Global Automotive Industry: Key Subsectors Market Study by PMR

  • Published On : Feb 02, 2015
Passenger cars and commercial use vehicles constitute the majority of the global automotive industry. With global vehicle sales showing a consistent rise year on year, the automotive and automobile industry has emerged as a key driver of economic growth in several countries. Automotive materials, parts and supplies, electronics, coating and painting technologies, and passenger safety systems are some of the key segments of the larger automotive industry. Each of these segments is comprised of several other specialized industries, each dedicated to advancing the state of the art of automotive research and manufacturing. 

The International Organization of Motor Vehicle Manufacturers (OICA) estimates that global motor vehicle production stood at 77.6 million in 2010 and soared to 87.3 million in 2013. Passenger vehicle sales outpaced those of commercial vehicles by a wide margin in 2013. 

Automotive Market History

According to the OICA, the automotive industry manufactured an estimated 66 million vehicles (passenger and commercial) in 2005, an output that translates into a gross revenue of over 2 trillion Euros. This market is known for being R&D-intensive, spending billions of dollars on research initiatives and taking automobile technology to a whole new level. In addition to this, the automotive industry creates direct employment that accounts for over 5% of the total number of jobs in the manufacturing industry.  

Industry Subsectors and Key Trends

Besides automobile manufacturers, the automotive market is composed of hundreds of OEMs manufacturing parts and components, suppliers and distributors of OEMs’ components and replacement parts, materials and fuel research/development organizations, fabricators, maintenance professionals and more. 

Here are the key subsectors in the automotive industry and their future outlook, as analyzed by Persistence Market Research:

  • Automotive HVAC Market: Heating, ventilation, air conditioning (HVAC) is integral to any automobile – be it a passenger or commercial vehicle. With an increasing demand for passenger vehicles, the need for HVAC vehicles designed for private-use cars will witness an uptick in the coming years, especially so in the Asia Pacific region.
  • Automotive Battery Market: North America represents the most lucrative market for automotive batteries. This market will likely exhibit moderate growth and automobile batteries based on the fuel cell technology will show much promise in the near future. Growth in this market will, however, be hindered by fluctuating raw material prices.
  • Automotive Cockpit Electronics Market: Consumers are increasingly in pursuit of a better, safer driving experience that is further enhanced by increasing dependence on smartphones and the internet – a trend that is heralding the growth of this market. Infotainment and Navigation systems, passenger controls, sensors and audio and connectivity segments comprise a key part of the global automotive cockpit electronics market.
  • Automotive Engine Oil Market: From conventional premium engine oils to fully synthetic engine oils for high-end vehicles to synthetic blended variants, the automotive engine oil market is currently exhibiting considerable innovation and growth. While North America is currently the largest market for automotive engine oils, aggressive growth is now being witnessed in the Asia Pacific region. 
  • Automotive Gear Oil Market: The demand for automotive gear oil has hitherto been the highest in North America. But the dynamics of this market are changing with the increasing dominance of the Asia-Pacific region in the global automotive sector. Gear oils are highly standardized and new product development in this sector is governed by a number of strict regulations – an aspect that industry players will have to contend with.
  • Automotive Paint Market: Conventional automobile and automotive parts painting techniques such as air dry varnish are fast making way for powerful new techniques such as HVLP guns and air gun painting. The focus on waste minimization, VOC-free paints, and UV coating will intensify, marking the presence of a myriad of opportunities.
  • Automotive Plastic Market: The use of high-quality plastics in automobiles does more than just improve esthetic appeal. The use durable, scratch-resistant plastics in controlling vibration, noise cancelation, and component integration. As plastics replace metals in many automotive applications, the use of reinforced composites, blended thermoplastic materials, and biodegradable plastics will see an upsurge in the global automotive industry in the near future.
  • Automotive Sensors Market: Intelligent driving technologies are made possible by the use of a variety of sensors, many of which will dominate the future of automobiles. With technologies such as TPMS, collision avoidance, integrated stability and occupant protection becoming mandatory in many countries, the automotive sensors market is poised for healthy growth. The most remunerative segments within the automotive sensors market are occupant detection, emission control, and battery control.
  • Automotive Airbag Market: Not just passenger or commercial vehicles, but also military vehicles and aerospace crafts rely heavily on the use of airbags for passenger safety in the event of a crash. As the number of people succumbing to road crashes increases year on year, the demand for safety measures such as airbags is on an uptick as well. Airbags for two-wheelers is a market to watch out for in this segment.
  • Lightweight Automotive Materials Market: A lighter vehicle is more fuel efficient. Fuel efficiency is a key concern among various administrations and in that backdrop, the lightweight automotive materials market assumes great importance. Market players are making new strides in all types of automotive materials such as metals, plastics, polymers and composites, and other novel materials. The United States and Japan hold much promise for the development and use of lightweight automotive materials, whereas Europe will likely only show marginal growth. The highest growth is forecast to come from the Asia-Pacific market.
  • Automotive Coatings Market: Technologies such as UV curing for automotive coatings are heralding new growth opportunities for the global automotive coatings market, but a spike in raw materials such as titanium dioxide has hurt this market to a certain degree. Eco-friendly powder coating and water-based coatings are rapidly gaining market share because solvent-based coatings are known to bring much damage to the environment.

Regional Growth in the Automotive Industry 

Asia Pacific is the most prolific automotive and automobile manufacturing region in the world, followed by Europe and North America. However, the Euro zone crisis has weakened Europe’s position in the global automotive industry, and it is expected to be overtaken by North America. The latter has reported a healthy increase in vehicle production in recent years. 

In APAC, China and Japan continue to remain a manufacturing, supply and distribution hub. However, Japan reported a fall in automobile production in 2013. Australia, on the other hand, has seen the collapse of its automotive manufacturing industry because of the high cost of labor and manufacturing that prevails here. 

Automotive Industry Leaders

In 2014, Toyota trumped Volkswagen AG to accede to the position of the largest carmaker in the world. The Japanese automaker sold about 10.23 million vehicle units in 2014, while its nearest competitor—Volkswagen—sold 10.14 million units in the same year. The other key players in the global automotive industry are GM, Renault-Nissan and Hyundai-Kia in that order.
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