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August 01, 2005 02:00 AM

TPMS demand to soar

Miles Moore
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    Thanks to government mandates, demand for tire pressure monitoring systems (TPMS) will increase tenfold, creating a market worth more than $1.6 billion by 2009, according to a new report from global consulting firm Strategy Analytics Inc.

    >From 4.4 million units in 2004, TPMS production will skyrocket to 45 million in 2009, to create a market worth $1.62 billion, according to the ``TPMS Market Analysis 2005'' issued in June.

    Semiconductor demand in the TPMS sector will grow at the same rate, to $394 million in 2009 from $41 million worth in 2004, said Simon Schofield, a senior analyst at Strategy Analytics and author of the report.

    The Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act, passed by Congress in October 2000, contained a mandate for a rule from the National Highway Traffic Safety Administration (NHTSA) 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, only to be forced to reconsider it the following year after a federal appeals court agreed with Public Citizen and the Center for Auto Safety that the first rule was inadequate.

    While a second final rule, issued in late May, faces another court challenge from Public Citizen, the Tire Industry Association and several major tire makers, it seems likely 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 tire pressure monitors in Europe and Japan, increasing consumer awareness of the devices and allowing volume pricing worldwide, Mr. Schofield said.

    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, Mr. Schofield said.

    ``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 ex-pected to be deployed across the range of vehicle segments with ABS (antilock brake systems) for vehicles sold outside of North America.''

    Once the monitoring systems are established, the next goal for the TPMS industry will be to develop batteryless systems, according to Mr. Schofield.

    ``Elimination of the battery from each wheel of the direct TPMS system would reduce component costs, replacement costs and the environmental cost of disposing of large quantities of spent lithium batteries,'' he wrote.

    He did not estimate when a batteryless TPMS might be generally available.

    Besides the market predictions, the TPMS Market Analysis 2005 contains a number of tables and charts, as well as capsule descriptions of major TPMS makers. To order the 36-page report, contact www.strategyanalytics.com.

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