Automotive Exhaust Systems Market Size and Trends

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.

Automotive Exhaust Systems Market Key Factors

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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.

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.