Stringent emission norms and rising demand for in-vehicle comfort applications drive the automotive thermal system market to reach $ 49.1 billion by 2026.
According to the market research report - Automotive Thermal Systems marketby application, technology, components, vehicle type and region - Global Forecast to 2026', published by MarketsandMarkets, the market is projected to grow at a CAGR of 3.7% during the forecast period, from an estimated $ 40.9 billion in 2021.
Major players such as Denso, MAHLE, Hanon Systems, Valeo, and BorgWarner dominate the automotive thermal systems market. These companies adopted new product development and expansion strategies to gain traction in the ride-sharing market.
Passenger car segment to grow faster
According to the research firm, the passenger car segment is estimated to be the largest market for automotive thermal systems. China, Japan, Germany, India, South Korea, and the US are the top six countries with the highest passenger car production. The key factors that drive the sales of passenger cars in various countries include per capita income and improved standard of living. In addition, the growing inclination towards comfort and luxury, and demand for advanced features such as heated/ventilated seats, heated steering, and rear air conditioning is expected to drive the market.
Consumers in Europe and North America prefer premium and luxury vehicles, and the demand for these vehicles in key Asian countries such as India and China has witnessed an upward trend in recent years. As a result, it has boosted the global demand for advanced thermal systems in these vehicles.
Waste heat recovery segment to gain momentum in terms of application
The thermal system market for waste heat recovery is estimated to grow at the highest CAGR of 10.2% during the forecast period. The growth of the waste heat recovery system market can be attributed to the increasing production of commercial vehicles that have turbochargers and EGR as standard fitments. In addition, due to stringent emission norms, waste heat recovery technologies have also been adopted in a gasoline vehicles.
Asia Pacific
Asia Pacific is estimated to be the largest market for automotive thermal systems and is expected to grow at a CAGR of 4% during the forecast period. The Asia Pacific region has emerged as a hub for automotive production in recent years. Changing consumer preferences, increasing per capita income of the middle-class population, and cost advantages have led OEMs to increase vehicle production in the region. Thus, China, India, and Japan have seen a significant increase in vehicle production.
The huge vehicle production in the region offers a tremendous growth opportunity for the automotive thermal system market. Favourable investment policies and the availability of cheap labour have also made the Asia Pacific an ideal market for automotive OEMs. In addition, increased demand for luxury cars with superior cabin comfort has spurred the demand for automotive thermal systems in this region.
Courtesy: MarketsandMarkets. NB: Photo is representational; courtesy: BorgWarner.