Automotive Ignition Coil Market

Market Overview

The global automotive ignition coil market size was valued at USD 9 billion in 2021. It is estimated to reach an expected value of USD 13.37 billion by 2030, registering a CAGR of 4.5% during the forecast period (2022-2030)

One component of a car's ignition system is the ignition coil. These coils produce the high voltage required to ignite the fuel or air mixture in gasoline engines or automobiles. The car ignition system is tough and dependable, and it is built to transform the onboard battery's 12 voltage into a higher voltage to ignite the spark plug.

Modern passenger and commercial cars also have one ignition coil fitted over the spark plug in each cylinder. Significant automobiles do, however, occasionally use a single set of coil packs for every cylinder. Furthermore, single-coil/pencil coils are used for all cylinders in older vehicles with distributors. Additionally, businesses in this sector are proactively launching new products, creating new technology, and implementing new strategies to grow their business in a new market.

Market Dynamics

Global Automotive Ignition Coil Market Drivers

• Growing Market for Used Vehicles

The global market for used vehicles is growing rapidly. The main reason for this growth has been the entry of organized players into the market in developing nations. These players have overcome the trust deficit barrier, which has negatively affected the used-car market in these countries.

The aftermarket has always been majorly driven by older vehicles, as these vehicles require frequent maintenance and replacement of parts and components. The rising vehicle prices and the high-interest rates are pushing buyers out of the new-vehicle market. Also, a record number of lease returns gives customers more options in the used market.

Furthermore, as the smartphone and internet penetration in emerging economies, especially in Asia-Pacific, is increasing, the used-car market is becoming more organized. This is because used-car retailers use digitalization to make their market offerings attractive. Facilities such as the high number of photos and videos on online platforms and the easily-accessible instant finance services online are drawing more customers to buy used cars. All the factors mentioned above drive segment growth.

• Increasing Average Age of Vehicles

The average age of a vehicle refers to the average time of usage. After this period, whether the vehicle needs treatment for reuse or to be replaced with a new one is determined. The European Parliament and Council issued Directive 2000/53/EC on end-of-life vehicles (the ELV Directive), stating the need to harmonize various measures adopted at the country level.

The ELV Directive requires the member states to develop systems to ensure that ELVs are treated in authorized facilities and progressively achieve higher reuse, recycling, and recovery targets. The objective of the ELV Directive is to reach a recovery target of 97% by weight. Hence, automakers are focusing on the design structure by reducing the usage of heavy metals in new vehicles so that they can be recycled easily after completing their estimated standard life period.

The replacement of ignition coils is one of the maintenance and repair tasks that have been increased due to the lengthened average vehicle life. As people travel more miles, they change their ignition coils more frequently, which generates demand for the automobile ignition coil market in the aftermarket. Another element that might affect the average age of automobiles is per capita income, which differs from nation to nation. The average age of automobiles has been rising and was roughly ten years for passenger cars and 11–14 years for commercial vehicles, despite the United States, China, India, and several European nations, such as France and Germany, observing high per capita incomes.

Global Automotive Ignition Coil Market Restraint

• Increasing Adoption of Electric Vehicles

The desire for sustainable mobility significantly influences the demand for electric vehicles. The market for electric vehicles (EVs) is rapidly becoming an essential component of the automotive sector. It offers a solution to improve energy efficiency and reduce emissions of pollutants and other greenhouse gases. The market for electric vehicles is growing because of favorable government initiatives and the rising number of environmental concerns. The market is predicted to grow due to energy costs and competition among new energy-efficient technologies.

In 2020, 3.2 million battery electric vehicles (BEVs) and plug-in electric vehicles were sold globally, up from 2.26 million units in 2019, resulting from a spike in demand for electric vehicles. The combination of new and appealing models, incentive increases provided by government-sponsored green recovery funds, the 95g CO2 standard, increased availability, and intensive EV promotion were the causes of the increase in demand. Hence, the rising demand for electric vehicles poses a significant threat to the ignition coil market for new vehicles.

Global Automotive Ignition Coil Market Opportunities

• Increasing Demand for Remanufactured Parts and Components in the Automotive Industry

Consumers in developing nations have a widespread perception that remanufactured products may be of lower quality than the newly manufactured equivalents. The lower price of used/remanufactured products has been traditionally associated with making up for their perceived substandard quality, increasing the desirability of remanufactured goods in the market. This, in turn, prompted a thorough investigation into how much to charge for these things.

In the APAC area, recovering and reclaiming used parts and restoring them to a condition similar to new ones will enable remanufacturing to play a significant role in developing more sustainable economies and environmentally friendly industrial supply chains. With continuous technological advancements and changing consumer interests, the demand for remanufactured automotive aftermarket parts and components has slowly increased in countries such as China and Japan.

Although remanufacturing has the potential to offer higher resource efficiency in the manufacturing sector, especially within the circular economy standard, there is still an apparent consumer aversion to buying remanufactured products. With increasing vehicles in operation across the region, remanufacturing is expected to offer future opportunities for well-established component manufacturing firms.

Regional Analysis

By region, the global automotive ignition coil market is segmented into North America, Europe, Asia Pacific, and the Rest of the World.

North America accounted for the largest market share and is estimated to grow at a CAGR of 4.4% during the forecast period. The United States has one of the biggest automotive aftermarkets in the world. The number of vehicles in operation (VIO) in the country is growing yearly. The number of VIOs in 2019 was around 276.4 million, which reached 281.4 million in 2020. The vehicle miles traveled (VMT) has also increased over the last four years. In 2015, it was 3.09 million miles; in 2019, it reached 3.26 million miles. However, the trend was broken in 2020, when vehicles registered 2.82 million miles of travel due to the outbreak of COVID-19. With the recovery in business activities expected in the coming years, the VMT is expected to increase. The used car market in the US is estimated at 41 million units annually, which, triggered by the pandemic, may continue to grow in the near future, as people prefer personal vehicles to public transport to maintain social distancing norms and avoid the contraction of the virus. Due to the trends mentioned above, the market is expected to grow at a healthy rate during the forecast period. However, the adoption of electric vehicles in the country remains a restraint to the.

Europe is the second largest region. It is anticipated to reach an expected value of USD 4 billion by 2030, registering a CAGR of 4.5%. France is among the most prominent European countries that are heavily pushing the electrification of the national fleet of vehicles. This factor is expected to propel the market growth for components, such as motors, in the country. The total number of motor vehicles in use has also increased, from close to 43,996,880 million in 2015 to nearly 44,939,481 million in 2019. This indicates that more vehicles will require aftermarket parts and components in the coming future. The average age of automobiles in France is high compared to countries, such as the United Kingdom, Austria, etc. In 2019, the average age of the country's passenger car fleet was 10.2 years. Whereas for light commercial vehicles, the average age was 10.4 years; for medium and heavy commercial vehicles, it was 9.3 years; for buses, the average age was 7.2 years. France is home to several vehicles and automotive component manufacturers, such as Groupe PSA, Valeo, etc., investing in research and development. Valeo is currently working on electrification and thermal management in the transportation industry and enhanced components, such as alternators, HVAC systems, Lithium-Ion battery coolers, etc.

The Asia Pacific is the third largest region. Several major players are investing heavily in setting up facilities in the country to cater to the demand for local OEM manufacturers. For instance, BorgWarner Emissions Systems (Ningbo), a wholly owned subsidiary, celebrated opening its brand-new, cutting-edge design and manufacturing plant in Jiangshan, China, in March 2018. To meet the rising demand for emissions and thermal management technologies in the Chinese automotive market, the new facility will manufacture ignition coils, exhaust heat recovery systems (EHRS), high/low-voltage air heaters, and high-voltage liquid heaters. It will also produce gasoline and diesel exhaust gas recirculation (EGR) systems. Government backing, shifting consumer behavior, and new e-commerce platforms are all contributing to the aging of passenger vehicles and promoting the expansion of China's automotive aftermarket. In addition, owners will look for light service channels with appealing cost-performance ratios once warranties expire and automobiles are resold. This will lure customers away from original equipment suppliers and independent aftermarket suppliers.

Segmental Analysis

The global automotive ignition coil market is segmented by type, operating principle, distribution channel, vehicle type, and region.

By Type

The global automotive ignition coil market is segmented into block ignition coils, coil on plug, and ignition coil rail. The coil-on-plug segment accounted for the largest market share and is estimated to grow at a CAGR of 4.8% during the projected period. Coil-on-plug ignition coils, also known as pencil ignition coils, are directly mounted on the spark plug. Because of its low space demand and minimum power loss, this market is expected to increase significantly throughout the forecast period. Coil-on-plug ignition coils do not require HT leads, resulting in minimal power loss. Coil-on-plug type ignition coil demand is projected to be driven by the implementation of stricter emission requirements, which is expected to raise demand for lightweight and compact ignition systems over the forecast period.

By Operating Principle

The global automotive ignition coil market is segmented into single and dual spark technology. The single spark technology segment accounted for the largest market share and is estimated to grow at a CAGR of 4.5% during the projected period. The single spark technology allows a higher possible range of ignition angle adjustment compared to the dual spark technology. Also, this technology supports the monitoring of misfiring in the ignition system. With the implementation of stringent emission standards and the availability of alternative technologies, the demand for single-spark technology is anticipated to witness a significant decline in demand from OEMs during the forecast period. The aftermarket demand for single-spark ignition coils is expected to remain considerable during the forecast period.

By Distribution Channel

The global automotive ignition coil market is segmented into OEM and aftermarket. The aftermarket segment accounted for the largest market share and is estimated to grow at a CAGR of 4.8% during the forecast period. A large number of gasoline-powered vehicles in use worldwide is anticipated to drive the demand for aftermarket ignition coils. In recent years, the demand for gasoline-powered vehicles has significantly increased. For instance, since 2016, all the new cars sold in China (excluding electric vehicles) have been powered by gasoline. Similarly, 52.1% of all the new cars sold in the first half of 2020 in the European Union were powered by gasoline. The share of gasoline-powered passenger cars has been increasing consistently over the last five years. The ignition coils in these recently-sold gasoline-powered passenger cars are likely to be subjected to replacement in the coming years, which will drive the aftermarket segment's growth during the forecast period.

By Vehicle Type

The global automotive ignition coil market is segmented into passenger cars and commercial vehicles. The passenger cars segment dominated the global automotive ignition coil market and is estimated to grow at a CAGR of 4.5% during the forecast period. The increased demand for used cars and the average age of passenger cars globally are expected to drive the demand for aftermarket ignition coils, as people tend to spend more on repairing and replacing parts to keep their vehicles in good condition.

Recent Developments

• September 2022 - DENSO Corporation has revealed that it has increased the detecting angle of its vision sensor to improve road safety. This will enable the sensor better to identify bicycles and pedestrians around a moving vehicle. Some versions of the Subaru Legacy Outback unveiled on April 13, 2022, for the North American market, and the brand-new Subaru Crosstrek*1, unveiled on September 15, 2022, for the Japanese market, both employ the vision sensor.
• July 2022 - Isuzu Motors Limited (Isuzu), DENSO Corporation (DENSO), Toyota Motor Corporation (Toyota), Hino Motors, Ltd. (Hino), and Commercial Japan Partnership Technologies Corporation (CJPT) announced today that they have started planning. Foundational research on hydrogen engines for heavy-duty commercial vehicles to utilize internal combustion engines as one option further to achieve carbon neutrality.