Automotive Steel Market Size, COVID-19 Impact Analysis, Regional Outlook, Application Development Potential, Price Trends, Competitive Market Share & Forecast, 2021 – 2027
Report ID: GMI3310
Automotive Steel Market size will expand at a substantial CAGR over 2021-2027 powered by the increasing volumes of automotive production across the globe. Steel has long been, and continues to be, the primary material choice for automotive parts and components across the world. It offers desirable standards in safety and strength for automakers at relatively low costs compared to other alternatives. Steel is widely preferred in the auto industry owing to high-strength, durability, and reliability. Additionally, it can be easily recycled at the end of its long life.
The automotive steel industry is witnessing the increasing application of advanced high-strength steels (AHSS) in nearly every new vehicle design. It makes up the majority of the body structure of modern vehicles, allowing lightweight, optimized vehicle designs that improve safety as well as fuel efficiency.
In terms of the application landscape, the powertrain segment could account for a significant automotive steel market revenue share through 2027. The engine block is typically made of cast iron while machinable carbon steel is utilized for designing wear-resistant gears. The growing trend of vehicle ownership worldwide due to the rise in disposable income levels is fueling automotive manufacturing activities, which will boost automotive steel demand considerably.
Considering the type of vehicle, the automotive steel industry is slated to witness lucrative opportunities across the PCV segment. The adoption of PCVs (passenger-carrying vehicles) around the world is growing exponentially. Between January and April 2021, the number of passenger vehicle registrations in the European Union increased by more than 24.4% to hit 3.4 million in total, according to the European Automobile Manufacturers Association (ACEA). The growing consumer preference for personal mobility will further drive PCV sales across the world, augmenting the industry share in the forthcoming years.
Geographically, the North America automotive steel market is projected to grow at a notable CAGR between 2021 and 2027. The regional steel demand will be largely driven by the increasing production of electric vehicles and autonomous cars. In April 2021, the Biden Administration had reportedly urged American automakers to ramp-up EV production to surpass China in terms of electrification. The U.S. government also announced plans to invest over USD 174 billion to accelerate the production of zero-emission cars and buses and add the necessary EV charging infrastructure. The surge in automotive EV manufacturing will certainly benefit the regional steel suppliers.
Nippon Steel & Sumitomo Metal Corp., United States Steel Corp., JSW Group China Steel Corp., Tata Steel Ltd., JFE Steel Corp., Hyundai Steel Co. Ltd., ArcelorMittal S.A., and Posco, Nucor Corp. are among the major automotive steel market players. As the production of automobiles continues to expand, the market players are slated to witness tremendous opportunities in the future. Companies like Volkswagen, Ford, Tata and other major auto makers have already announced a few upcoming car models for the next few years, suggesting considerable demand for automotive steel.
COVID-19 impact on automotive steel market forecast
Automotive steel manufacturers have experienced numerous challenges throughout the COVID-19 pandemic due to strict government protocols, supply chain concerns, raw materials shortages, workforce shortages, and the impact of the global economic slowdown. Steel witnessed a weakened demand due to the temporary reduced automotive production activities, particularly during the first few months of the crisis.
However, the auto industry has recovered significantly during 2020 and automakers are ramping up auto production. The sales of electric vehicles have witnessed a notable uptick in some regions during the pandemic year. For instance, German auto giant Volkswagen recently reported that its sales of all-electric vehicles and battery electric vehicles jumped by more than 158% and 197% respectively during 2020 despite COVID-19 disruptions. Pending orders for most auto makers will also represent a future demand for steel. For instance, Tesla was expected to push more EV deliveries to 2022 instead of 2021, indicating the large number of orders it has received over this year.
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