are also benefiting from this strategy, especially in markets where vehicle safety is not one of the prime consumer choices when buying a new vehicle. When analyzed at a global scale, mass-market segments, including the C-, D-, and B-segments, seem to be driving volumes for airbag modules. Thus, it can be inferred that demand for airbag modules is directly dependent on global production of the C-, D-, and B-segments.

For instance, in 2017, C-segment light vehicle production held the highest production share globally, followed by the B- and D-segments, respectively.

According to IHS Markit data, global C-segment production crossed 32.2 million units in 2017 and is expected to surpass 36.8 million units annually by 2023, increasing at a CAGR of 2.24% in 2017–23. Global B-segment production stood at close to 20 million units in 2017 and is expected to cross 24.6 million units by 2023, growing at a CAGR of 3.6% in 2017–23.

Despite being a higher segment compared with the B- and C-segments, D-segment light vehicle production is growing at an impressive rate. According to IHS Markit, D-segment production reached 16.6 million units in 2017, and we can expect it to reach the 19-million unit mark by 2023, increasing at a CAGR of 2.27% in 2017–23. Thus, these high-volume segments present an opportunity for vehicle manufacturers and safety suppliers to increase airbag penetration to boost volume.

Demand for airbag modules is following an upward trajectory globally. Driven by increasing vehicle safety mechanism adoption in both developed and developing markets, airbag modules are witnessing healthy growth.

According to IHS Markit, in 2017 alone, global demand for airbag modules reached 422.5 million units, and it should scale up gradually in the long term. By 2023, we can expect global demand for airbag modules to surpass 490 million units, growing at a CAGR of 2.5% during 2017–23.

This demand can be credited to the increasing adoption of airbags in the C-segment, which is the highest-volume light vehicle production segment globally. In 2017, global C-segment production generated demand for more than 157 million airbag module units, holding around 37% share of global airbag module demand by vehicle segment.

In the C-segment, midrange and entry-level vehicles combined to command close to 89% of segment demand.

The D-segment takes the second spot with airbag module installation volumes of around 99.1 million units, or 24% share of global airbag module demand in

2017. Within the D-segment, entry-level and midrange vehicles combined account for around 70% of segment demand. The mass-market B-segment generates the third-highest demand by segment for airbag modules globally. In 2017, the B-segment generated demand for around 67.6 million airbag modules, with a 16% global demand share.

Together, the C-, D-, and B-segments account for more than 76% of global airbag module demand by vehicle segment in 2017. We can expect all three segments to sustain their dominating share, generating the highest combined demand for airbag modules, even in the long term.

Airbag module global demand forecast