Automotive Lighting Market: Analysis By Technology, By Vehicle Type, By Position, By Sales Channel, By Region Size and Trends With Impact Of COVID-19 and Forecast Up To 2028

Automotive lighting refers to the lighting systems integrated into vehicles for the purpose of illumination, visibility, and safety. These lighting components include headlights, taillights, brake lights, turn signals, and various auxiliary lighting elements. One of the reasons leading to the rising demand for automotive lighting in recent years is the increased emphasis on safety and visibility. As automotive technology advances, there is a growing awareness among consumers and regulatory bodies about the crucial role that lighting systems play in ensuring road safety. Thus, representing a need and large market opportunity for the automotive lighting market. The global automotive lighting market in 2022 stood at US$33.67 billion, and is likely to reach US$48.80 billion by 2028.

According to WHO, approximately 1.3 million people die each year as a result of road traffic crashes globally and this huge rise in road accidents prompt regulatory authorities to enforce stricter safety standards, potentially leading to mandatory upgrades or enhancements in automotive lighting technology. Some other factors driving the rise in automotive lighting demand include the rising disposable income and improved lifestyle which has led to increased sales of automobiles globally. Additional trends include the styling and individualization of cars, interior lighting, electrification, new functions, rising electronics content, the increased sophistication of products, and ongoing technological advancements like introduction of LEDs, OLEDs, laser lights, adaptive lighting system. In the coming years, these improvements or trends are expected to significantly stimulate demand for automotive lighting. The global automotive lighting market value is projected to grow at a CAGR of 6.38%, during the forecast period of 2023-2028.

Market Segmentation Analysis:

• By Technology: According to the report, the global automotive lighting market is segmented into three segments based on the technology: Halogen, LED and Xenon. Halogen segment acquired majority of share in the market in 2022 as this is the cheapest lighting systems for vehicles and it has been a standard automotive lighting technology for decades because of its easy replacement and widespread availability. Although LED is the fastest growing segment, as it is efficient means of generating light and lighting systems based on LEDs do not take up much space. Also, the shift towards electrification and autonomous driving is expected to drive the growth of this segment.
• By Position: According to the report, the global automotive lighting market is bifurcated into four positions: Front Lighting/Headlamps, rear lighting, interior lighting and others. Front lighting/headlamps segment acquired majority of share in the market in 2022, as it plays a crucial role in ensuring driver visibility and road safety and it is mandate for every vehicle to be equipped with headlamps to prevent road accidents. Although, interior lighting is the fastest growing segment as passengers are increasingly focusing on enhancing the overall driving experience and creating more aesthetically pleasing and comfortable interior environment. Also, the integration of LED technology allows for customizable and dynamic interior lighting, enabling automakers to offer a range of color options and lighting scenarios. As consumers seek more sophisticated and technologically advanced features in vehicles, interior lighting has become a key differentiator for automakers, leading to its rapid growth within the automotive lighting market.
• By Vehicle Type: According to the report, the global automotive lighting market is bifurcated into two vehicle types: Passenger vehicles and commercial vehicles. Passenger vehicles acquired majority of share in the market in 2022 and is the fastest growing segment as well, primarily due to several factors. The increasing consumer demand for advanced safety features and the incorporation of innovative lighting technologies in passenger vehicles have been key drivers. As consumers place a growing emphasis on aesthetics, comfort, and cutting-edge technology in their vehicles, automakers are integrating sophisticated lighting solutions to enhance both the visual appeal and safety aspects of passenger cars. Additionally, the revival of economic conditions post-pandemic has led to a surge in consumer confidence and increased purchasing power, driving the demand for new passenger vehicles equipped with state-of-the-art lighting systems.
• By Sales Channel: According to the report, the global automotive lighting market is bifurcated into two sales channels: OEMs and Aftermarket. OEMs acquired majority of share in the market in 2022 and is the fastest growing segment as well since OEM increasingly prioritize safety and efficiency. OEM parts are guaranteed to fit and almost always come with a manufacturer-backed warranty. Also, these systems are installed in vehicles during the manufacturing process and are integral to the vehicle's design. Additionally, collaborations between OEMs and lighting technology providers allow for seamless integration of innovative lighting features, meeting the evolving preferences of consumers and regulatory standards.
• By Region: The report provides insight into the automotive lighting market based on the geographical operations, namely North America, Europe, Asia Pacific, Latin America and Middle East and Africa. Asia Pacific automotive lighting market held the highest market share in 2022 and is expected to grow at the fastest rate as well, primarily owing to reasons such as increasing production of passenger vehicles, increasing road fatalities, consumer preferences for advanced features, stringent safety regulations, high disposable income of the people and rising sales of luxury cars.
• China is the Asia Pacific’s strongest market for automotive lighting because of its focus on increasing vehicle production, technological advances in automotive lighting, and increasing disposable income of the people. On the other hand, the Indian automotive lighting market is anticipated to grow the quickest in Asia Pacific. This growth is significantly driven by an upswing in demand for premium vehicles and the introduction of new models. Furthermore, increased customer demand for aesthetically pleasing automobile lights and the implementation of strict safety regulations by regulatory agencies are poised to be the major growth drivers.

Global Automotive lighting Market Dynamics:

• Growth Drivers: Increasing sales and production of automotive vehicles has the potential to boost the growth of the automotive lighting market. When the automotive industry experiences growth, there is a parallel surge in the demand for automotive lighting components. This is because every vehicle requires lighting systems for safety and compliance with regulations. As more vehicles are manufactured and sold, the need for headlights, taillights, turn signals, and interior lighting also rises. Further, the market is expected to increase due to rising disposable income, increasing number of road accidents, stringent government regulation, replacement exposure etc.
• Challenges: High cost of LED lighting can present challenge for the automotive lighting market. LED technology comes with a higher initial cost compared to traditional lighting sources such as halogen or incandescent bulbs. This is due to the significant investment required in research, development, and production, as well as the increased heat emission and additional installation costs. Despite its superior performance, this cost remains a barrier. Other challenge that automotive lighting market faces are shortage of raw materials like semiconductor.
• Trends: A major trend gaining pace in automotive lighting market is personalization and pay-per-use. The global automotive lighting market is set to see a shift towards customization and innovative payment models. Carmakers are offering customers the ability to personalize their vehicle's lighting, using LED and OLED technologies for flexible designs. Pay-per-use features, such as adaptive lighting or high-definition projectors, can be offered as optional extras. This aligns with sustainability efforts and user-centric vehicle design. Also, ambient lighting in automotive design is becoming a key element, enhancing the aesthetic and functional interior environment. As cars evolved from transportation to mobile living spaces, ambient lighting became an integral part of the design language, enhancing the emotional experience for drivers and passengers. More trends in the market are believed to augment the growth of automotive lighting market during the forecasted period include connectivity and digitalization, electrification, autonomous driving and technological advancements in lighting systems like introduction of uAFS LED headlights, flexible OLEDs, laser lights and adaptive lighting systems etc.

Impact Analysis of COVID-19 and Way Forward:

The COVID-19 pandemic has had negative impact on the global automotive lighting market. Pandemic disrupted manufacturing operations, supply chains, shortage of raw material, and decreased consumer demand. Lockdowns, production halts, and reduced consumer spending during the pandemic led to a temporary downturn in the automotive industry.

However, as economic activities gradually resumed and the automotive sector recovered, there has been a resurgence in demand for vehicles, including those equipped with advanced lighting systems. The emphasis on safety and technological innovation, coupled with a rebound in the automotive industry, is expected to drive the recovery and growth of the global automotive lighting market post-COVID-19.

Competitive Landscape and Recent Developments:

Global automotive lighting market is competitive with the top six players controlling more than 75% of the global market. It is estimated that Valeo leads the global automotive lighting market along with Koito.

Key players of global automotive lighting market are:

• SL Corporation
• Stanley Electric Co., Ltd.
• Valeo S.A.
• LG Electronics (ZKW)
• Lumax Industries Ltd.
• Koito Manufacturing Co., Ltd.
• Forvia
• Plastic Omnium
• Koninklijke Philips NV.
• Marelli Holdings Co., Ltd

The key players are constantly investing in strategic initiatives, such as adoption of new technologies, introducing their services to emerging markets, mergers and acquisitions, and more, to maintain a competitive edge in this market. For instance, recently, Faurecia acquired Hella and Plastic Omnium acquired Varroc/Osram. Faurecia and Plastic Omnium are becoming important players in the automotive lighting (AL) market following the respective acquisitions of Hella and Varroc/Osram. They join Valeo, a historic major market player. Now, the three largest listed French OE suppliers are directly involved in global AL, with two in the top three and Plastic Omnium immediately joining the top ten.