Automotive Exhaust System Market Size

Automotive Exhaust System Market Size

Automotive Exhaust System Market size was valued at USD 37.8 billion in 2022 and is estimated to register a CAGR of over 7% between 2023 and 2032, driven by increasing vehicle production and sales.

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According to the National Automobile Dealers Association (NADA), in 2022, new light-vehicle sales concluded at 13.7 million units, and there is an expectation of new-vehicle sales reaching 14.6 million units in 2023, reflecting a 6.6% increase compared to 2022. The exceptional growth in the automotive industry, with increasing vehicle production and sales globally, directly influences the demand for automotive exhaust systems. As more vehicles are manufactured and sold, there is a parallel need for exhaust systems to be installed in these vehicles.
 

Stringent emission standards and regulations imposed by governments are a significant driver for the market. Mandates requiring reduced pollutants drive innovation, pushing manufacturers to develop systems that effectively curb harmful emissions. Quoting an instance, in April 2023, the EPA revealed its intention to introduce more ambitious standards aimed at significantly decreasing harmful air pollutant emissions from light-duty and medium-duty vehicles, commencing with the model year 2027.
 

This proposal extends and builds upon the EPA's previously established standards for federal greenhouse gas emissions in passenger cars and light trucks for the model years 2023 through 2026. It capitalizes on advancements in clean car technology to deliver a range of benefits to the American populace, encompassing the reduction of climate pollution, enhancement of public health, and economic advantages for drivers through decreased fuel and maintenance expenses. These proposed standards are anticipated to be implemented gradually over the model years spanning from 2027 to 2032.
 

However, economic downturns and automotive industry fluctuations resulting in reduced consumer spending on vehicles may limit the adoption of automotive exhaust systems. During periods of economic uncertainty, consumers may delay or reduce vehicle purchases, affecting the overall demand for automotive exhaust systems. The automotive industry's sensitivity to economic conditions can create challenges for the exhaust system market, influencing production volumes and sales.