The global automotive lighting market revenue was valued at USD 37.25 billion in 2022. It is projected to reach USD 71.14 billion by 2031, growing at a CAGR of 7.5% during the forecast period (2023-2031). Asia-Pacific leads the global automotive lighting industry with innovative technologies, regulations, and safety concerns. Europe follows with mandatory use of DRLs and advanced solutions. North America ranks second with population, production, and lifestyle factors. LAMEA lags behind with low awareness, resources, and skills, but has positive prospects.
A lighting system comprises lighting and signaling devices placed at various locations in an automobile, such as the rear, side, front, and interior. It provides illumination to the driver and pedestrians and enhances the vehicle's interior and external appearance. An increase in the sales of automotive vehicles is one of the significant factors driving the growth of the global automotive lighting market. For instance, according to the Organization International des Constructeurs d'Automobiles (OICA), an increment of more than 30% in automotive sales is recorded every year. The sales of automotive vehicles were pegged at 93.9 million units in 2016, as compared to 89.7 million units in 2015. Government initiatives and programs targeting reducing road accidents and enhancing the driving experience are projected to stimulate the growth of the market. Besides, eco-friendly product development initiatives executed by key players are also expected to propel automotive lighting market growth.
Strict lighting regulations in Europe and North America have driven developed countries into the vehicle lighting industry. Vehicle lighting is critical, especially when traveling on busy highways. Road accidents are a source of concern for governments all over the world. Road traffic collisions kill 1.3 million people each year, according to the World Health Organization (WHO). Road accidents cost the majority of countries 3% of their GDP. As a result, it is critical to improving road conditions, which can be accomplished in part by upgrading the lighting system. To improve road safety, the European Union mandated the deployment of daytime running lights (DRLs) on all new cars in 2011. DRL's purpose is to help other road users see the vehicle, not to help the driver see the road. According to the National Highway Traffic Safety Administration (NHTSA) of the United States Department of Transportation, DRL reduced fatal road accidents by 13.8%. Therefore, government regulations are likely to have an impact on the growth of the global market.
During the forecast period, the increasing adoption of advanced lighting in vehicles is expected to drive increased demand for this market. Key OEMs are concentrating their efforts on developing and implementing advanced lighting to enhance vehicle visibility and appearance. Hella GmbH, for example, is involved in the development and supply of advanced automotive lighting systems. The lighting system has functions such as connectivity with pedestrians to ensure pedestrian safety and customer satisfaction.
Like many industries, the lighting supply chain is highly globalized and vulnerable to macroeconomic shocks such as tariffs and the COVID-19 pandemic. These disruptions exposed manufacturers' vulnerabilities. Shipping delays and component shortages, such as semiconductors used in electronics and, in particular, LED drivers, have extended lead times and impacted product availability in the lighting industry. Several major LED product manufacturers in the United States announced price increases ranging from 2% to 8% on LED luminaires and up to 9% on LED drivers. Higher shipping costs, unstable logistics, raw material shortages, unfavorable exchange rates, and supplier price increases were used to justify these increases.
Technological advancements in the automotive lighting field are creating numerous growth opportunities for the market. During the forecast period, the market revenue will be accelerated by the increasing market trend of integrating lights with the Advanced Driver Assistance System (ADAS) into autonomous vehicles. Lighting systems integrated with ADAS reduce the number of collisions on the road and assist drivers in accurately detecting the speed of oncoming traffic. Automotive lighting's ability to enable vehicle-to-vehicle communication, transportation management centers, and vehicle infrastructure systems will drive market demand. The development and integration of laser technology and LEDs in modern vehicles are expected to create opportunities for the growth of the market.
| Study Period | 2019-2031 | CAGR | 7.5% |
| Historical Period | 2019-2021 | Forecast Period | 2023-2031 |
| Base Year | 2022 | Base Year Market Size | USD 37.25 Billion |
| Forecast Year | 2031 | Forecast Year Market Size | USD 71.14 Billion |
| Largest Market | Asia Pacific | Fastest Growing Market | Europe |
Asia Pacific's automotive lighting industry share is expected to grow during the forecast period, owing to the adoption of innovative technologies such as ambient lighting and adaptive lighting. Indian Government in 2017 implemented new regulation of keeping the headlight of two-wheelers turned on with the engine itself. Moreover, the rising population and increasing concerns for vehicle safety are also expected to boost the market growth
Europe is pegged to be a prominent region in the market. The market in this region is being pushed by government regulations. Since 2011, the European Union has decided to make the use of daytime running lights (DRLs) in Europe mandatory whenever the weather is bad. This region's market dominance is expected to be maintained by major key players' early adoption of advanced automotive lighting solutions.
North America ranks second in the market, driven by population growth, increase in vehicle production, change in consumer lifestyle, and economic growth. The U.S. holds the largest share in the region, owing to a high standard of living and increasing sales of vehicles equipped with the latest technologies in the country. In 2022, the U.S Department of Transportation's National highway traffic safety administration allowed automobile manufacturers to use adaptive driving beam headlights on new vehicles.
The LAMEA region accounts for the least share of the market, owing to the low awareness regarding technological advancements. Regional growth in Latin America is restricted by a lack of raw materials and well-trained human resources. On the other hand, steady growth in Africa's automotive industry is providing a much-needed fillip to the region's automotive lighting industry. Considering all factors, the outlook of the market is expected to be positive as the cost of raw materials and labor is low.
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Based on application type, the global automotive lighting market is bifurcated into front, side, rear, and interior.
The interior segment is the highest contributor to the market during the forecast period. This is attributed to the growing emphasis of automotive manufacturers on enhancing vehicle interiors, especially in passenger cars. Interior lighting provides a refreshing, attractive, and pleasant ambiance in a car or commercial vehicle.
The front segment is expected to witness a higher CAGR. The rising adoption of LED headlamps over halogen and Xenon maintains front lights' dominance over the forecast period. Furthermore, advancements in headlights are fueling demand for front lights.
Based on technology type, the global market is bifurcated into LED, halogen, and xenon.
The LED segment is the highest contributor to the market during the forecast period. LED is expected to grow in popularity owing to its low consumption and high power output when compared to halogen. Leading manufacturers are working hard to develop innovative LED lights that will soon replace halogen bulbs. Osram, for example, introduced a new LED automotive light series in December 2018. The series includes headlights with embedded LED technology, low and high beams, turn indicators, position lights, and a daytime operating mode.
The halogen segment is expected to grow at a significant rate. A halogen lamp has a highly-engineered filament, which provides up to a 150-meter-long beam and 20% whiter light as compared to the minimum legal standard.
Based on vehicle type, the global market is bifurcated into passenger cars and commercial vehicles
The passenger cars segment is the highest contributor to the market during the forecast period. This can be majorly attributed to the global demand for passenger cars; for instance, according to the Indian Brand Equity Foundation, the sales of passenger cars reached 2.7 million in 2021.
The commercial segment is expected to grow at a significant rate due to government policies to improve commercial vehicle safety norms.
The pandemic led to a temporary lockdown of the nations, which on a wide scale hindered the verticals of businesses and the industry. The automobile industry, which primarily involves outdoor jobs, has been poorly exposed to the challenges that have contributed to a dramatic decrease in car sales. Furthermore, the instability of the supply chain market mainly due to the closing of national and foreign borders and the adherence to the decision not to use Chinese produced products hampered the growth of the market. However, the considerable spike seen in the sale of the automotive vehicle to limit the usage of public and crowded places may positively affect the growth of the market in the upcoming years.
