Overview

With roughly 40 million vehicles produced annually in Europe, Japan, and the United States, the vehicle industry comprises a major component of the world economy. Fundamentally, automobiles are a consumer product and easily one of the largest value purchases made by individuals to support their personal activities. Therefore, every feature offered on a vehicle must be responsive to the needs and desires of individuals, which includes their desire to receive a high value for their money and limit the total amount spent. Generally speaking, the consumer s perception of value, rather than actual cost, rules pricing, particularly for high-tech systems.

IV systems for convenience and safety are generally ranked highly by consumers in terms of function, yet their willingness to pay is much lower. An exception is luxury automobiles, partly because customers are less price-sensitive in general and because an IV system priced at, say, $2,000, is a much lower portion of the total cost when the vehicle itself sells for well over $50,000. However, after introduction in the luxury market, IV systems are gradually making their way into mid-range cars and costs are coming down.

Because IV systems, including active safety systems, are not mandated by any governments at this point, the litmus test for the viability of these systems resides with the customer. The level of investment by the vehicle industry in R&D to bring such systems to the market indicates that it expects strong consumer interest to develop over time. Some industry experts have estimated the worldwide...