Market Trends of Automotive Foam Industry
Interior Applications to Dominate the Market
- In interior applications, automotive foams are mainly used for dashboards, chassis components, cable sheathing, headrests, steering wheels, gear knobs, seats, bumpers and door trims, and others.
- For these applications, polyurethane foam is the most used foam worldwide. This foam provides benefits like insulation properties, cushioning, window encapsulation, and acoustical properties.
- As these foams are lightweight, they help in reducing the total weight of the car, which can improve fuel efficiency and reduce emissions. By providing acoustical insulation properties, these foams help in reducing noise levels inside the car, making the car more pleasurable to drive. Hence, polyurethane foams have gained popularity amongst manufacturers for various interior applications in ICEs and EVs.
- According to the International Organization of Motor Vehicle Manufacturers (OICA), in the year 2022, the production of vehicles increased globally by 6% with a total of 85.01 units manufactured as compared to the previois year. Hence, such trends are likely to increase the demand for foams to reduce the weight of vehicles and increase efficiency.
- According to EV Volumes, in the year 2022, the total sales of Battery Electric Vehicles (BEVs) and plug-in Hybrid Electric Vehicles (PHEVs) were 10.5 million worldwide, registering a growth of 60% as compared with the previous year.
- According to the International Energy Agency (IEA), global electric vehicle sales are expected to reach 125 million in 2030, as per the New Policies Scenario (excluding two/three-wheelers).
- Hence, such trends in the automotive industry are likely to increase the demand for foams used in interior applications over the forecast period.
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Asia-Pacific Region to Dominate the Market
- Asia-Pacific region dominates the global market for automotive foams owing to the growing polyurethane consumption in countries such as China, India, and ASEAN Countries.
- According to the China Association of Automobile Manufacturers (CAAM), Chinese carmakers produced 27.02 million units in 2022, up by 3.4% Y-o-Y compared to 26.09 million units in 2021, while sales rose by 2.1% to 26.86 million units.
- Further, China is the biggest market for electric vehicles in the world. According to the China Association of Automobile Manufacturers (CAAM), in February 2023, the production of BEVs and PHEVs was 552 thousand while in the month of January, it was 425 thousand registering a growth of 30% which is likely to drive the market growth for automotive foams.
- India is also home to some of the world's largest automakers. According to the Indian Brand Equity Foundation (IBEF), the Indian passenger car market is expected to reach USD 54.84 billion by 2027 while registering a CAGR of over 9% between 2022-27.
- According to OICA, the total production of vehicles in the country in the year 2022 was 5.45 million units while in the year 2021, it was 4.39 million units registering a growth of 24% year-on-year.
- Hence, such trends in the automotive industry in the region is expected to drive the market for automotive foams during the forecast period.
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