Automotive Exhaust Systems Market

Market Overview

The global automotive exhaust systems market size was valued at USD 50.32 billion in 2022. It is estimated to reach USD 85.01 billion by 2031, growing at a CAGR of 6.02% during the forecast period (2023–2031). Factors like increasing sales of passenger and commercial vehicles globally drive the market growth.

An automotive exhaust system transports waste combustion byproducts from the engine, lowering overall loudness. A piping system is designed to expel harmful gases from the passenger compartment. It consists of exhaust valves that permit burnt gases and particulate matter to enter exhaust manifolds through ports. These engine-mounted manifolds combine the exhaust channel into a single outlet pipe, where resonators and mufflers release the exhaust gases into the atmosphere through the tailpipe. In this system, various gases like nitrogen oxides, carbon monoxide, and hydrocarbons are purified and released into the atmosphere. Automotive exhaust systems are currently widely used to remove refined exhaust gases, trap specific pollutants, and reduce the environmental impact of automobiles.

Market Dynamics

Global Automotive Exhaust Systems Market Drivers:

Stringent Government Standards Associated with Carbon Emissions

Increasingly stringent emission standards worldwide are amongst the key aspects boosting the growth of the automotive exhaust system market. Emission performance standards across the globe set a limit for automotive manufacturers and users about the permissible limit on the number of pollutants in exhaust emissions. While such measures have been used to govern the limits for pollutants such as oxides of nitrogen and sulfur, they may also be used to regulate the proportion of greenhouse gasses, particularly carbon dioxide, in exhaust emissions. In the U.S., emission standards are managed by the Environmental Protection Agency (EPA).

Similarly, the Indian government first introduced the Bharat stage emission standards in 2000 to control the output of air pollutants from various IC engine equipment used across passenger and commercial vehicles. Stricter measures have been issued since introducing these emission standards in the country, with all new vehicles manufactured following the norms. Automotive manufacturers are increasingly adopting advanced and efficient exhaust systems to comply with emission regulations, driving market growth.

Increasing Sales of Passenger and Commercial Vehicles Globally

The surging sales of commercial and passenger vehicles globally are expected to drive the automotive exhaust system market in the future. According to the Organisation Internationale des Constructeursd' Automobiles (OICA), an international organization of motor vehicle manufacturers, the sales/registration of new vehicles in Q1 2021 stood at 18.8 million units, an increase of over 26% compared to the 14.9 million units sold/registered in Q1 2020.

Surging disposable incomes across various sections of society have resulted in the growth of the automotive industry in developed economies such as Italy, the Netherlands, and France in the European region. In areas like Asia-Pacific, the Middle East and Africa, and South America, the demand for passenger and commercial cars is also anticipated to increase, strengthening the growth prospects of the automotive exhaust system market.

Global Automotive Exhaust Systems Market Restraint:

Shift Towards Electric Powered Vehicle

The reduction in battery prices is expected to propel the sales of electric vehicles in the near future. Electric vehicles (EVs) are more economical than diesel and gasoline cars and are becoming increasingly affordable, thanks to recent developments in EV technology. The electric vehicle market primarily depends on early adopters who aim to reduce emissions and opt for new technologies.

Additionally, the increased availability of new, affordable models in the global market is expected to favor the sales of electric cars. The electric vehicle market is booming at a remarkable pace globally. This trend of electrification of ICEs is expected to significantly hamper the growth of the automotive exhaust systems market over the forecast period.

Global Automotive Exhaust Systems Market Opportunities:

Lightweight Emission Systems

The demand for lighter vehicles that abide by various agencies' stringent fuel economy and emission regulations is continuously growing. Advanced materials are vital for increasing the fuel economy of vehicles while maintaining performance and safety, as moving a lighter object takes less energy than a heavier one. In addition, lighter vehicles consume less fuel and require lower power to propel the vehicle as they need to overcome less inertia, significantly reducing the amount of CO2 generated. According to industry specialists, reducing vehicle weight by 10% can improve its mileage by almost 6% to 8% and increase fuel economy.

Additionally, automotive OEMs concentrate on several aspects to reduce vehicle weight, such as creating new, lightweight materials, increased drivetrain (engine/transmission) efficiency, and aerodynamic design. Several car OEMs, exhaust system producers, and other businesses are pursuing the development of lightweight items manufactured from composite metals with high-temperature resistance. For instance, Tenneco Inc. provides lightweight, compact systems as well as after-treatment and dosing systems to improve the fuel efficiency and thermal management of the exhaust system and the entire vehicle. Thus, developing such lightweight emission systems is expected to create opportunities for market growth.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global automotive exhaust systems market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

Asia-Pacific is the most significant global automotive exhaust systems market shareholder and is estimated to exhibit a CAGR of 7.0% during the forecast period. Due to rising technology awareness and consumer buying power in the region, the region accounted for around 60% of the global market for automotive exhaust systems. Moreover, developing the automobile sector in developing nations like China and India is anticipated to fuel the market for automotive exhaust systems. India and China, two of the world's fastest-growing economies, have extensive supply chains and logistics networks. The Made in India campaign is projected to draw a sizable amount of investment to the automotive sector because of India's many advantages, including its access to cheap labor and raw materials. The region's expanding e-commerce sector is also projected to spur the demand for commercial vehicles in the upcoming years.

Europe is predicted to exhibit a CAGR of 3.3% over the forecast period. Europe is the second-largest region in this industry and is anticipated to experience substantial growth over the coming years. In this region, stringent government emission regulations are compelling automakers to develop innovative exhaust systems. This, along with the region's increasing adoption of low-emission vehicles, is expected to expedite the growth of this market. However, increasing government initiatives to promote electric vehicles will decrease the region's demand for automotive exhaust systems.

The Latin America region will expand at the second-highest CAGR over the forecast period. Regional expansion is anticipated to be supported by rising vehicle production and sales in nations like Brazil and Mexico. Brazil, the region's top automaker, produces over half of all vehicles sold in South America. The nation is seventh in the world for vehicle manufacturing as well. Around BRL 266 (USD 52.5) billion, or more than 5.5% of the country's GDP, is contributed by the automotive industry.

Mexico is the world's sixth-largest producer of auto parts and the sixth-largest producer of passenger cars. It is also the largest export market for US auto parts. Mexico's automotive assembly and manufacturing sectors have attracted investments from more than 1,100 Tier 1 companies. The country attracts foreign car manufacturers owing to its strategic advantages and trade agreements, including the United States–Mexico–Canada Agreement (USMCA) and North American Free Trade Agreement (NAFTA).

Segmental Analysis

The global automotive exhaust systems market is bifurcated into component, fuel type, and vehicle type.

Based on components, the global automotive exhaust systems market is bifurcated into the exhaust manifold, muffler, catalytic converter, oxygen sensor, and exhaust pipes. 

The exhaust manifold segment owns the highest market and is estimated to exhibit a CAGR of 5.51% over the forecast period. Due to its relatively higher cost than other components, the exhaust manifold industry has maintained a significant market share. On the other hand, the muffler segment is expected to account for most vehicle exhaust system components sales by 2031. Automotive makers are concentrating on adding effective exhaust systems to lower hazardous emissions and noise pollution levels as emission standards tighten. For instance, Hyundai debuted the Creta mid-SUV in 2020 with a dual-exhaust muffler system.

Based on fuel type, the global automotive exhaust systems market is bifurcated into gasoline and diesel. 

The gasoline segment dominates the global market and is projected to exhibit a CAGR of 6.61% over the forecast period. The gasoline segment, which accounted for the biggest revenue share, is expected to dominate during the projection period. In developing nations, internal combustion engines power 9 out of 10 automobiles. While the popularity of electric vehicles has decreased in places like North America and Europe, the lack of an adequate electric vehicle infrastructure in developing nations has continued to drive up sales of gasoline-powered automobiles.

On the other hand, governments worldwide are proposing to forbid the sale of ICE vehicles to promote the adoption of EVs. According to proposals made public in 2017, sales of gasoline and diesel cars and vans will be banned in France and the UK by 2040. But this prohibition was put off until 2035. New gasoline and diesel automobiles would no longer be sold in the country after 2035. Similarly, Paris is developing a plan to phase out all gasoline and diesel automobiles by 2024 and 2030.

Based on vehicle type, the global automotive exhaust systems market is divided into passenger cars and commercial vehicles. 

The passenger cars segment accounts for the largest market share and is anticipated to exhibit a CAGR of 5.4% over the forecast period. The passenger car segment, which accounted for the biggest revenue share, is expected to dominate during the projection period. In 2020, passenger automobiles accounted for more than 71% of all vehicle production. According to the ACEA, there were 569 automobiles per 1,000 people in Europe in 2019. Emerging economies such as China and India are expected to contribute to the additional acceleration of market expansion during the forecast period.

The commercial vehicles segment is predicted to grow at the most significant CAGR over the forecast period. The expansion can be explained by the demand for big vehicles in the logistics and transportation industries. One of the primary end-use sectors for commercial vehicles is logistics. The utilization of trucks and trailers for the transportation of freight is experiencing rapid growth. As a result of evolving lifestyles and urbanization, individuals are increasingly inclined to seek to deliver goods and commodities to their location.

Recent Developments

• July 2023- Kia India, the Indian division of South Korean automaker Kia, rattled up the compact SUV market by introducing the 2023 Seltos facelift. This updated Seltos features significant exterior and interior redesigns. To promote the release of this facelifted model, the company has published a new television commercial (TVC) highlighting the 2023 Kia Seltos' improvements and new features like the dual sport exhaust system.
• July 2023- Milltek Sport is one of the first companies to introduce an enhanced high-performance exhaust system for BMW's M2 Coupé, unlocking even more performance potential from the new baby M vehicle.