The global automotive and transportation industry is characterized by constant innovation leading to integration of various advanced technologies aimed at increasing convenience and safety of consumers and goods. Industry participants range from raw material suppliers, automotive OEMs, distributors, and assemblers to aftermarket players providing wide range of products and technologies for LCV vehicles, HCV vehicles, two wheelers, and cargo ships. The shifting consumer demographics from conventional vehicles to advanced connected alternatives, global automotive brands, increasing discretionary income, and rapidly increasing automotive ownership are among the major factors that are expected to present potential growth opportunities for the industry participants.
Innovation & Technology
The last couple of decades have witnessed a rapid influx of various automotive technologies such as natural gas, electrically fuelled and hybrid engines. Intelligent cars, believed to be precursors to autonomous vehicles, have established a marked presence in the industry. This is mainly attributed to various features such as self-braking, automatic cruise control, parking assistance, accident avoidance systems, electronic throttles and engine controls that significantly enhance user experience. Digitization of the automotive sector is at its infancy, with technologies such as connected car, advanced infotainment systems, and vehicle-to-vehicle communication still to go mainstream. The scenario though, is expected to change in the near future, with these technologies providing major growth traction for the market.
Automotive and transportation market participants have witnessed substantial volatility, intensive competition and low profit margins during the past few years. However, given the economic recovery across the globe, automakers are projected to make substantial investments in R&D to differentiate their offerings and reap rich dividends in the near future. OEMs are increasingly focusing on differentiating their offerings by incorporating advanced technologies, constantly enhancing design elements to improve aesthetic appeal, improving efficiency of manufacturing processes, and upgrading conventional powertrain models.
Automobiles account for a significant share of the global carbon emissions. Various regulatory bodies across the globe have implemented stringent regulations to curb emissions from vehicles, especially in North America and Europe. Moreover, changing regulatory scenario due to amendments in the directives by CAFE and EPA in the U.S. and by EC in Europe is expected to mandate the average mileage of vehicles to meet 60 mpg by 2025. Adoption of continuously variable transmissions (CVTs), light manufacturing materials, aerodynamic developments, and turbo engines, are among the key tactics likely to gain traction to comply with these regulations and sustain strong positions in the automotive and transportation market.
U.S. automotive market witnessed considerable growth in sales numbers till 2015, and is expected to witness steady growth over the following two years. Owing to regional economic cycles, increasing auto loan interest rates and increase in accumulation of used cars in the market, the regional sales are projected to witness moderate decline in 2018. However, demand in Mexico has increased over the last few years and automotive sales are projected to surpass 1.5 million by 2021. Rising regional demand in Mexico and in international markets is expected to position Mexico as a major automotive hub in the near future. Our study projects 50% increase in the installed production facilities over the span of the next five years in the country.
Europe automotive and transportation market size have registered significant economic recovery over the last few years. Automakers in some major Europe economies such as France, Italy, Greece, Portugal, and Spain are suffering through considerable industry fragmentation and very low profit margins. Given the low traction for certain vehicle segments in the developed market of Europe, regional players need to ensure optimal utilization of production facilities in line with consumer inclination towards other vehicle segments.
There is exponential growth potential for the automotive and transportation market in emerging economies. China, the world’ largest auto market registered double digit growth in 2013 and 2014, however witnessed only single digit growth in 2015. However, restrictions have been placed in major cities in China such as Beijing, Guangzhou and Shanghai on new vehicle ownerships, which will inhibit market growth. Several global brands have witnessed stiff competition from local players even after establishing joint ventures, and selling vehicles at relatively lower margins. Moreover, relatively flat growth in India in 2016 and exceedingly negative growth trends in Russia and Brazil over the last couple of years have had an adverse impact on growth of the automotive sector. Introduction of cost effective and efficient models of growth by regional players is expected to strengthen their position in the market.
Countries in Middle East and Africa such as Iran, Egypt, Algeria, South Africa and Nigeria are projected to present strong and consistent growth prospects for players operating in the automotive & transportation market, owing to large potential of unmotorized areas, increasing car ownerships and investments from major brands that include Renault and PSA Group. According to Coherent Market Insights research, production output will escalate by 40% in this region by 2020 compared to that in 2016. Unique regional factors such as local trade tariffs for automobiles and parts, domestic assembly quotas, fuel preferences, possibility of dictation by regional authorities for exterior and interior features of the models are expected to be key challenges for automakers, given the presence of key emerging economies in the Middle East and Africa regions combined.
Major players are adopting inorganic growth strategies in order to strengthen their foothold in the highly competitive and lucrative sector. 2016 witnessed around 600 deals valued at over US$ 40 billion in the global automotive sector. The acquisition of LeasePlan Corporation N.V. by LP Group B.V. for a deal valued at around US$ 3.7 billion was the largest transaction of the year. The year witnessed as many as 10 deals valued at a billion dollars each. The automotive sector is expected to gain rapid traction in the following few years, with India poised to be a key growth engine. This is mainly attributed to supportive government initiatives to usher in growth of the automotive sector that contributes to 7.1% of the country’ GDP. For instance, as per stats released by India Brand Equity Foundation (IBEF)— a Trust established by the Department of Commerce, Ministry of Commerce and Industry, Government of India—the government’ decision to allow 100% FDI in the industry has led to foreign investment valued at a whopping US$ 15.7 billion between April 2000 and September 2016. Advent of blockchain technology, augmented reality to assist driver safety, 3D printing, autonomous vehicles, machine learning, collaborative monetization, and utilization of predictive analytics is expected to create significant growth potential to players operating in the global automotive and transportation sector.
Market Overview Cabin AC filter is an integral part of the HVAC system that avoids the entry of airborne pollen, dust, and other allergic materials that can result in an unpleasant environment and can cause harm to... Read more
Market Overview An air inject check valve is a device that is used to prevent the exhaust air from entering the engine. The air inject check valve is positioned near the exhaust manifold in such a way that it allow... Read more
All-terrain vehicles are also known as quad bikes. There are two variants of quad bikes: three wheeler and four wheeler. All-terrain vehicles are capable of reaching remote areas in dessert, mountains, and snow lands. The lighting systems of ATV can be categorized int... Read more
Next Generation In-vehicle Networking (IVN) Market – Insights In-vehicle networking is also known as the in-vehicle multiplexing. It is a method of transferring data or signals among the electronic co... Read more
Industrial burners releases heat and specific flame which can be controlled in combustion chamber and used for various industrial operations such as heating, melting, steam production, manufacturing, and other operations. Industrial burners are used for various applic... Read more
Market Insight- Global Off-highway Vehicle (OHV) Telematics Market Market Overview Telematics is the technology of receiving, sending, and storing information ... Read more
Market Insight- Global Automotive Pumps Market Market Overview Automotive pumps are essential component in an automobile or any other internal combustion engin... Read more
Market Insight- APAC Automotive Telematics Market Market Overview Telematics in automotive is an interdisciplinary field that includes vehicular technologies n... Read more
The automotive wiring harness connects various components of a motor vehicle that requires electricity for functioning such as starter, battery, and alternator. An automotive wiring harness simplifies the wiring connection of automotive cars. The wiring harnesses are ... Read more
Market Insight- Global Automotive Washer System Market Market Overview There are major two types of automotive washer systems namely the windshield washer sys... Read more
Market Insight- Global automotive lead acid battery Market Market Overview An automotive lead acid battery also referred to as starting, lighting, & igniti... Read more
Market Insight- Global Automotive Interior Leather Market Market Overview The automotive interior leather is used in the upholstery and interior of a vehicle, ... Read more
Market Insight- ASEAN Automotive Aftermarket Market Overview The automotive aftermarket is the secondary market of the automotive industry which deals with man... Read more
Market Insight- Global Train Seat Materials Market Market Overview Train seats are manufactured from different types of materials such as wool, leather, vinyl,... Read more
Smart Pallet Sensors Market - Insights Smart pallets are plastic or wooden pallets equipped with sensors for tracking products, which are in the supply chain. The smart pallets can measure the humidity and ... Read more
Second Hand Vehicle Trading Service Market- Insights Second hand vehicles or used vehicles are defined as vehicles that are already registered and are available for sale. In recent years, the longevity, relia... Read more
Market Insight- Global Car Security System Market Market Overview Car security system or vehicle security system is an intelligent electronic device installed ... Read more
Market Insight-Europe Automotive Parts Remanufacturing Market Market Overview Remanufacturing is the rebuilding of the product according to specifications of ... Read more