Auto Parts Manufacturing Market to Cross the US$532 Billion Mark by 2029, Propelled by Electrification and Technological Advancements - Report by Persistence Market Research
Persistence Market Research
11 min read
The rise of electric vehicles is a game-changer for the auto parts industry, requiring a shift towards new components like batteries, electric motors, and power electronics.
New York, Jan. 10, 2024 (GLOBE NEWSWIRE) -- The global auto parts manufacturing market is expected to reach $532 billion by 2029, growing at a CAGR of 4% from 2023 to 2029, according to a new report by Persistence Market Research. The market is driven by factors such as the increasing demand for automobiles, the rising popularity of electric vehicles (EVs), and the adoption of advanced technologies such as artificial intelligence (AI) and the Internet of Things (IoT).
This report presents a comprehensive examination of the auto parts manufacturing market, conducting an analysis of various component types. The document encapsulates insights into both the overarching auto parts manufacturing market and the specific submarkets poised to influence its growth trajectory. Offering a succinct overview of the parent market, the report delves into the pivotal markets that will shape the future landscape of the auto parts manufacturing industry. Additionally, it furnishes concise insights into the anticipated performance of the auto parts manufacturing market across different global regions, drawing from both historical trends and future growth prospects within each respective geographic area.
Asia-Pacific region is expected to dominate the market, driven by government incentives for EV adoption and a large domestic auto industry. Europe, with its stringent emission regulations and high adoption of EVs, is also a significant player. North America, while mature, offers potential in niche markets and advanced technologies.
North America, Latin America, Europe, South Asia & Pacific, East Asia, The Middle East & Africa
Key Companies Profiled
Robert Bosch GmbH, Denso Corporation, Valeo SA, Continental AG, Delphi Automotive PLC, ZF Friedrichshafen AG., Magna International Inc., Faurecia SA, Magneti Marelli SpA, Aisin Seiki Co., Ltd., Brembo SpA, Akebono Brake Corporation, Hella KGaA Hueck & Co., ACDelco, and other regional players.
Key Growth Factors Shaping the Future of the Market:
Electric Vehicles to Drive Demand for Advanced Auto Parts: The rising popularity of EVs is creating a significant demand for new and advanced auto parts. EVs require specialized components, such as batteries, electric motors, and power electronics, which are different from those used in conventional vehicles. This is creating opportunities for auto parts manufacturers to develop and supply these new components.
ADAS Adoption to Boost Market Growth: The increasing adoption of ADAS features, such as lane departure warning, automatic emergency braking, and adaptive cruise control, is also driving the demand for auto parts. ADAS systems rely on a variety of sensors and actuators, which are manufactured by auto parts suppliers.
Focus on Lightweight Materials to Improve Fuel Efficiency: Automakers are increasingly focusing on using lightweight materials, such as aluminum, carbon fiber, and magnesium, in their vehicles to improve fuel efficiency and reduce emissions. This trend is also benefiting the auto parts manufacturing market, as it creates demand for new and innovative components made from these materials.
Safety First: Features Drive Future Growth: The growing focus on vehicle safety is also driving the demand for auto parts. Governments around the world are implementing stricter safety regulations, which is leading to the development of new safety technologies, such as airbags, seatbelts, and autonomous emergency braking systems. These technologies require a variety of advanced auto parts, which is boosting the market growth.
Supply Chain Realignment Paves the Way for New Players: Global supply chain disruptions have exposed the vulnerabilities of relying on a handful of concentrated manufacturing hubs. As major automakers diversify their sourcing strategies, new opportunities are emerging for regional players and innovative startups. This is fostering a more dynamic and competitive market, with a focus on resilience and technological advancement.
The auto parts manufacturing market, despite its projected growth, faces a number of significant challenges. Here are some of the key hurdles it needs to overcome:
1. Shifting Demand:
EV Disruption: The rise of electric vehicles requires manufacturers to adapt to entirely new components and production processes, while traditional parts like engines and transmissions experience declining demand.
Volatile Fuel Prices: Fluctuations in fuel prices can significantly impact demand for new vehicles and spare parts, leading to instability in the market.
Consumer Preferences: Changing consumer preferences towards features like fuel efficiency, connectivity, and autonomous driving require constant innovation and adaptation.
2. Supply Chain Disruptions:
Geopolitical Tensions: Trade wars, sanctions, and political instability can disrupt global supply chains, leading to shortages of raw materials and components.
Natural Disasters: Pandemics, earthquakes, and other natural disasters can cause factory closures and transportation disruptions, impacting production and delivery schedules.
Labor Shortages: Skilled labor shortages in key manufacturing regions can lead to higher production costs and delays.
3. Cost and Competition:
Price Pressure: Automakers are constantly putting pressure on suppliers to reduce costs, making it difficult to maintain profitability while investing in innovation.
Intensified Competition: The market is becoming increasingly competitive, with new players entering from emerging economies and established players consolidating their positions.
Rising Raw Material Costs: Fluctuations in the prices of raw materials like metals and plastics can significantly impact production costs.
4. Regulatory Landscape:
Stringent Emission Standards: Governments are implementing stricter emission regulations, forcing manufacturers to develop cleaner and more efficient technologies, which can be expensive.
Data Privacy Concerns: As vehicles become more connected, concerns about data privacy and cybersecurity pose significant challenges for manufacturers.
Safety Regulations: Evolving safety regulations require continuous improvement in vehicle components and production processes, adding to the cost burden.
5. Technological Advancements:
Rapid Technological Change: The pace of technological innovation in the automotive industry is rapid, requiring manufacturers to constantly invest in research and development to stay ahead of the curve.
Skilled Workforce Needs: The adoption of new technologies like automation and artificial intelligence requires a workforce with new skillsets, which can be challenging to find and train.
Integration Challenges: Integrating new technologies seamlessly into existing production processes can be complex and costly.
Opportunities for Existing Players and New Entrants in the Auto Parts Manufacturing Market
The dynamic auto parts manufacturing market presents exciting opportunities for both established players and new entrants. Here's a glimpse into the potential avenues for each:
Existing Players:
Leverage Brand Recognition: Established players have a strong brand reputation and existing customer base. They can leverage this to introduce new EV-related components and capitalize on the growing demand.
Embrace Strategic Partnerships: Collaboration with startups or tech giants can help them access cutting-edge technologies and expertise in areas like battery production, autonomous driving systems, and connected car technology.
Invest in Supply Chain Resilience: Diversifying sourcing, adopting advanced logistics technologies, and building regional production hubs can mitigate supply chain disruptions and ensure consistent delivery.
Focus on Operational Efficiency: Implementing automation, data analytics, and lean manufacturing practices can optimize production processes, reduce costs, and improve profitability.
Expand into Aftermarket Services: Offering maintenance and repair services for EVs and advanced driver-assistance systems can create recurring revenue streams and strengthen customer relationships.
New Entrants:
Specialize in Niche Markets: Focusing on specific EV components, like battery management systems or charging infrastructure, can offer a competitive edge in a rapidly evolving market.
Develop Disruptive Technologies: New entrants can bring fresh perspectives and innovate in areas like lightweight materials, energy-efficient components, or AI-powered manufacturing processes.
Embrace Direct-to-Consumer Models: Bypassing traditional distribution channels and selling directly to customers online can reduce costs and offer competitive pricing.
Offer Sustainable Solutions: Focus on developing eco-friendly materials, recycling processes, and energy-efficient production methods to cater to the growing demand for sustainable practices in the industry.
Partner with Established Players: Collaborating with existing manufacturers can provide access to expertise, production facilities, and distribution networks, accelerating their entry into the market.
Competitive Landscape
The auto parts manufacturing market is highly competitive, with a large number of players vying for market share. Some of the major players in the market include Robert Bosch GmbH, Denso Corporation, Valeo SA, Continental AG, Delphi Automotive PLC, ZF Friedrichshafen AG., Magna International Inc., Faurecia SA, Magneti Marelli SpA, Aisin Seiki Co., Ltd., Brembo SpA, Akebono Brake Corporation, Hella KGaA Hueck & Co., ACDelco, and other regional players. These companies are investing heavily in research and development in order to develop new and innovative products.
In terms of market structure, the auto parts manufacturing market has been representing a dynamic competitive scenario, wherein the leading players majorly strategize on innovative product portfolios. Automobile manufacturers are also observed to be focusing on high performance vehicles, which can efficiently sustain in any terrain or climatic condition.
Over the past five years, a considerable increase in the number of consolidation and expansion activities has been witnessed in the auto parts manufacturing market. Post the global slowdown, Asia Pacific automotive sales have been gaining traction. OEM sales of radiators in the global automotive market have been positively influenced by the ever increasing demand for vehicles, prompting automobile manufacturers to improve production output to accommodate growth.
Auto Parts Manufacturing Market Segmentation: Unveiling the Hidden Segments
The auto parts manufacturing market isn't a monolithic entity; it's a diverse ecosystem composed of distinct segments, each with its own unique characteristics and growth potential. Understanding these segments is crucial for any player, be it an established giant or a nimble newcomer, to navigate the market effectively. Here are some key ways to segment the auto parts market:
By Type:
Engine Components: This segment includes pistons, cylinders, crankshafts, and other vital parts of the internal combustion engine. It holds a significant market share but faces potential decline due to the rise of EVs.
Transmission Components: Gears, clutches, and torque converters belong to this segment, which is also impacted by the shift towards electric drivetrains.
Chassis & Body Components: This broad segment encompasses frames, body panels, suspension systems, and wheels. It remains relatively stable with potential for growth in lightweight materials and safety features.
Electrical & Electronic Components: Wires, sensors, batteries, and electronic control units fall under this segment, experiencing the highest growth due to electrification and advanced driver-assistance systems.
Underbody Components: Exhaust systems, catalytic converters, and fuel tanks comprise this segment, facing potential decline with the shift towards alternative fuels.
Other Components: This segment includes filters, wipers, mirrors, and interior components, offering diverse growth opportunities depending on specific product categories.
By Application:
Original Equipment Manufacturer (OEM): This segment caters to vehicle manufacturers during the initial assembly process, demanding high quality and stringent compliance standards.
Aftermarket: This segment caters to vehicle repairs and replacements, offering a wider range of parts with varying price points and performance levels.
Commercial Vehicles: This segment deals with parts for trucks, buses, and other heavy-duty vehicles, often requiring robust and durable components.
Regional Insights:
Asia Pacific to Remain the Dominant Region
The Asia Pacific region is expected to remain the dominant market for auto parts manufacturing, accounting for over 40% of the global market share in 2027. The region is home to a large number of automobile manufacturers and suppliers, as well as a growing middle class with increasing disposable income. China and India are the two largest markets in the region, and they are expected to continue to grow at a rapid pace in the coming years.
Europe and North America to Follow
Europe and North America are the second and third largest markets for auto parts manufacturing, respectively. These regions are home to a number of established automobile manufacturers, as well as a well-developed automotive supply chain. The European market is expected to grow at a steady pace in the coming years, driven by the increasing demand for EVs and the adoption of advanced technologies. The North American market is expected to grow at a slower pace, due to the fact that the region is already saturated with automobiles.
Key Questions Answered in the Report on the Auto Parts Manufacturing Market
Which region is anticipated to hold a prominent market share over the forecast period?
What will be the key driving factors prompting the demand for auto parts manufacturing during the forecast period?
How current trends will impact the auto parts manufacturing market?
Who are the significant market participants in the auto parts manufacturing market?
What are the crucial strategies of prominent players in the auto parts manufacturing market to upscale their positions in this landscape?
About Persistence Market Research:
Business intelligence is the foundation of every business model employed by Persistence Market Research. Multi-dimensional sources are being put to work, which include big data, customer experience analytics, and real-time data collection. Thus, working on “micros” by Persistence Market Research helps companies overcome their “macro” business challenges.
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