The Automotive Gaskets and Seals Market is expected to register a CAGR of over 5.5 % during the forecast period.
- The growth of the market studied depends on various factors, such as adoption rate of electric vehicles in developing nations, increasing electric vehicle infrastructure trends in developed nations, variation in raw material prices, etc. Additionally, impact of tariff rates among the United States, Europe, and China for automotive components may also contribute to the demand for gaskets and seals.
- Manufacturers of gaskets and seals have been conducting R&D activities, to develop special types of gaskets and seals, for the expected rise in demand for IC engine vehicles and battery electric vehicles. European firms, like Freudenberg, have already patented few automotive seals in 2017 to be ahead in the competition.
- Some of the manufacturers in the market include Freudenberg, Dana Incorporated, Federal Mogul, SKF GmbH, ElringKlinger AG, etc. As China dominates the electric vehicle sales, local manufacturers, such as Kunshan Sanwa Engine Parts Industry Co. Ltd have been catering the necessary cylinder head and exhaust manifold gaskets to majority of the vehicles sold in the country, since 2016.
Key Market Trends
Growing Demand for Electric Vehicles to Drive the Market
With the rising environmental and health concerns among both the governments and consumers, the demand for, and usage of, electric vehicles is gradually increasing, especially in countries, such as China, the United States, the United Kingdom, Nordic countries, and others.
- Increase in the production of electric vehicles is primarily driven by the initiatives taken by several governments toward zero-emission and eco-friendly vehicles, as well as growing consumer awareness.
- Governments play a vital role in the promotion of electric vehicles, by providing subsidies and formulating less stringent regulations for supporting the production of electric vehicles.
The world is quickly adopting to electric vehicles (EV) and in the next couple of decades, EVs are expected to be more mainstream than internal combustion vehicles. More automotive manufacturers are now devoting a major chunk of their investments toward the R&D of electric vehicles.
Countries, such as China and the United States, are continually taking steps in the form of rebates and tax incentives, for increasing the demand for, and adoption of, electric vehicles.
- For instance, the Government of China has been consistently trying to increase the sale of electric vehicles through incentives and mandates for automakers, developers of autonomous vehicle technologies, and ride-hailing service companies.
- The Ministry of Industry and Information Technology in China has an agenda to ban all the internal combustion engines (ICEs) from the roads, owing to the growing pollution issue.
- The government has not announced a date for the final ban, but Xin Guobin, the Vice Minister for the Industry and Information Technology, proposed initial targets that vehicles with electric and hybrid engines, may account for 8% of new car sales in 2018, 12% in 2020, and 20% by 2025.
The demand for transmission, steering, and battery-based automotive seals, is catered by domestic companies operating in the country, such as Kunshan Sanwa, Guangzhou Leakless Automobile Parts Co. Ltd, etc.
Asia-Pacific and North America to Dominate the Market
Over the last decade, the Asia-Pacific automotive industry has undergone the most significant transformation in its history. The market is recording an increasing share of global vehicle sales. Another major factor driving the growth of the automotive gasket and seals market is increased production and sales of electric vehicles in the region. It is the only major market expected to see continued strong growth in, both, the medium and long-term.
North America and Europe are also expected to hold a significant share in the global automotive gasket and seal market. The automotive commercial vehicle demand is growing in the United States, in 2018, the demand for commercial vehicles in the country has increased by 8.08%, which is a key factor for propelling the demand of gaskets and seals market in the country.
- The United States is the second-largest market for electric vehicles in the world.
- The government plays an important role in developing and deploying electric vehicles in the country.
- Financial incentives, including tax credits and tax exemptions, are major tools for decreasing the upfront costs of EVs and encouraging the adoption of these vehicles.
- For instance, the US federal government has initiated a tax credit for plug-in electric vehicles (PEVs) purchased after December 31, 2009. The tax credit ranges from USD 2,500 to USD 7,500 for each vehicle, based on its battery capacity and gross vehicle weight rating (a vehicle's maximum weight, including cargo and passengers).
The Automotive Gaskets and Seal market is a highly fragmented market. Some of the major players in the market are Freudenberg Group, SKF Group, Dana Incorporated, Elringklinger AG, Jayem Auto Industries, Kunshan Sanwa Engine Parts Industry, amongst others.
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