The global automotive exhaust systems market is estimated to be valued at US$ 44.13 Bn in 2024 and is expected to reach US$ 71.10 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 7% from 2024 to 2031.
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The automotive exhaust systems market is expected to witness positive growth over the forecast period. The growing demand for high-performance vehicles with enhanced functionalities is expected to drive the demand for advanced automotive exhaust systems. Additionally, the strict emission norms implemented by regulatory bodies across countries to reduce the environmental impact is further expected to promote the adoption of efficient exhaust systems. Manufacturers are focusing on developing innovative exhaust technologies such as enhanced catalytic converters that can effectively lower harmful emissions. The rising purchasing power and growing preference for comfortable driving experience are also projected to support the revenue generation in the global automotive exhaust systems market during the forecast period.
Stringent Emission Regulations
The automotive industry has witnessed major changes in the past decade due to the stringent emission regulations imposed by governments and regulatory bodies across the world. Emission norms have become more and more stringent with each passing year in order to control air pollution and reduce the impact of greenhouse gas emissions from vehicles. Automakers are under immense pressure to comply with these emission norms and continually reduce the level of harmful exhaust emitted from vehicles. This has significantly boosted the demand for advanced automotive exhaust systems equipped with sophisticated after-treatment devices.
Stringent emission norms such as Euro 6, Bharat Stage VI in India, and China 6 have compelled automakers to overhaul their exhaust system designs. Advanced emission control technologies such as catalytic converters, diesel particulate filters, and selective catalytic reduction systems have become much more complex to treat multiple pollutants simultaneously. This has translated into increased adoption of high-tech exhaust system components including close-coupled and under-body catalytic converters, particulate matter sensors and EN15191 compliant exhaust gas temperature sensors. Moreover, the tightening emission control deadlines have restricted automakers' time for product development, thereby augmenting outsourcing activities to specialized automotive exhaust system manufacturers. The need to meet regional emission regulations has also encouraged globalization of supply chains and establishment of manufacturing hubs by key players in emerging markets.
For instance, in July 2023, Proton AG, a Swiss company that specializes in privacy and security solutions and AAPICO Hitech Public Company Limited, a Thai automotive components supplier that primarily focuses on the manufacturing of stamped parts, forgings, machined parts, and plastic parts for automotive OEMs, formed a strategic partnership through a joint venture, Purem Aapico, which aims to supply exhaust emission control systems to Proton AG and other vehicle manufacturers in Thailand and the ASEAN automotive exhaust systems market. The newly constructed plant in Amata City Rayong, Thailand, will manufacture exhaust systems and components for both commercial vehicles and passenger cars.
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Growth in Hybrid and Electric Vehicles
The rising environmental concerns and push for lower carbon mobility has accelerated the growth of hybrid electric vehicles and battery electric vehicles in the past few years. Although the share of hybrid electric vehicle (HEV) and electric vehicle (EVs) is still low in the overall passenger vehicle sales, their adoption rate is increasing steadily supported by government incentives and subsidies.
Unlike conventional internal combustion engine vehicles, hybrid, and electric vehicles do not require traditional bulky exhaust systems. However, they still need smaller customized exhaust components to direct the harmful gases from small Internal Combustion Engine (ICE) range-extenders and treat emissions conforming to stringent norms. This presents automotive exhaust system manufacturers with an opportunity to develop new innovative lightweight exhaust modules optimized for hybrid and electric architectures. It is also spurring continuous technology upgrade to produce exhaust parts with improved heat resistance, corrosion protection, and compact designs.
Key Takeaways of Analyst:
Stringent emission norms implemented by various governments worldwide to curb air pollution will drive the demand for advanced exhaust systems equipped with sophisticated emission control technologies. The emissions norms are getting stricter with each passing year, forcing automakers to adopt efficient exhaust systems able to remove particulate matter and other toxic gases from engine fumes.
North America is expected to lead the automotive exhaust system market during the forecast period supported by rising vehicle production in major economies like U.S. and Canada. Both countries are dominated by price-sensitive consumers, prompting exhaust system manufacturers to develop low-cost yet effective solutions. However, development of electric vehicles could emerge as a potential threat since EVs do not require conventional exhaust systems.
Lighter weight aluminum and composite materials may gradually replace traditional heavy metals like steel in exhaust components to boost fuel efficiency. Automakers are actively collaborating with exhaust system vendors to create modular, versatile designs tailored for hybrid and fuel-cell vehicles. Electronic exhaust valves are another emerging technology touted to enhance performance while lowering emissions.
Cost pressures stemming from volatile precious metal prices and customer demand for affordable vehicles may constrain the market growth to a certain extent. Intense competition among numerous small and large exhaust system producers results in pricing pressures and narrowing profit margins.
Market Challenges: Development of electric vehicles
The development of electric vehicles is posing significant challenges for the global automotive exhaust systems market. As electric vehicles do not require traditional combustion engines, they consequently eliminate the need for most automotive exhaust system components. With governments around the world pushing for greater adoption of electric vehicles to reduce carbon emissions from the transportation sector, the demand for exhaust systems in the EV segment is expected to remain quite low.
Market Opportunities: Emerging emission standards in developing countries
The emerging emission standards in developing economies like India, China, Brazil, etc. present a huge opportunity for the global automotive exhaust systems market. These countries are fast industrializing and the vehicle fleet is expanding rapidly to support the economic growth. However, this has also led to rising air pollution problems in urban centers. The tightening emission standards compel automakers to install sophisticated post-treatment solutions like catalytic converters, diesel particulate filters and selective catalytic reduction systems in all types of vehicles ranging from passenger cars to heavy commercial vehicles. This exponential increase in demand for Original Equipment Manufacturer - OEM fitment of latest exhaust technologies presents a lucrative opportunity for global exhaust system manufacturers.
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Insights By Component - Mufflers keeping the noise down
In terms of component, muffler is expected to contribute 32.1% share of the market owing to stringent emission regulations for automotive noise pollution. As mufflers play a key role in reducing vehicle noise levels, original equipment manufacturers focus heavily on developing advanced muffler designs. The strict implementation of regulations such as Euro 6 norms have compelled automakers to install superior mufflers capable of meeting stringent noise limits. Moreover, the growing consumer demand for comfortable driving experiences has pushed muffler manufacturers to minimize exhaust sound through innovative designs. Features like absorptive linings, resonator chambers, and customized piping allow mufflers to effectively suppress noise emissions. Their widespread use across different vehicle categories underscores the critical part mufflers play in addressing legislative compliance.
Insights By Fuel Type - Gasoline's environmental edge
In terms of fuel type, gasoline is expected to contribute 38.7% share of the market owing to its relatively lower emissions compared to diesel. Despite diesel powertrains witnessing increased popularity in recent years, gasoline engines remain the more environment-friendly alternatives in light of ongoing pollution concerns. With regulatory bodies tightening carbon dioxide and particulate matter standards, automakers continue shifting focus towards gasoline-powered vehicles. Additionally, widespread availability of gasoline fueling infrastructure as well as competitive pricing has boosted consumer preference for gasoline cars over other fuel types. Advanced technologies like direct injection and turbocharging are also enhancing the efficiency and performance of new-generation gasoline engines. Such developments offer automakers and consumers an attractive proposition for reducing automotive emissions.
Insights By Vehicle Type - Passenger convenience comes first
In terms of vehicle type, passenger cars is expected to contribute 41.2% share of the market owing to rising consumer inclination towards personal mobility solutions. Passenger vehicles provide drivers with the convenience of door-to-door transportation of people without reliance on public transit systems. Rapid urbanization and expanding road networks have augmented the demand for private car ownership across major economies. Moreover, original equipment manufacturers emphasize product innovations and aesthetic designs catered towards passenger comfort needs. Luxury and premium features such as advanced infotainment, enhanced interiors, and customizable exhaust notes are particularly appealing to individual drivers. The competitive passenger car market also encourages automakers to develop high-quality exhaust systems for ensuring greater road presence and enhanced customer ownership experience.
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North America has established itself as the dominant region in the global automotive exhaust systems market. The region is expected to account for 41.7% of the market share. With the U.S. being the largest passenger as well as commercial vehicle producer, the demand for exhaust systems is consistently high. Strong presence of leading OEMs such as General Motors, Ford, and FCA provides a huge base for local exhaust system manufacturers to cater to replacement and aftermarket demand.
Stringent emission norms implemented by the Environmental Protection Agency (EPA) have forced automakers to invest heavily in R&D to develop efficient exhaust technologies. This has benefited the region's exhaust system suppliers who have evolved into global leaders by offering innovative solutions. For instance, major players like Faurecia and Tenneco have established R&D centers and manufacturing plants catering to North American OEMs as well as markets in other regions. Along with significant manufacturing investments, the suppliers have also customized their portfolios based on engine types, fuel type, and vehicle architecture popular in the American automotive exhaust systems market. This has enabled them to effectively address the replacement needs.
In contrast, the Asia Pacific region has emerged as the fastest growing market for automotive exhaust systems. Factors such as increasing vehicle parc, rising disposable incomes, and growth in commercial vehicle sales are fueling the demand. China, with the world's largest vehicle production, is leading this growth with OEMs steadily enhancing local value addition. Besides, other Southeast Asian countries are also witnessing a boom in the number of passenger cars and two-wheelers.
The thriving aftermarket in the region provides sustained opportunities for both international as well as domestic exhaust suppliers. However, to establish themselves and gain market share in this price sensitive environment, suppliers must offer competitive pricing along with adherence to quality and emission norms. Overall, Asia Pacific’s attractiveness continues to rise due to its massive scale and potential for future increases in automotive demand.
Automotive Exhaust Systems Market Report Coverage
Report Coverage | Details | ||
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Base Year: | 2023 | Market Size in 2024: | US$ 44.13 Bn |
Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
Forecast Period 2024 to 2031 CAGR: | 7% | 2031 Value Projection: | US$ 71.10 Bn |
Geographies covered: |
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Segments covered: |
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Companies covered: |
BENTELER International Aktiengesellschaft, BOSAL, Continental AG, Eberspächer, FORVIA Faurecia, FUTABA INDUSTRIAL CO. LTD, Boysen, Sejong Industrial Co.Ltd., Tenneco Inc., Yutaka Giken Company Limited, Johnson Matthey, BASF SE, Umicore, Klarius Products Ltd, and Cummins Inc. |
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Growth Drivers: |
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Restraints & Challenges: |
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*Definition: The global automotive exhaust systems market involves the manufacturing and sales of automotive exhaust systems fitted in vehicles. Automotive exhaust systems are instrumental in reducing harmful gases emitted from vehicles and making them comply with stringent emission norms. They include components like mufflers, tailpipes, catalytic converters. The market is growing due to strict emission regulations around the world and rising demand for high-performance vehicles with advanced exhaust systems enhancing driving experience.
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About Author
Ameya Thakkar is a seasoned management consultant with 9+ years of experience optimizing operations and driving growth for companies in the automotive and transportation sector. As a senior consultant at CMI, Ameya has led strategic initiatives that have delivered over $50M in cost savings and revenue gains for clients. Ameya specializes in supply chain optimization, process re-engineering, and identification of deep revenue pockets. He has deep expertise in the automotive industry, having worked with major OEMs and suppliers on complex challenges such as supplier analysis, demand analysis, competitive analysis, and Industry 4.0 implementation.
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