Vehicle Sealing: Shift from Being a USP to an MVP
The dawn of connected vehicles, autonomous vehicles, and electric cars is proportionally reinforcing developments in the automotive windows and exterior sealing market. The specific force heralding the high sales of automotive windows and exterior sealing is their short lifespan, which demands frequent replacement. Since ‘comfort’ is no longer a USP, but a viable feature in the automotive industry, carmakers are dedicating their efforts toward the development of vehicles that take the experience of the driver to the next level. This, in turn, has been creating opportunities for the manufacturers of automotive windows and exterior sealing, to offer qualitative sealing that offers protection against weather extremities and external noise.
The pursuit of carmakers to enhance the operational performance of vehicles is also leading to a cash influx in the landscape, since these components protect the interior of vehicles from dust, dirt, and other environmental impurities. However, authors of the report highlight some influential impeders that are likely to act as a throttle to the growth of the automotive windows and exterior sealing market.
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Volatility in Prices of Raw Materials to Squeeze Manufacturers’ Profitability
The report identifies volatility in the prices of rubber as a crucial challenge that is putting the profitability of market players at stake. To put this into perspective, the low production of natural rubber coupled with vagary trade implications has engendered synthetic rubbers. However, synthetic rubber is manufactured using raw materials such as refining oil, coal, and other hydrocarbons, whose prices are directly associated to oil prices.
Besides the use of raw materials that are affected by frequent fluctuations in their prices, every variant of rubber comprises different chemicals, which further demands skilled labor for the manufacturing of vehicle sealing. In addition, the manufacturing of synthetic rubber is seen as complex and cost-intensive, as it requires a manufacturing setup with proper equipment to process various chemicals. Collectively, variability in raw material prices and cost-prohibitive manufacturing process is projected to exert an influence, in terms of fluctuation, on the cost of automotive windows and exterior sealing.
Glass Run Channel to Remain Component of Choice
The glass run channel holds a dominant share in the automotive windows and exterior sealing market, which is estimated to equal ~23%, among other vehicle sealing components. The key indicator of the marginal rise in the sales of these components is the increasing demand from carmakers for the production of SUVs. Since SUVs have larger glass frames and windshields, they require high protection from external wear and tear, thereby leading to the high adoption of glass run channels.
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Manufacturers strive to distinguish their glass run channels by focusing on coating materials, which offers a smooth finish to the surface of glass. To add to that, glass run channels are manufactured with cuts on their entire length, coupled with slits and water drain holes, to meet the standard as well as custom requirements of carmakers.
Why Developing Countries of Asia Pacific Hold High RoI Potential
Among other regions, the TMR study finds that, Asia Pacific holds promising opportunities for the automotive windows and exterior sealing market. Automakers in Europe and North America are encountering immense pricing pressures in terms of labor cost and operational cost. To weaken this influence, manufacturers operating in these developed countries are looking at Asia Pacific in general, and countries such as China, Japan, and India, in particular, for outsourcing services for the production of vehicles sealing and increasing their profitability.
The scramble of developed countries also remains underpinned by the recent relaxation in foreign direct investments (FDI) in the automotive industry, thereby increasing the prominence of Asia Pacific in the landscape. Sensing the success of outsourcing, manufacturers operating in this region are amplifying their focus on the quality of their products, and are striving to secure quality certifications such as QOS and ISO from central authorities.
Yet another factor driving the demand for vehicle sealing can be attributable to Asia Pacific’s status of being the region with the largest number of vehicles in the world. With a large number of vehicles, the need to replace sealing is high, which is likely to offer high returns to manufacturers.
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Automotive Windows and Exterior Sealing Market – Overview
- The automotive windows and exterior sealing market is driven by the increasing demand for vehicles. The production of vehicles has been increasing at a CAGR of ~4% over the last decade, which, in turn, is projected to boost the automotive windows and exterior sealing market at a CAGR of ~4% between 2019 and 2027.
- In terms of component, the glass run channel segment holds a prominent share of the global automotive windows and exterior sealing market. It is likely to gain market share, as glass run channels are an essential sealing components to protect the windows and interiors of vehicles from external noise, dirt, and rainwater.
- Based on vehicle, the passenger vehicles segment held a notable share of the global automotive windows and exterior sealing market in 2018, as the segment comprises hatchbacks, sedans, and utility vehicles. The demand for utility vehicles is increasing in key regions such as the Middle East and Africa, Europe, and Latin America.
- In terms of sales channel, the aftermarket segment is anticipated expand significantly during the forecast period, owing to the continuous replacement of windows and exterior sealing as recommended by several associations and vehicle manufacturers.
Drivers of Global Automotive Windows and Exterior Sealing Market
- The global automotive windows and exterior sealing market is expanding at a consistent pace, owing to rising vehicle production and the increasing stringency of norms related to the compulsory replacement of windows and exterior sealing by major OEMs.
- Increasing production/ sales of vehicles is boosting the market for windows and exterior sealing at a rapid pace, as the demand for windows and exterior sealing depends on vehicle production and sales. Global vehicle production surpassed 95 million units in 2018. The production and sales of automobiles have increased, as both, developing and mature markets have been witnessing high demand for vehicles, which, in turn, drives the production volumes of auto component manufacturers.
- Economic balance and greater access to financing options in developed regions have led to a revival in the purchases of new cars. Meanwhile, rapid economic growth in developing countries has prompted middle-class consumers to invest in SUVs and passenger cars. These factors, cumulatively, have significantly boosted the demand from OEMs that assemble components into new vehicles.
- The development of intelligent windows is likely to drive the automotive windows and exterior sealing market. Automotive window manufacturers have been working on the development of smart and intelligent windows. These windows enable the transformation of the glass from transparent to opaque with the help of an electric current. This involves the utilization of a combination of liquid crystal, electro-chromatic, and suspended particle technologies. Rise in the popularity of intelligent windows is projected to boost the demand for windows and exterior sealing.
Challenges for Global Automotive Windows and Exterior Sealing Market
- The prices of rubber are highly volatile in several regions, which restrains the demand and production of windows and exterior sealing for vehicles.
- The manufacturing of windows and exterior sealing requires precision and accuracy as per specific vehicle model, which makes the manufacturing of automotive windows and exterior sealing highly critical. This, in turn, is likely to restrain the global automotive windows and exterior sealing
Global Automotive Windows and Exterior Sealing Market: Key Segments
- Based on component, the glass run channel segment is expected to hold a major share of the global automotive windows and exterior sealing market, owing to the compulsory usage and higher price of glass run channels in every vehicle. The door segment held the second-largest share of the market in 2018, owing to the common usage of door sealing in all types of vehicles.
- Based on vehicle, the passenger vehicles segment is estimated to be a highly prominent segment of the global automotive windows and exterior sealing market. The passenger vehicles segment has been sub-divided into hatchbacks, sedans, and SUVs. Increasing demand for premium vehicles is likely to boost the sedan sub-segment in the automotive windows and exterior sealing market. Significant growth rate witnessed by the light commercial vehicles segment is attributed to the rise in industrialization and expansion of SME businesses.
- The high demand for light commercial vehicles and heavy commercial vehicles is also driving the automotive windows and exterior sealing market.
- Based on sales channel, the aftermarket segment held a significant share of the global automotive windows and exterior sealing market, owing to the regular replacement of sealing in developed countries and those that experience high temperatures. In developed countries, the replacement of automotive windows and exterior sealing takes place for 2 to 3 times in the entire lifespan of the vehicle.
Global Automotive Windows and Exterior Sealing Market: Regional Analysis
- In terms of region, Asia Pacific held a leading share of the global automotive windows and exterior sealing market, as more number of vehicles are produced in the prominent countries in the region, including China and Japan, and lower manufacturing and labor cost in the region.
- The significant market share held by Asia Pacific in 2018 is attributed to the expansion of the automobile industry in India and countries in ASEAN, owing to an increase in the demand for vehicles due to rising per capita income.
- Moreover, the abundant availability of natural rubber in the region, coupled with the rising number of local manufacturers is likely to boost the automotive windows and exterior sealing market in the region during the forecast period.
Global Automotive Windows and Exterior Sealing Market: Competition Landscape
- Key players operating in the global automotive windows and exterior sealing market are
- Cooper-Standard Holdings, Inc.
- Henniges Automotive Holdings Inc.
- Hutchinson SA
- Lauren International Ltd.
- Magna International Inc.
- Minth Group Ltd.
- PPAP Automotive Ltd.
- Rehau Automotive S.R.O.
- Saar Gummi Czech S.R.O.
- Standard Profil AS
- Toyoda Gosei Co., Ltd.
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