Automotive Lighting Market Size

Automotive Lighting Market Size

Automotive Lighting Market size exceeded USD 30 billion in 2020 and is anticipated to grow at around 5% CAGR between 2021 and 2027. Increasing production of commercial and passenger vehicles is likely to propel the industry growth. According to the International Organization of Motor Vehicle Manufacturers (OICA), South Africa recorded a 3.5% increase in vehicle production in 2019 as compared to 2018.

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An automotive lighting system provides enhanced visibility in low light areas and ensures safety of pedestrians and other drivers. The ability of brake lights and indicators to alert passengers about vehicle presence and travel direction will drive the market growth.

Technological advancements in automotive lighting field are providing numerous growth opportunities to the automotive lighting market. The amplifying market trend of integrating lights with Advanced Driver Assistance System (ADAS) into autonomous vehicles will accelerate the market revenue during the forecast period. Lighting systems integrated with ADAS reduces the number of collisions on road and aids drivers in detecting the speed of the oncoming traffic with accuracy. The ability of automotive lighting to enable vehicle to vehicle communication, transportation management centers, and vehicle infrastructure systems will surge the market demand.

The fluctuating costs of raw materials and high R&D expenditure for continuous development of innovative technologies in automotive lighting ecosystem are challenging the industry growth. The incumbent industry players invest heavily in R&D activities to develop advanced technologies, making it difficult for new players to enter the market. Varying trade regulations in North America, Asia Pacific, and Europe are affecting the prices of raw materials and sourcing strategies of key players. Moreover, the dynamic landscape of the lighting industry is contributing to the fluctuation revenues of the companies.

The automotive lighting market growth was severely impacted by the COVID-19 pandemic. The decline in market demand can be accredited to the significant reduction in automobile sales during 2020. Several commercial and passenger vehicle manufacturers faced a decline in sales of new vehicles due to global economic uncertainties. This led to reduced demand for automotive lighting systems. Additionally, automotive lighting manufacturers observed severe shortage of skilled labor and critical electronic components impelled by restrictions on foreign trade and movement. However, the automotive lighting market is expected to witness a steady recovery in the first half of 2021.