The automotive exhaust market is expected to reach a CAGR of 2.5 % during the forecast period (2022-2029).
The automotive exhaust is used to carry away the gasses from the combustion chamber. The system comprises the muffler, oxygen sensor, catalytic converter, hanger, exhaust manifold, exhaust joints, cat-back, and other components. The exhaust system is of great importance because it dissipates six gases, three of which are toxic, including carbon monoxide, nitrogen oxide, and nitrogen monoxide. The automotive exhaust is used to dissipate harmful gases, muffle the sound, minimize vibrations, and heat transfer, and increase fuel efficiency.
The materials used in the automotive exhaust are EN8 steel, stainless steel, cast iron, and mild steel. The selection for the material is made based on heat resistance, wear, and corrosion resistance. The automotive exhaust system problems may lead to rumbling engine noise, a decrease in fuel economy to nearly 40 %, and a vibrating gas pedal.
The global automotive exhaust market growth is driven by demand for lightweight vehicles, government regulations towards gas emissions, and technological advancements in exhaust systems.
Government regulations toward gas emissions
The automotive exhaust market demand is increasing with concerns about harmful gases approaching the automotive industry. According to the European Parliament, transport is responsible for almost 30% of the EU's total CO2 emissions, of which 72% emissions are from road transportation. As an initiative to reduce CO2 emissions, the E.U. has set a standard for reducing 60% emissions from transport by 2050 compared to 1990 levels. The E.U. fleet-wide emission target from 2021 for new cars will be 95 g CO2/km. The strict government regulations and aimed future standards are expected to bring new opportunities in the automotive exhaust market.
The U.S. Environment Protection Agency stated that 75% of the total carbon monoxide pollution comes from vehicles in the U.S., while transportation causes 28% of the greenhouse gas emissions in the country, with the road to Zero project initiative, the government aims to reduce gas emissions with 70% new car and up to 40% new vans to be ultra-low emission by 2030.
Increasing sales of electric vehicles
The automotive exhaust market is impacted by the increasing sales of electric vehicles, eliminating the need for exhaust systems as electric vehicles run on electricity. Electric vehicles do not need not an exhaust system because the vehicles do not generate any harmful emissions as there is no burning of fuel. Various leading automotive manufacturers have already announced to shift toward electric vehicles in the upcoming years. For instance, Ford will shift completely shift towards electric cars in Europe by the year 2030.
According to New Energy Finance Limited, 28% of cars will be electrically operated globally. Moreover, the sales of electric vehicles in the U.S. are anticipated to reach approximately 18.7 million by the end of 2030, up from 1 million in 2018. Hence, growing sales of electric vehicles will hinder the market growth of the exhaust system market in the forecast period.
COVID-19 Impact Analysis
Due to the pandemic, stakeholders across the automotive exhaust industry have seen a notable impact as all the production work, factories, and other activities were closed. Due to restrictions on traveling worldwide, the automotive industry has to face a huge downfall. According to the Business Today report, the automotive sector suffered a loss of Rs 2,300 crore per day during the pandemic. The industry was hindered by a shortage of raw materials, traveling restrictions, and chain disruptions. After the pandemic, there are still various restrictions on traveling resulting in low demand for the automotive exhaust market.
On the other hand, after the pandemic, governments have made stagnant rules to keep the environment clean. After recommencing all the public vehicles, such as trains, buses, and other public transport systems have not started operating with full strength. Also, the public preferring cars to maintain social distancing will likely boost the automotive exhaust market.
By vehicle, the automotive exhaust market is classified into commercial vehicles, passenger vehicles, and racing cars.
The commercial vehicles exhaust market is expected to grow at the fastest CAGR during the forecast period (2021-2028)
The commercial vehicles automotive exhaust market is expected to hold the largest market for automotive exhaust market in the forecast due to the high demand from the transportation industry and the utmost need for efficient exhaust systems in heavy vehicles. For instance, According to the European Automobfacture association, In February 2021, new commercial vehicle registrations increased by 1.2% to 156,444 units. Also, Daimler AG predicted the demand for trucks is expected to grow by 50-80% in 2021 in India.
German Caravaning Industry Association (CIVD) has 80,000 newly registered motorhomes in 2020, with a similar situation in the rest of Europe and the U.S. Mercedes-Benz Vans gives launched the motor home year 2021 with dynamic multi-way exhaust gas recirculation and an exhaust-gas after-treatment system located close to the engine.
The leading players in the market are coming with new launches accounting for upcoming standards such as Euro 7 standards. For example, in 2021- Eaton's Vehicle Group and Tenneco's Clean Air business group will launch an integrated exhaust thermal management system that will enable commercial truck and light vehicle manufacturers to meet upcoming emissions regulations.
North America region holds the largest market for the global automotive exhaust globally
North American region holds the largest market share for the automotive exhaust market globally and is expected to continue its dominance in the forecast period with strict government regulations, recent launches in the market with modern exhaust systems, and company expansions in the region. Eberspaecher, a leading exhaust system manufacturer is investing USD 30 million in a new operation site in Louisville, Kentucky to serve its recently expanded customer base in the U.S. by August 2021.
The market is also emerged by the luxury car launches with modern and powerful exhaust systems in 2021- Volkswagen will launch its exclusive edition Golf GTI Clubsport 45 of the 221 kW/300 PS with Akrapovic sports exhaust system. In 2020- Honda launched its Ridgeline pickup in the U.S. heavily clad with fender wells and a dual exhaust system. In 2021- Mulliner Bacalar has now completed testing at Bentley's excellence center for W12 engines with Twin-scroll turbochargers exhaust package.
Europe has also observed a significant growth in the market of the Euro VI standards for new heavy-duty diesel-powered engines in Passenger Vehicles, commercial vehicles, and the non-road sector. In 2020- Faurecia developed the Electrically Heated Catalyst, which reduces over 75% of NOx emissions from diesel applications.
In 2020- Volkswagen launched its 2.0 TDI engine with a new Euro 6d emission standard with twin dosing technology in the exhaust gas system. It undercuts the Euro 6d emission standard limits while also running quietly and smoothly.
In 2021- Ford announced that the new Ford S-MAX Hybrid sports activity vehicle designed with a twin-exit exhaust system is routed around the battery to help accommodate its low position for maximum practicality.
The automotive exhaust market is highly competitive with the local player’s presence followed by the global companies, contributing to the major share in the market growth. In addition, some of the key players contributing to the growth of the market are Hirotec Corporation, Cleveland-Cliffs Corporation, Scorpion Exhausts Ltd, Christian Brothers Automotive, Faurecia S.E, Calsonic Kansei, Valeo, Tenneco Inc, Yutaka Giken Company Limited, Eberspächer Group, Benteler International AG and others. The major players are adopting various new strategies to dominate the market, such as launching new products, acquisitions, and collaborations, which are contributing to the growth of the automotive exhaust market globally.
Overview: Eberspächer Group is one of the leading system suppliers and developers of exhaust technology, vehicle heaters, and bus air conditioning systems. The company is also a professional innovation partner for the automotive industry in the air conditioning of special-purpose vehicles and automotive electronics.
Product Portfolio: The Company manufactures various products for exhaust technology including mufflers, pipes, catalytic converters, diesel particulate filters, assembly technology, mounting kits, mounting parts, pipe connectors, decoupling elements, and others.
Key Development: In 2021, Eberspächer Group opened a new plant in Ramos Arizpe for exhaust technology, expanding its presence in the North American market. The plant will operate with 500 people working on manufacturing exhaust systems for Passenger Vehicles and commercial vehicles.
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