The global auto parts market is witnessing robust growth, driven by the increased use of technological advancements and a surge in mergers, acquisitions, and strategic partnerships.
According to Technavio, the market is projected to expand by $354.9 billion from 2024 to 2028, at a compound annual growth rate (CAGR) of 3.2%. This growth trajectory underscores the dynamic nature of the industry, which is continually evolving to meet modern automotive needs.
Key Drivers
The implementation of strategic initiatives such as mergers, acquisitions, and partnerships is a critical driver of growth in the auto parts market. Notably, Hyundai's expansion of its strategic alliance with KT Corporation in September 2022 exemplifies this trend. The collaboration focuses on integrating Information and Communication Technology (ICT) and developing next-generation communication infrastructure, including 6G autonomous driving technologies and the Advanced Air Mobility (AAM) satellite-based communication network. These initiatives are set to significantly bolster market growth over the forecast period.
Emerging Trends
The auto parts market is experiencing significant trends that are shaping its trajectory.
Safety Standards: There is an increasing demand for parts related to brake systems, fuel systems, and cooling components, driven by heightened safety standards.
Fuel Efficiency: The push for greater fuel efficiency is boosting interest in EV-specific auto parts and 3D printing technology.
Economic Uncertainty: Fluctuations in vehicle sales due to economic uncertainty are leading to a rise in demand for aftermarket parts.
Advanced Technologies: Tyres, sensors, radar systems, and LIDAR technology are in high demand for both OEM and aftermarket applications.
Vehicle Production: There is a notable increase in the production of electric vehicles, autonomous vehicles, three-wheelers, and two-wheelers. Manufacturers are investing heavily in autonomous vehicle technology and sensors to meet this growing demand.
E-commerce Transformation: Online platforms and e-commerce are revolutionizing the way auto parts are bought and sold, making the market more accessible and efficient.
Challenges
Despite the positive outlook, the global auto parts market faces significant challenges. The slowdown in automobile manufacturing and sales, particularly in regions like North America and Europe, coupled with rising tariffs on imported vehicles in the US and China, poses a substantial challenge. This has led to halted production by several vehicle manufacturers, reducing the demand for auto parts and hindering market expansion.
Additionally, the growing popularity of electric vehicles (EVs) requires new parts for batteries, motors, and charging systems.
Cutting-edge technologies like 3D printing, autonomous vehicle technology, sensors, radar systems, and LIDAR technology demand continuous innovation from OEM suppliers and aftermarket manufacturers.
The market must also cater to a wide range of vehicles, including three-wheelers, two-wheelers, quadricycles, boats, yachts, and various watercraft, all of which have unique parts requirements. Furthermore, meeting evolving consumer demands, connectivity features, and stringent vehicle emissions regulations presents a continual challenge for the industry.
Some of the prominent players in the auto parts market include 3M Co., AISIN Corp., Akebono Brake Industry Co., Autoliv Inc., BorgWarner Inc., Brembo Spa, General Motors Co., HELLA GmbH and Co. KGaA, Hyundai Motor Co., Lear Corp., Magna International Inc., Marelli Holdings Co., Robert Bosch GmbH, Schaeffler AG, Stellantis NV, Tenneco Inc., The Goodyear Tire and Rubber Co., Toyota Motor Corp., Valeo SA, and ZF Friedrichshafen AG. These companies are at the forefront of innovation, continually adapting to market trends and consumer needs.
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