SINGAPORE - More and more new cars are expected to be fitted with Xenon headlights as standard, according to Philips, which is seeing demand from car makers for this particular lighting technology grow by up to 40 per cent annually.
The electronics giant is a world leader in health care, lifestyle and lighting. It invented Xenon technology in 1985 and quickly built up a strong position as an OEM (original equipment manufacturer) supplier to Japanese car manufacturers.
Today, one of Philips's biggest markets for the Xenon light technology is China.
"Our business in this field of lighting is growing by 30 to 40 per cent, led by key emerging markets like China," says Andre Kabel, Philips director of sales and marketing for Asia-Pacific.
This contrasts with Europe, which is a mature market with slower growth.
He adds: "The total Chinese market grows over 20 per cent per year. In earlier years we saw faster growth, but now China's car production is already more than France and Germany combined, and soon even more than the United States."
Philips also used to see very strong growth rates for Xenon in Japan, says Mr Kabel, "over 20 per cent a year".
"With this, we reached strong penetration in the high-end segment and over one-third of the total car production," he explains. "Japan is a fast adopter and global player, but now the Chinese market is the fastest-growing Xenon lamp market."
Already, one out of every three cars in China is equipped with at least two Philips lighting products.
"Philips sold more than one million Xenon lights in China over the last two years," says Mr Kabel.
But as an indication of how much more China has to grow before it reaches Japan's appetite for Xenon lights, the former has a forecast market size for Xenon of 285 million yuan (S$61.6 million) in 2008 - versus the latter's 11.8 billion yen (S$173 million) for the same period.
Xenon lights are the brilliant, bluish-white lights found mainly on high-end luxury and sports cars. Such high intensity discharge (HID) lights are different from standard halogen headlamps because they provide twice the light of the conventional lamps with their yellowish light.
With 200 per cent more light, road hazards can be identified earlier, even in bad weather.
Philips says at highway speeds, HID lights give the driver up to a full second more time to safely react to road hazards. Recent studies in Germany have shown that the usage of Xenon lamps in headlighting can reduce fatal accidents by up to 18 per cent.
There is a downside though - cost.
According to Mr Kabel, a standard halogen bulb may cost US$1 but some Xenon bulbs can go up to as much as US$30 because "some products also have electronics".
Nevertheless, he says Philips is confident about Xenon's future despite the higher cost, mainly because of its superiority.
Philips is a multinational corporation based in the Netherlands. It is No. 1 in automotive lighting in Europe, Asia-Pacific and Latin America. In North America, it is among the top three.
"We are also the market leader in Japan, Korea and China. Philips's worldwide market share in automotive lighting has risen from around 19 per cent in 1995 to 32 per cent in 2007," says Mr Kabel.
This article was first published in The Business Times on Oct 22, 2008.
