Increasing stringent pollution control standards, particularly in developed countries, and rising demand for lightweight materials from the automotive industry are key factors boosting the global automotive composites market revenue to reach $ 12.32 billion by 2028.
According to the latest analysis by Emergen Research, the global automotive composites market size reached $ 5.33 billion in 2020 and is expected to expand at a CAGR of 11.2% by 2028.
Rising demand for more fuel-efficient and lightweight vehicles and increasing demand for high-end and premium vehicles are other factors expected to drive revenue growth.
Fuel price hikes have been leading to rising demand for more fuel-efficient vehicles. As a result of the superior strength-to-weight ratio, composites are most widely used to substitute steel and other heavy materials in automotive manufacturing. A significant number of vehicles currently are powered by traditional fuels, including diesel and petrol, and the weight of a vehicle has a substantial impact on fuel efficiency and carbon emissions. Therefore, increasing focus on manufacturing more lightweight vehicles to enhance fuel efficiency is driving revenue growth of the market, the market research and consulting company said.
However, high automotive composites manufacturing and processing costs and complexities in the recycling of composites are factors expected to negatively impact revenue growth of the global automotive composites market to some extent during the forecast period. Raw materials such as carbon fibres and thermoplastic resins are expensive, and their use in the automotive industry is restrained despite various benefits over traditional materials such as steel and aluminium. In addition, high manufacturing costs for composites is hampering the market growth.
Major companies operating in the market include SGL Carbon SE, Toray Industries, Mitsubishi Chemical, Teijin, Hexcel, UFP Technologies, Solvay, Hexion, Huntsman and Gurit.
COVID-19 Impact
COVID-19 had a significantly negative influence on the automotive composites market in 2020. Vehicle manufacturers have been affected due to lockdowns enforced by governments of various countries, which has contributed significantly to a decline in revenue in the automotive composites market. The growth of the automotive composites market in 2020 has also been hampered by factory closures, manufacturing halts, and disruptions across the supply chain.
Trends and Innovations
The rise in demand for customised vehicles in which composites have been used to achieve desired specifications and performance is augmenting the market growth. In addition, OEMs are focusing on reducing CO2 emissions in vehicles manufactured according to standards and regulations in Europe and globally. In April 2019, for instance, the European Union approved regulation 2019/631, which specifies a target of 95 g/km of average carbon dioxide emissions for new passenger vehicles.
North American automotive composites market revenue is expected to expand at a significantly rapid CAGR over the forecast period. Market revenue growth is expected to be boosted by increasing demand for lightweight and more technologically advanced vehicles due to increasing disposable income among consumers. Additionally, advancements in automotive technology and rising demand for luxurious vehicles are expected to continue to support the growth of this region's market, the research firm added.
Courtesy: Emergen Research. NB: Photo is representational; courtesy: SGL Carbon.