AUTOMOTIVE EXHAUST SYSTEMS MARKET KEY INSIGHTS:

The Automotive Exhaust Systems Market Size was valued at USD 59.52 Billion in 2023 and is expected to reach USD 104.96 Billion by 2032 and grow at a CAGR of 6.53% over the forecast period 2024-2032.

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Automotive Exhaust Systems has gained importance in the automotive sector, by acting as a crucial part of emission control in vehicles while maintaining compliance with environmental standards across the world. As governments worldwide step up their emissions regulations, manufacturers are keen to put into practice more sophisticated exhausts that not only adhere to new norms but also improve performance and fuel efficiency for vehicles.

The Environmental Protection Agency (EPA) is the primary market influencer that sets and enforces emission standards in the U.S. market through the National Ambient Air Quality Standards (NAAQS) under Clean Air Act. With the Tier 3 EPA legislation, NOx and particulate matter are the most limiting factors to date and thus eliminate the choice of auto manufacturers not to equip their cars with catalytic converters, DPFs, and even more advanced exhaust technologies. The Corporate Average Fuel Economy regulations also drive for more efficient exhaust systems by compelling the manufacturers to produce more fuel-efficient vehicles, which also require optimized exhaust configurations in order to achieve reduced emissions.

The latest exhaust system technologies focus on making it lighter and more efficient in reducing the broadest spectrum of emissions. With SCR technology being widely accepted for diesel vehicles, NOx emission reductions are considerable. The other developments involve harvesting heat from exhaust gases by utilizing the thermoelectric effect and converting them into electrical energy to boost the efficiency of vehicles. Another variant of exhaust systems is the active exhaust systems, where it can change the flow of exhaust gases according to driving conditions. This enhances vehicle performance but has minimal emissions.

In the future, the automotive exhaust systems market will be transformed as electric vehicles (EVs) and hybrid systems start to pile up. As EVs progress higher in the market share, the requirements of traditional exhaust systems begin to depreciate. However, hybrid vehicles will continue to require advanced exhaust solutions to comply with the emission norms and will offer more opportunities for manufacturers to design more sophisticated systems specifically for hybrid engines. There will also be scopes to design exhaust systems more efficiently in the light of advanced lightweight materials and thermal management techniques.

MARKET DYNAMICS

KEY DRIVERS:  

• Stringent government regulations based on the levels of pollutants are producing cleaner emission-based exhaust system development.

Regulatory measures are now undertaken by example in some strict emission standards: Euro 6d in Europe and EPA's Tier 3, respectively, in the U.S., setting a decrease in pollutants like NOx by 70-80% and particulate matter more than 50% from vehicle exhausts. The US EPA has implemented a standard such that, by 2030, the average emissions from vehicles need to be minimized by 37%. This has made it highly necessary to use such advanced exhaust technologies as Selective Catalytic Reduction (SCR) and Gasoline Particulate Filters (GPF). Furthermore, China 6 standards have lowered the NOx emission limit by 55% and PM by 40%. Even there, further intensity was required when exhaust systems were concerned. Automakers constantly upgrade the exhaust technologies to comply with these rules and this leads to the increase in demand.

• With an increased worldwide automotive production the requirements of the exhaust system increases.

Even though governments around the globe have designated that this is the last decade for electric vehicles, the best-selling vehicles in the world are powered by internal combustion engines (ICEs), and it is estimated that they will continue to be in over 75% of all vehicles sold globally in 2023. Global passenger car production is expected to continue to expand at close to 4% per year through 2030, mainly in emerging markets like India and Brazil, which increased 6-8% during the previous two years.

Given that modern vehicles are manufactured with exhaust systems in place to meet emission norms, increased production of vehicles is leading to increased demands for systems that meet not only local standards but also international standards. For example, Asia Pacific is likely to account for almost half of the total vehicle production in the world, and the demand for exhaust systems is expected to rise proportionally with increased manufacturing.

RESTRAIN:

• Growing use of electric vehicles is limiting demand for conventional exhausts.

Electric vehicles do not have an internal combustion engine, hence will not have a typical exhaust system. According to the International Energy Agency,  global EV stock stood at over 10 million units on 2022. This trend is bound to continue on an exponential curve as governments all over the world are going for ambitious plans to reduce greenhouse gas emissions.

For example, the European Union agreed to reduce carbon emissions on new cars by 100% by 2035. In the U.S., 50% of the sale of all new vehicles will come from electric cars by 2030, whereas China targets to have 40% of new energy vehicles, including EVs, sold by the same year. Increasing EV adoption will make demand for traditional exhaust systems considerably go down. Manufacturers are under tremendous pressure to find diversifications in their product portfolio, or even shift their product lines into other new technologies like hydrogen and hybrid powertrains which still need an exhaust system.

KEY SEGMENTATION ANALYSIS

BY COMPONENT

The most dominant in 2023 was the Exhaust Manifold with 36% market share. The exhaust manifold is a critical part through which exhaust gases are collected from several cylinders and sent to the exhaust pipe. It essentially creates optimal exhaust flow that reduces emissions, hence its wide use in passenger cars and commercial vehicles gain it market share.

The Muffler Market will grow at a tremendous pace in the coming years from 2024 to 2032 with a projected CAGR of 8.73%. Mufflers play a vital role in reducing the noise produced by exhaust gases, and they are even being designed to be light and efficient. Due to this, vehicle manufacturers are focusing on the overall performance and comfort of the vehicle. This will enhance the demand for advanced mufflers that provide noise cancelling hugely.

BY VEHICLE TYPE

Passenger cars occupy the large share of the market, as high volumes of such vehicles are produced and sold globally, especially in regions like Asia Pacific and North America. Passenger cars are the dominant mode of transport in both developed and developing countries, so exhaust systems which can be made with progressively more stringent emission limits being called for are in demand.

Light Commercial Vehicles are likely to advance the most during the forecast period at a CAGR of 7.62% during 2024-2032. Increased E-Commerce with more last-mile deliveries and use cases like construction and utilities have put a spotlight on Light Commercial Vehicles, especially in urban regions where emission control regulations are steeped high. Thus, LCV makers are moving towards sophisticated exhaust systems that meet stringent emission regulations while being as fuel efficient as possible. HCVs, though a small part, are indeed a crucial part of the market especially for exhaust systems with the assistance of DPF and SCR technologies in the emission reduction mechanism of big diesel engines.

REGIONAL ANALYSIS

Asia-Pacific had led the Automotive Exhaust Systems Market share in the year 2023 with 59%. Thus, the significant reason for the dominance of this is the extremely high vehicle production countries like China, Japan, and India. The trio together contributes the majority share of global vehicle manufacturing. More so, China is the country with the largest producer and consumer of automobiles, thus driving the demand for exhaust systems in the entire region. In addition, tight government regulations on reducing vehicular emissions, like the China 6 standards, have forced the manufacturers to look for the exhaust technologies as well.

The Asia Pacific region will see the highest growth with a CAGR of 6.95% in the forecast period from 2024 to 2032 due to the rapid urbanization of the region and growing disposable income and vehicle ownership. Apart from this, Japanese and South Korean consumers are also increasingly interested in hybrid vehicles. Therefore, much greater demand for more efficient exhaust systems that meet future emission standards can be expected.

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KEY PLAYERS 

Some of the major players in the Automotive Exhaust Systems Market are  

• Tenneco (Clean Air Solutions, Exhaust Manifolds)

• Faurecia (Exhaust Control Systems, Catalytic Converters)

• Magneti Marelli (Exhaust Modules, Noise Control Systems)

• Bosal (Diesel Particulate Filters, Mufflers)

• Eberspächer (Exhaust Systems, Thermal Management Solutions)

• Futaba Industrial (Exhaust Manifolds, Catalytic Converters)

• Benteler (Exhaust Pipe Systems, Heat Shields)

• Sango Co. (Exhaust Manifolds, Catalytic Converters)

• Sejong Industrial (Mufflers, Catalytic Converters)

• Yutaka Giken (Exhaust Manifolds, Mufflers)

• Katcon (Exhaust Manifolds, Catalytic Converters)

• Purem Aapico (Exhaust Systems)

• Boysen Group (Exhaust Pipes, Mufflers)

• Harbin Airui Automotive (Mufflers, Exhaust Pipes)

• Dinex (Emission Control Systems, Catalytic Converters)

• AP Emissions (Mufflers, Catalytic Converters)

• Schmidt Automotive (Exhaust Pipe Systems, Manifolds)

• SMI Manufacturing (Mufflers, Exhaust Pipes)

• Friedrichs Exhaust Systems (Mufflers, Catalytic Converters)

• Calsonic Kansei (Exhaust Systems, Heat Exchangers)

MAJOR SUPPLIERS

• Thyssenkrupp AG (Steel components)

• ArcelorMittal (High-strength steel)

• BASF (Catalytic materials)

• 3M (Heat shields, adhesives)

• Nippon Steel (Specialty steel)

• Sumitomo Electric (Wiring components for exhaust sensors)

• Honeywell International (Turbochargers)

• Dow Inc. (Heat-resistant coatings)

• NGK Insulators (Ceramic substrates for catalytic converters)

• Johnson Matthey (Catalyst technology)

MAJOR CLIENTS

• Ford Motor Company

• General Motors

• Toyota Motor Corporation

• Volkswagen Group

• BMW

• Daimler AG

• Honda Motor Co. Ltd.

• Hyundai Motor Company

• Nissan Motor Co. Ltd.

• Fiat Chrysler Automobiles (Stellantis)

RECENT TRENDS

• January 2024: Purem by Eberspaecher is expanding its portfolio with solutions for a "clean future," particularly in the booming hydrogen sector. As a result of the strategic partnership between the exhaust specialist and Topsoe, the companies have now focused on this source of energy. According to sources, the flow control and corrosion-mediates-handling know-how from Purem by Eberspaecher were said to support Topsoe in producing high-efficient electrolysers.

• November 2023: The Purem AAPICO, a joint venture between Purem and AAPICO Hitech Public Company Limited, today marked an important milestone with the official opening of the company's first Malaysian plant. Dedicated to passenger car exhaust systems for clean and efficient mobility, the plant supports the continually growing demand in the ASEAN region.