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.
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.
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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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