Automotive Smart Lighting Market

Market Overview

The global automotive smart lighting market size was valued at USD 4.46 billion in 2022. It is estimated to reach USD 9.59 billion by 2031, growing at a CAGR of 8.89% during the forecast period (2023–2031). The expansion of the global automotive smart lighting market is primarily attributed to the adoption of new technologies like ADAS in the automotive industry. In addition, the surging number of road accidents worldwide has led to growing concern regarding road safety, which has led to the integration of smart lighting systems in automobiles, thereby fostering market expansion.

A motor vehicle has front, rear, side, and, in some cases, top-mounted or integrated lighting and signaling devices. Automotive smart lighting system refers to two types of automotive lighting products, i.e., smart ambient lighting and adaptive headlights. The smart lighting system adapts the vehicle's lights to the ambient light, weather, and road conditions to enhance the driver's perception of safety and reduce stress. Adaptive headlamps are smart headlamps that can adapt automatically to the driving conditions. High Beam Assist aids in avoiding blinding oncoming motorists. Active curve lights rotate the headlamps to illuminate the road around a bend. On the other hand, smart ambient lighting consists of smart interior lights mounted throughout the cabin to improve the design and visibility of the vehicle for both the driver and the passenger.

Market Dynamics

Market Drivers

Growing Adoption of New Technologies

Automakers are increasingly looking for ways to set themselves apart in the competitive automotive business. This is achieved by creating new exterior and interior lighting system design characteristics. New technologies that provide greater adaptability and scalability across various applications and vehicle types enable automotive designers to establish their unique style, appearance, and feel.

The smart lighting manufacturing companies collaborate with other industry participants to provide various ADAS solutions to the automakers. For example, in July 2021, Magna International Inc. announced its intention to acquire Veoneer Inc., a leader in automotive safety technology and a major player in safety technology. With this acquisition, Magna aimed to strengthen and expand its ADAS portfolio and industry position. Therefore, the adoption of new technologies is expected to boost market growth.

Increasing Concerns about Road Safety

Night safety continues to be a major concern for transportation agencies nationwide. Smart lighting has been widely used as a countermeasure to night crashes. Due to lower LED and halogen costs, the demand for such smart lighting systems is expected to increase significantly during the forecast period. According to the American Automobile Association (AAA), smart headlights make nighttime driving safer because they illuminate more of the road without blinding other motorists, as would be the case with high beams.

The study found that ADB headlights are 86% better at offering consistent illumination in the presence of oncoming traffic. Smart headlights are called adaptive driving beam (ADB) headlights, and such technology employs full illumination modified through cameras and sensors that adapt the brightness, shape, and direction of the light depending on the driving conditions. Therefore, incorporating smart lighting systems in the automobile improves road safety, fueling market growth.

Market Restraint

High Cost of Technology 

Trends toward more energy-efficient lighting and high-performance display technologies have recently surged the demand for certain materials, influencing the overall cost of the smart lighting components in vehicles. Even though the market for smart lighting, like adaptive headlights, front lights, taillights, etc., is quickly expanding, one of its primary challenges is the high cost of this product.

An automotive smart light is not a low-cost vehicle component like an adaptive headlamp. For example, on the AAA tested cars, the ADB-compatible headlights cost between USD 3,400 and USD 6,600 more than traditional headlights. Therefore, the high cost of this product is estimated to restrain market growth.

Market Opportunities

Incorporation of AI and ML in Smart Lighting Systems

Smart lighting combined with AI and machine learning has the potential to completely change how automobiles use and communicate with lighting systems. Smart lighting systems employ sophisticated algorithms and sensors to collect and analyze data pertaining to the surrounding environment, travel circumstances, and user inclinations. This data is subsequently utilized to enhance the operation of the lighting system. For instance, machine learning algorithms can analyze sensor and camera data to detect and classify various objects and road conditions and then alter the lighting system's brightness, color, and direction accordingly.

Furthermore, smart lighting systems powered by AI may also include advanced features like facial recognition technology, which can detect the presence of passengers in a vehicle and automatically modify the lighting to their preferences. Moreover, intelligent illumination systems can be integrated with other vehicle-to-vehicle (V2V) communication systems and advanced driver assistance systems (ADAS) to enhance safety and performance further. Therefore, integrating AI and ML in automotive smart lighting systems is expected to create opportunities for market growth.

Regional Analysis

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

The European market for automotive smart lighting is anticipated to exhibit a CAGR of 8.72% during the forecast period. Due to the presence of significant automotive manufacturers and suppliers and the European Union's stringent safety regulations, Europe currently holds the largest share of the global automotive smart lighting market. The European Union government focuses on initiatives like the GEAR 2030 and CARS 2020 Action Plan. Similarly, the European Union's Horizon 2020 program focuses on giving financing for automotive R&D by introducing initiatives such as the European Green Vehicles Initiative and programs on ''Road Transport,'''ICT for Smart Mobility,'' ''Factories of the Future,'' and ''Logistics.'' based on such developments and scenarios, the market studied is expected to witness decent growth over the forecast period. The German automobile sector is also considered the world leader, with industry titans such as Volkswagen, Daimler-Benz, Porsche, and BMW. As a result of the existence of these premium automobile manufacturers, innovative lighting technology is increasing, thereby boosting market growth in the region.

Asia-Pacific is estimated to exhibit a CAGR of 9.41% over the forecast period. The Asia-Pacific region is expected to develop at the fastest rate in the automotive sector due to expanding car demand and a growing tendency toward technical developments. The major factors driving demand for smart lighting equipment are increasing concerns about road safety and government lighting restrictions. Other reasons, such as increased disposable income, improved lifestyle, and increased transportation demand, all contribute to an increase in vehicle manufacturing, which fuels the growth of the automotive lighting industry. Significant investments in R&D and innovation by manufacturers to develop automobile lighting systems compatible with driver assistance systems and proximity sensors will boost market revenue. In addition, the increasing number of road accidents has heightened concerns for vehicle and passenger safety, increasing the demand for automobile lighting solutions. Government and transportation authorities enact stringent regulations to improve road safety and increase market revenue.

North America's automotive smart lighting market is expected to rise thanks to rising demand for luxury vehicles, rising sales and production, rising focus on road safety, and rising desire for comfort and luxury vehicle customization choices. The growing number of accidents and fatalities observed in the USA when driving in the dark is one of the key causes that has led to the development of automotive lighting systems. According to NHTSA data, nearly half of all vehicle fatalities and around 70% of pedestrian fatalities occurred during nighttime driving hours. While metropolitan roads and highways in the USA area have extensive overhead lighting systems, some rural roads are less advanced. The lack of sufficient lighting on rural USA roadways has been a major cause of accidents. As a result, the automotive smart lighting sector will be positively impacted, fostering the target market expansion during the forecast period.

In Latin America, Brazil is the leading revenue contributor. Factors such as the growing demand for SUVs will foster the demand for the automotive smart lighting market owing to the adoption of energy-efficient lights. For instance, in January 2021, Fiat announced various SUV models for the country that would be released in the next years. The Fiat Project 363 B-segment SUV, based on the Argo / Cronos, will be constructed in Brazil and released to the market in the final four months of 2021. SUV sales in the country have surged, which is likely to improve the demand for smart lighting systems because SUVs utilize high-power headlights for off-road visibility. Moreover, the presence of prominent smart lighting suppliers in the Brazilian market, Valeo Group, Stanley Electric Co Ltd, etc., will positively impact the market growth in the country during the forecast period.

Segmental Analysis

The global automotive smart lighting industry is segmented by vehicle type, application type, and technology.

Based on vehicle type, the global market is bifurcated into passenger cars and commercial vehicles. 

The passenger cars segment dominates the global market and is projected to exhibit a CAGR of 8.81% over the forecast period. Automakers are constantly working to enhance the overall driving experience of drivers and passengers. At the same time, good detailing is provided in exterior lighting to provide safety during the night for pedestrians on the roads. Moreover, many automakers are launching new models with an updated lighting system. For instance, in February 2021, Toyota Motor Philippines unveiled the locally manufactured 2021 Innova. It has standard LED headlights, front fog lights, and daytime running lights. Owing to the development and growing number of smart passenger vehicles, the smart lighting market is expected to grow in the following years.

Pick-up trucks, vans, buses, and trucks have been considered in the commercial vehicle segments in the market. Due to the increase in awareness of road safety and the growing demand for commercial vehicles such as light commercial vehicles and pick-up trucks, the automotive smart lighting market is anticipated to grow. Major markets like the United States, Japan, China, and countries across the European Union are witnessing a significant increase in sales of pick-up trucks and vans. For instance, in March 2021, in the United States alone, 965,440 units of light commercial vehicles were sold, 41% higher than the units sold in March 2020.

Based on application type, the global market is divided into interior and exterior lighting. 

The exterior lighting segment is the largest revenue contributor to the market and is expected to exhibit a CAGR of 8.93% throughout the forecast period. The exterior lighting segment of the market includes headlights, fog lights, taillights, daytime running lights (DRLs), and others. Investments in new technology and governments around the world that are making amendments to automotive headlamps to reduce the number of accidents and reduce road fatalities are the driving factors of the exterior segment of the automotive smart lighting market. In November 2019, Transport Canada introduced lighting standards to help vehicles and drivers see well and be seen. By September 2021, the Canadian Vehicle Lighting Regulation will require all new vehicles, including trucks sold in Canada, to have taillights that switch automatically in the dark.

The interior lighting in a vehicle includes ambient lighting, footwell lighting, roof lights, and boot lights. With the growing demand for luxury features inside a vehicle, ambient lighting is expected to grow during the forecast period. This feature employs interior lights mounted throughout the cabin to improve the vehicle's aesthetics. In addition to the footwells, some ambient lighting systems often illuminate the climate control vents, cupholders, door and dash trim, and speaker surrounds.

Based on technology type, the global market is segmented into halogen, Xenon, LED, and other technologies. 

The LED segment owns the highest market share and is estimated to exhibit a CAGR of 10.44% during the forecast period. The majority of carmakers are adopting LED technologies for their vehicles. Luxury cars, sports cars, SUVs, and crossovers have been majorly identified with LED integration in vehicle lighting systems. Moreover, midsize cars have also been increasingly deploying these systems, with the growth in the availability of cost-efficient but highly exterior lighting systems. Hence, this market segment is expected to grow in the following years due to the better or more utilization of LED lights.

Xenon high-intensity-discharge headlights are bulbs, but they are different from halogen lights. These lights use a gas change filled with inert gases like Xenon. Owing to this, they tend to last longer than halogen lights but less than LEDs. Xenon bulbs and headlights are a fairly old technology in the global automotive industry. Another factor that Xenon lights are better than halogen is that they utilize less energy than halogen lights but more energy than LED lights. Another drawback is that they are hotter than LEDs and become dimmer over time. They generate intense white or bluish light, which is often brighter than that of LEDs.

Recent Developments

• July 2023- With the introduction of Eviyos 2.0, ams Osram introduced a revolutionary advance in automotive forward lighting. This intelligent multipixel LED raises the bar for headlight operation and image projection, enabling entirely adaptive and dynamic lighting for vehicles with image projection.
• July 2023- Marelli and ams OSRAM introduced a revolutionary advancement in automotive front lighting. The system, known as an h-Digi microLED module, based on a new type of intelligent multipixel LED, is digital, designed to be a cost-effective technology, and compatible with various vehicles.