The increasing fuel economy standards in countries such as China, Japan, and India have pushed the original equipment manufacturers (OEMs) to focus more intensely on efficiency of vehicles. As a result, there is an increasing demand for vehicles that are lightweight and fuel-efficient. While OEMs are looking forward to meet all the requisites to comply with fuel efficiency standards, the heat shield manufacturers are also heading towards developing lightweight and heat efficiency standards. Between the years 2012 and 2017, 12 out of 13 OEMs reduced their CO2 emissions. Therefore, demand for lightweight and fuel-efficient vehicles would help expand the automotive heat shielding market.
High Costs and Low Production Create a Hurdle to the Growth of Automotive Heat Shields Market
It is recommended that the heat shields should be changed after every 100,000 to 150,000 kilometres. However, many drivers are unaware of this, or even if are aware, tend to ignore it looking at the high cost of replacement. The price of the replacement parts is much higher in aftermarket than that offered by OEMs.
The pandemic has also left a heavy impact on the automotive heat shielding market. The plants and factories were shut down during the lockdown period, which resulted in a shortage of production. This, eventually, led to decreased operating profits and increased input costs. The market thus faced a steep fall in sales due to significant loss of employment during the pandemic. A dip in the consumer spending started to be seen because of the high uncertainty of income sources, which instantly resulted in a significant sales drop in the market for the automotive heat shielding. However, it is expected that the sales will soon regain their momentum due to continued fear of the possible viral spread public vehicles, which will push people towards buying their vehicles.
Restriction on internal combustion engine (ICE) vehicles by countries like Europe, including Rome and Milan, and China also dampens the market for automotive heat shielding. The ICE vehicles use automotive heat shields which face a lot of environmental issues. The ban on ICE vehicles also tends to decelerate demand for automotive heat shielding in Norway, the United Kingdom, and Denmark.
Favourable Government Regulations and Booming EV Demand Act as an Opportunity for Automotive Heat Shielding Market
There has been a robust increase in the demand for electric vehicles (EVs). The demand for battery thermal management systems for EVs thereby gives a boost to the market for automotive heat shielding. The recent government policies such as the California Zero Emission Vehicle (ZEV) Program, which aims at achieving the goal of 1.5 million cars by 2025, encourages EV sales. Retail giants such as Walmart further help manufacturers boost their sales. For instance, Walmart, in the year 2019, announced that it will work with Volkswagen to create fast electronic vehicle chargers.
The governments make it necessary for OEMs to comply with present environmental regulations that demand reduced engine sizes and thereby lesser carbon emissions. Turbochargers and superchargers have been introduced to maintain high power output. These chargers require a heat shield for efficient operations. This, in turn, bolsters demand for automotive heat shielding.
Demand for Metallic Heat Shields Drives Market in North America and Europe
The automotive heat shielding market is largely driven by Asia Pacific, with China being the biggest market for most of the companies. Reasons due to which the heat shielding market is largely dominated by Asia Pacific include cheap labour, low capital investment, and easy availability of raw materials. Europe and North America represent the next largest markets for automotive heat shielding, where demand for metallic heat shields is notably high. Higher rate of auto integration with turbochargers, advanced exhaust systems and automotive electronics is accounting for this demand. Metallic heat shields are more likely to remain sought-after in both these regions in future, which is attributable to their ability to withstand extreme temperature in auto engines and exhaust systems.
Passenger Vehicles Remain Top Demand Generator, Metallic Heat Shields Sought-after
With an increase in urbanization, there has been an increase in the sales of passenger vehicles over the last few years. Urbanisation not only forces the automotive industry to reduce the emission of harmful pollutants, but also forces a shift in the type of vehicle to be purchased. These vehicles are considered to be one of the largest consumer segments for automotive heat shielding manufacturers. The increased demand for light weighted and energy-efficient vehicles boosts sales of passenger vehicles, thereby boosting heat shielding market growth. The metallic heat shields are expected to have the largest value share in automotive heat shielding market because of their ability to withstand a wide variety of temperatures and vehicular pollution.
Key Players: Automotive Heat Shielding Market
The automotive heat shielding market is led by companies such as Autoneum Holding AG, Morgan Advanced Materials, Carcoustics International GmbH, UGN, Inc., and Dana Incorporated. These companies continue to rely on preferred strategies, including partnerships, supply contracts, expansions, and new product developments which help them increase grip in the market of automotive heat shielding.
For instance, Dana Incorporated collaborated with Kenworth, in January 2020, for the development of e-powertrain for Kenworth battery EVs. Dana Incorporated designed the systems for Kenworth K270E battery EVs and supplied an e-power system consisting of auxiliary systems, two battery packs, and an on-board charger. This collaboration strengthened Dana Incorporation’s thermal management solutions for EVs.
Similarly, Autoneum, in September 2018, had opened two production sites in China for the manufacturing of lightweight components for thermal and acoustic management. Located at Shenyang Tiexi and Pinghu, these facilities would manufacture underbody systems for Ultra-Silent functioning, targeting Chinese, European, and US-American customers.