Tata’s $2,500 Nano will play a key part in expanding the Indian automotive electronics market, stimulating demand for automotive sensors and semiconductors, according to Strategy Analytics. That’s despite the fact that low-cost vehicles typically have very little electric content now.

Tata estimates initial production volume of 250,000 units per year for the Nano. Strategy Analytics forecasts that Indian-produced basic vehicles will use $1.5 billion of automotive electronics systems in 2012, more than doubling the 2007 demand amount of $730 million--a compound average annual growth rate of 16%.

“Initial opportunities for automotive electronics vendors lay in the area of engine control systems,” noted Ian Riches, Strategy Analytics’ Global Automotive Practice service director. “Strategy Analytics expects excellent growth in comfort-convenience features such as air conditioning and electric windows, while the Indian economy continues to grow.”

“Electronic content in Indian vehicles is expected to rise significantly,” added Chris Webber, vice president of Strategy Analytics’ Global Automotive Practice. “In 2004, Indian-produced vehicles contained, on average, less than $1,000 of electronics system content. This is expected to reach almost $1,500 per car by 2012.”