The global automotive parts aluminum die casting market size was valued at USD 26 billion in 2021. It is estimated to reach an expected value of USD 50 billion by 2030 at a CAGR of about 7.8% during the forecast period (2022 – 2030). The thin and light aluminum die castings have good dimensional stability for complex geometries and thin walls. Because of its high electrical and l thermal conductivity, good mechanical properties, and corrosion resistance, aluminum is an excellent diecasting alloy. During the forecast period, the market demand is expected to be driven by the growing demand for lightweight vehicles and the expanding use of aluminum in diecasting automotive components due to strict environmental regulations worldwide.
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Increasing Demand for Light Weight Vehicles
In recent years, auto parts have witnessed advancements and innovations with the evolution of new technologies. Among them, lightweight materials for manufacturing auto components have been gaining attention worldwide. Among the vital cause for this popularity is the enhanced fuel economy of automobiles with the adoption of lightweight materials in auto parts. Additionally, the lighting of vehicles must be done without compromising on safety before quality and performance. Therefore, aluminum is most preferred by manufacturers due to its varied advantages.
Though aluminum is in use for a long time, new innovations for improving the strength and ductility of aluminum and related casting machinery drive the demand in the market. For instance, In September 2020, Tesla CEO Elon Musk announced that for the new Model Y, 70 components glued and riveted into the car's rear underbody to be replaced with a single module made using an aluminum casting machine. Additionally, as the market for electric and hybrid vehicles grows, automakers are turning to lightweight materials like aluminum to replace heavy metals like steel and iron in all vehicles. Owing to the above trends and technological innovations in improving aluminum's capability with different alloy combinations that suit consumer demands are expected to provide lucrative opportunities for players in the automotive parts aluminum die casting market.
Stringent EPA Regulations and CAFÉ Standards
The regulatory framework in North America and Europe has made a sustainable environment for the automotive sector. The dynamics of the European automobile market have been greatly influenced by the most recent regulation framework, known as Euro 6, which was introduced in 2011 and went into force in September 2014.
The US's National Highway Traffic Safety Administration (NHTSA) and Environmental Protection Agency (EPA) have enforced regulatory frameworks that have contributed to developing a dynamic and challenging environment for the automotive industry. The frameworks predicted that the automaker's average fuel economy would increase to 54.5 mpg by 2025 from 35.5 mpg in 2016. Compared to the average fuel efficiency of 28.6 miles per gallon for the 2011 model year, this might represent a 90% gain. Pollution standards tie together vehicle manufacturers. Therefore, the use of diecasting parts in automobiles has been considerably promoted by the necessity to reduce vehicle weight to reduce emission levels.
Also, to make the vehicle components more efficient, improve the fuel economy, and lower carbon emissions, lightweight construction using efficient and cost-optimized aluminum and zinc high-pressure die casting parts play a crucial role. The companies like Nemak focus on developing lightweight trends and introducing electric vehicle products produced through the die casting process into the automotive industry. All the factors mentioned above drive market growth.
Volatility in Prices of Aluminium
The global alumina market in 2019 witnessed surplus supply, which adversely impacted the price movement in the spot markets in addition to the lower demand from smelters. Alumina prices will remain under pressure in the short term due to an excess supply and weaker demand throughout the aluminum value chain. According to Shanghai Metals Market, the average spot price of alumina in China ranged from USD 428 per ton at the beginning of the year to USD 349 per ton at the end. From the start of 2020 till the present, the average domestic spot price of alumina was USD 354 per ton. Tariffs on imports from US allies, such as the European Union, Mexico, and Canada, on steel (25%) and aluminum (10%) are anticipated to raise aluminum prices in the domestic market. The Aluminum Association claims that even if aluminum production rises in the country, it might not be able to expand it by a sufficient amount to meet demand from American manufacturers. This is expected to increase the cost of aluminum diecasting parts.
The Shift in the Mobility Industry toward Electrification
In addition to on-road electric cars, off-road vehicles like construction equipment, railroads, trains, defense vehicles, and aircraft are electrifying their propulsion systems to attain energy efficiency and lower emissions of pollutants and other greenhouse gases. The increasing environmental concerns, the need to attain a sustainable transportation model, and favorable government initiatives fuel market growth. For instance, the UK government also offered EUR 33 million to AVID Technology and Caterpillar Inc. to develop fully electrical construction machinery.
In response to this changing trend, companies are preparing to mold their business operations toward vehicle electrification. For instance, Mark Aluminium Die Casting invested in a new 600- ton diecasting machine to manufacture high-pressure aluminum die-cast parts for water pumps and oil pumps specifically designed for the next-generation green vehicles. EVs and hybrid vehicles utilize batteries as part of the propulsion system, and due to this, their architecture is entirely different from the ICE ones. To offset the weight of many batteries and associated motors, most vehicle manufacturers utilize more aluminum in their vehicles than steel. This scenario is expected to increase the market sales of aluminum die-casting machinery over the forecast period.
The global automotive parts aluminum die casting market is segmented by the production process, application type, and region.
By production process, the global automotive parts aluminum die casting market is segmented into vacuum die casting, squeeze die casting, pressure die casting, and gravity die casting. The pressure die casting segment accounted for the largest market share and is estimated to grow at a CAGR of 8.2% during the forecast period. Aluminum has been the most preferred metal for pressure die casting. Hybrid and electric vehicle technologies are on the rise within the automotive application. Pressure die casting is expected to be the critical contributor to transmission, power train components, and battery compartment housings. Most high-pressure die castings do not require machining, except for removing flash around the edge and possibly drilling and tapping holes. Thus, high-pressure die castings save a significant amount of manufacturing costs. The Italpresse gauss TF5700 high-pressure die casting (HPDC) equipment was installed at the Nantong Jiangzhong Photoelectricity Co., Ltd. base in Jiangsu province, China, in February 2021. With its enormous 3500 x 3500mm platens and closing force of 5700 tons, the TF5700 is the perfect machine for producing large parts. Jiangzhong also bought a Westomat 3100 from StrikoWestofen to work in tandem with the machine. The above trends are anticipated to continue and drive the market during the forecast period.
The gravity die-casting segment is the second largest. Gravity die casting is one of the traditional methods of die casting. This die-casting process produces accurately dimensioned, sharply defined, and smooth or textured-surface metal parts. The main advantage of gravity die casting is its high speed of production. The reusable die tooling allows many hundreds of castings to be produced daily. High-definition parts reduce machining costs, and superior surface finish reduces finishing costs. Such advantages drive segment growth.
By application type, the global automotive parts aluminum die casting market is segmented into body parts, engine parts, transmission parts, battery and related components, and other application types. The body parts segment accounted for the largest market share and is estimated to grow at a CAGR of 7.8% during the forecast period. Major automakers are employing best-in-class machines for fabricating their body parts. For instance, Audi AG relies on additive manufacturing to produce selected tool segments at its metal 3d printing center in Ingolstadt, Germany. Audi uses the tool segments produced by an EOS M 400 machine in its press shop to create body panels for models like the Audi A4. For next electric vehicles, the business intends to take the same action. The makers of electric vehicles are purchasing the most significant equipment on the market for their body parts. As the demand for lightweight body parts is soaring, companies are working toward dedicated units for production. For instance, the ThyssenKrupp Automotive Body Solutions business unit, which focuses on body assembly solutions and the creation of lightweight body components for the automotive industry, was established in March 2021. OEMs like Mercedes-AMG, BMW, Porsche, Audi, Lamborghini, Jaguar Land Rover, Bentley, Aston Martin, and Tesla are currently represented in the company's customer portfolio. According to the reasons mentioned above, it can be predicted that in the years to come, the industry will be driven by demand for lightweight body components.
By region, the global automotive parts aluminum die casting market is segmented into North America, Europe, Asia Pacific, and LAMEA.
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Asia Pacific accounted for the largest market share and is estimated to grow at a CAGR of 8.2% during the forecast period. The country is the world's largest manufacturer of vehicles, and to stay competitive in this market, companies invest in expanding their production capabilities. For instance, In March 2020, IKD Co. Ltd announced that it might sign an investment agreement with the Administrative Commission of Liudong New District of Liuzhou city. According to the agreement, IKD will invest CNY 500 million to establish five subsidiaries in Liuzhou. These subsidiaries may undertake a high-precision aluminum-alloy die-casting project for lightweight vehicles. The project may include procedures such as high-pressure die casting, application of molding technologies, die production, and molten aluminum processing. With a facility of 60,000 square meters, the project has a construction period of 24 months and may be able to produce 30 million units of high-precision aluminum-alloy die castings annually. Such factors drive segment growth.
Europe is the second largest region. It is estimated to reach an expected value of USD 10 billion by 2030 at a CAGR of about 7.8% during the forecast period. The manufacturing industry contributes 25% of the nation's GDP. The ninth-largest industrial nation in the world is the United Kingdom. On January 1, 2021, the government indicated that it might apply retaliatory tariffs on aluminum imports from the United States. This government action is anticipated to increase domestic output and, as a result, market growth during the anticipated term. The country has witnessed a rise in demand for electric vehicles. During the forecast period, it is anticipated that vehicle production and sales may increase, leading to high market demand for the aluminum parts dies casting market. Hence, with the increasing demand for luxury automobiles, light metal castings, especially aluminum die-casted parts, are anticipated to gain prominence in the region.
North America is the third largest region. Major market players are expected to employ aluminum die casting as a part of their production process due to rising CO2 emissions and the country's ensuing strict CAFE and EPA laws. According to the North America Die Casting Association, over 30 die casting companies in the United States manufacture automobile engine and transmission parts, comprising over 400 individual die casting plants. Some of the top die casting manufacturers in the USA are Alcoa Corporation, Shiloh Industries Inc., Dynacast Inc., Pace industries Inc., Ryobi die casting Inc., Gibbs die casting, and many more. These major players focus on growth strategies, such as expanding and establishing production plants, to gain a competitive edge over other players. Moreover, with over 13 significant automakers based here and an average annual production of 11 million vehicles, the United States is one of the most significant automotive marketplaces in the world. Thus, owing to the aforementioned factors and developments in the United States, the automotive parts aluminum die-casting market is anticipated to witness optimistic growth during the forecast period.
List of top key global automotive parts aluminum die casting market manufacturers