Market Overview:

The global Vehicles Lighting market was valued at 1954.35 million USD in 2022 and will grow with a CAGR of 4.45% from 2023 to 2030.

The car's lighting plays an essential role by illuminating the vehicle's path so that the driver can clearly see the road. In addition to illuminating the driver's path, lighting systems assist other drivers and pedestrians on the road to detect the size, location, and movement direction of the vehicle. It provides the interior and exterior of the vehicle aesthetic appeal and increases the vehicle's visibility. The lighting system includes both illumination and signaling devices. This lighting equipment is installed in various locations throughout the vehicle, including the front, rear, roof, and interior. HELLA GmbH & Co. developed integrated OLED technology for the new Audi A8's rear combination lighting in 2018. This technology provides a homogeneous appearance and controllable segments on an individual basis.

Historically, halogen has been the dominant illumination technology because it is inexpensive and readily available, with xenon and LED also being prevalent. It also enhances the aesthetic appeal of your vehicle's interior and exterior. The demand for lighting apparatus is primarily driven by increasing concerns about road safety and government regulations on lighting. Other factors, such as an increase in disposable income, an improvement in lifestyle, and an increase in transportation needs, contribute to the rise in vehicle production, which in turn drives the expansion of the automotive lighting market.

Significant Market Dynamics:

Drivers:

Increases in discretionary income, improved lifestyles, and altering consumer preferences have had a positive impact on the global sales of luxury automobiles. Multiple driver assistance features, such as Blind Spot Detection, Lane Departure Warning, Adaptive Cruise Control, and Forward Collision Warning System, are not required by law or regulation. To maintain their market position, however, some premium automakers offer these features, resulting in a healthy level of competition among automakers. 

Currently, automobile segments such as E, F, SUV-D, and SUV-E are outfitted with an array of premium features. Luxury automobile manufacturers are shifting their research and development and product development efforts toward electrification. Ford, Stellantis, and Volkswagen, among others, have announced plans to thoroughly electrify their vehicles by the end of the following decade. As a result, major manufacturers of luxury automobiles will introduce numerous electric models.

Advanced lighting technologies such as LEDs, adaptive lighting, and ambient lighting will be integrated into automobiles more rapidly than halogen and xenon HID technologies due to greater efficiency and temperature control. 

As a result, premium segment vehicles, along with increasing electrification and sales trends, are anticipated to boost the automotive headlight market, particularly in China, where one-third of all luxury vehicles manufactured globally are sold.

Restraints:

In 2021, the auto industry lost more than $200 billion due to a global microchip shortage. In 2021, 11 million fewer vehicles have been produced to date. The production facilities had ceased operations. Major global manufacturers, such as Ford, have shut down factories to concentrate on the production of profitable vehicles.

As semiconductor chip shortages continue, corporations that require semiconductors are re-evaluating their long-term procurement strategies. Major manufacturers have already announced significant production cutbacks, resulting in a reduction of billions of dollars in projected revenues for fiscal year 2021. Some companies are implementing a "just-in-time" procurement model, which allows them to restructure their supply chains and reduce inventory costs by ordering semiconductors in advance. The company is increasing capacity by relocating products to other manufacturing facilities, which typically takes six months. Moreover, the company is switching manufacturers. Nonetheless, a year or more is added because the design of the chip must be modified to accommodate a specific manufacturing procedure or to meet the requirements of a new manufacturing partner.

Opportunities:

Matrix LED, OLED, and laser lighting are innovative and prospective automotive lighting technologies. OLED is a novel solid-state lighting technology capable of emitting light over a large area. It is a niche technology that is still in the research and development stage. OLEDs are likely to be implemented in premium segment vehicles in the near future. However, it will take between 10 and 15 years for this technology to achieve significant market penetration. Laser headlights can produce bright light while consuming little energy. Recent market introductions of inorganic LEDs are gaining traction in the global automotive market. Automakers have taken account of these technologies due to their efficient performance. In the future, OLED and laser technologies will also attract automotive OEMs.

Challenges:

Tungsten, molybdenum, glass materials, niobium, tantalum, phosphorus, and mixtures of inert gases are the basic materials used to manufacture various illumination systems, such as xenon, halogen, and LED. Combining various materials and gases is required to develop light sources that consume less energy, emit high-intensity light, and have extended lifetimes. The trend toward decreasing the use of carbon in automotive components has led to an increased reliance on rare earth metals and technical metals. LEDs, for example, utilize trace amounts of phosphors, which are rare earth metals. LED lights save 80 to 90% of energy due to their 5–40 times longer lifespan compared to conventional bulbs.

Access to the accelerated integration of semiconductor, manufacturing, and artificial intelligence technologies, as well as price volatility due to disruptions in the supply chain, trade conflicts, and other factors, are of concern to lighting manufacturers and suppliers. The integration and development of these technologies will require larger R&D teams, which can result in: an increase in the price of automotive illumination. Moreover, manufacturers have long-term supply agreements with major OEMs, which prevent them from benefiting from declining material costs. When material prices decrease, manufacturers lose their competitive edge, and the material loses its cost advantage.

Key Market Updates:

1. In January 2020 – A joint development agreement for LiDAR solutions was signed between Marelli and XenomatiX.
2. In September 2019 - Osram launched the world's first hybrid LED called "Eviyos" specially designed for automotive headlights. Eviyos can provide HD projection to display warnings or symbols to other vehicles on the road.
3. In November 2020 - Global automotive supplier HELLA has developed a new series of compact task lights. The new lights can be placed flat on the vehicle wall and provide improved visibility to the work area around the vehicle.

Market segmentation:

The automotive lighting market is segmented by vehicle type (passenger cars and commercial vehicles), application type (interior lighting and exterior lighting), technology (halogen, xenon, LED, and other technologies), and distribution channel. (OEM and aftermarket). 

 In addition, the report includes market size and projections for the automotive lighting market in 17 countries across the world's main regions. The report provides market size and forecasts for the automotive lighting market in terms of value (in billions of US dollars) for each of the mentioned segments.

Regional Insights:

Europe is expected to be the biggest player in the market. Because of government rules, the market is leaving the area. Since 2011, the European Union has made it mandatory for all drivers in Europe to use daytime running lights (DRLs) when it's cloudy. This region is expected to continue to lead the market because major players have been quick to adopt new lighting solutions for cars.

Asia-Pacific has the second largest share of the market. This is because countries like Japan, China, and India have a lot of raw materials and a huge demand for cheap electrical and mechanical parts.

Market growth is expected to be very strong in North America. High use of automotive lighting systems in North America has led to more sales of electric cars and early use of features from Advanced Driver Assistance Systems (ADAS). In 2020, North America had 23.8% of the market.

Scope of the Report

Key Vendors

KOITO MANUFACTURING CO., Ltd., a public company founded in 1915, manufactures automobile lighting equipment including head and tail lights, rear combination lamps, and fog lamps. The company has production facilities in Japan, the US, the UK, the Czech Republic, China, Thailand, Taiwan, and India. Koito Manufacturing also manufactures electronics parts for aircraft, including lighting equipment and oil pressure gauges.

2. ZKW Group (Austria)

The ZKW Group is the specialist for innovative premium lighting systems and electronics. The group develops and produces products based on our motto, “Bright Minds, Bright Lights,” combining bright minds with modern production technologies to produce complex premium lighting and electronic modules for international automotive manufacturers. 

Their 360 degree product portfolio includes headlamps and fog lamps, rear lamps, flashers, interior and license plate lamps, as well as electronic modules. Major automotive manufacturers trust their brands to innovative products from ZKW. 

As a technology company, Valeo is a partner to all manufacturers in the world and to new actors in the mobility industry, working with them to create cleaner, safer, and more intelligent mobility through its innovations. Valeo focuses on four core areas: electrification, advanced driver assistance systems, interior experience reinvention, and illumination.  In 2021, Valeo generated 17.3 billion euros in revenue and invested 8.7% of revenue in research and development. Valeo has 103,300 employees in 31 countries, 185 production sites, 21 research centers, 44 development centers, and 18 distribution platforms as of December 31, 2021.

4. Varroc Group (Aurangabad, India)

Varroc Group is a global tier-1 automotive component manufacturer and supplier of exterior lighting systems, plastic and polymer components, electrical-electronics components, and precision metallic components to two-wheeler, three-wheeler, passenger cars, commercial vehicles, and off-highway vehicle OEMs. 

With 36 world-class manufacturing facilities, seven research and development centers, and over 6,500 employees across eight countries, Varroc is on an exponential growth trajectory, with net revenues exceeding 58 billion in FY 22. 

With thirty years of consistent commitment to excellence and value-based performance, Varroc provides its customers with the finest design solutions that give them a competitive edge in their respective markets.

5. Hyundai Mobis (‎Seoul, South Korea)

Hyundai MOBIS is an automotive technology specialist. They are the sixth largest supplier of automotive parts in the world. Based on their extensive experience in manufacturing core-modules for vehicles and A/S parts distribution, they are now focused on developing software and system solutions for the future of mobility. Among the most important focus areas are electrification, autonomous transportation, and connectivity technology. The organization develops Innovation for Humanity and future Mobility.

Market Key Players:

• Koito (Japan)
•  ZKW Group (Austria)
•  Lumax Industries (India)
• TYC (China)
•  Xingyu (China)
• Hyundai Mobis (‎Seoul, South Korea)
• Continental AG (Hanover, Germany)
• Koninklijke Philips (Amsterdam, Netherlands)
• Robert Bosch GmbH (Gerlingen, Germany)
• Varroc Group (Aurangabad, India)
• Valeo (Paris, France)
• Hella GmbH (Lippstadt, Germany)
• Denso (Aichi, Japan)
• Lear Corporation (Michigan, U.S.)
• OSRAM (Munich, Germany)
• Magneti Marelli (Corbetta, Italy)

Major Market Segments Covered:

• By Type:

• Xenon Lights
• Halogen Lights
• LED
• Other

• By Application:

• Front Light
• Rear Combination Light
• Fog Lights
• Interior Lighting
• Others

• By Region:

The industry is expected to be dominated by Europe. Government regulations are pushing the market out of the region. Since 2011, the European Union has made it mandatory to use daytime running lights (DRLs) across Europe whenever the weather is bad. The dominance of this region in the market is expected to be maintained by the early adoption of innovative automotive lighting solutions among major key players.

Asia Pacific holds the second largest position in the market due to the availability of raw materials and the huge demand for cost-effective electrical and mechanical components from countries such as Japan, China, and India.

North America is expected to witness significant growth in the market. Increased sales of electric vehicles and early adoption of Advanced Driver Assistance System (ADAS) features are driven by the high adoption of automotive lighting systems in North America. North America held a 23.8% market share in 2020.

The rest of the world contributes a minimal market share in the global market. ROW will witness good growth during the forecast period owing to growing awareness and acceptance of advanced technologies.

Conclusion:

The car's lighting is crucial because it illuminates the vehicle's path so the driver can see the road clearly. Historically, halogen has been the most prevalent illumination technology due to its low cost and wide availability. Xenon and LED are also prevalent. As shortages of semiconductor chips persist, companies that require semiconductors are re-evaluating their long-term procurement strategies. In order to increase capacity, the company is relocating products to other manufacturing facilities, which typically takes six months. OLED is an innovative solid-state illumination technology that can emit light over a wide area. It is a specialized technology that is still undergoing research and development.