Market Trends of Gigacasting Industry
Body Assemblies Hold Major Market Share
Body assemblies are an integral component of any vehicle that requires the employment of efficient casting techniques. Increasing passenger car production worldwide to cater to the rising consumer demand, coupled with expanding e-commerce and road freight sector, serve as major determinants for the growth of this segment.
The increasing use of aluminum gigacasting modules and structural parts is mainly due to the necessity of preventing the constant rise in vehicle weight, improving fuel efficiency, and meeting the growing demand for battery electric vehicles. Gigacasting can reduce per-unit manufacturing costs by eliminating the welding of numerous body parts and replacing them with a single-cast module.
According to the European Automobile Manufacturers’ Association (ACEA), in July 2023, new car registrations across the European Union reached 851,156 units compared to 739,135 units in July 2022, representing a Y-o-Y growth of 15.1% between July 2022 and July 2023.
According to the International Organization of Motor Vehicle Manufacturers (OICA), new light commercial production worldwide touched 19.8 million units in 2022 compared to 18.6 million units in 2021, recording a Y-o-Y growth of 7% between 2021 and 2022.
With the expanding commercial and passenger vehicle market, there exists a massive demand for advanced and lightweight door frames, roof panels, etc., which, in turn, positively impacts the surging demand for this segment.
Many vehicle manufacturers are using the gigacasting process to improve the production of passenger cars. This is expected to result in significant growth in the industry in the coming years. For example, Tesla has already adopted gigacasting at its factories in the United States, China, and Germany. Tesla's Model Y uses two massive gigacastings as the front and rear underbody, revolutionizing traditional car body design and streamlining manufacturing.
With the abovementioned development across the world, body assemblies are expected to witness significant demand in the coming years.
Asia-Pacific Witnessing Significant Growth
China is the world’s leading exporter of aluminum and aluminum products. It holds a significant position among the world’s largest suppliers of automotive parts, exporting motor vehicle parts and accessories.
The growth of lightweight parts may continue to increase during the forecast period to meet the growing demand for lightweight components and high-conductivity metal parts from the automotive sectors.
Electric vehicle production has seen exponential growth in past years, which is an evident sign of consumer demand and is likely to supplement the demand for automotive parts in the gigacasting market. However, the rising electric vehicle market in China has prompted automakers to recognize that the electric vehicle trend is irresistible. Therefore, they have abandoned their initial policies and announced plans for electric vehicle models and new factories. For instance, in September 2023, Tesla used gigacasting technology to reduce component costs in Model Y production at its Shanghai factory.
A major factor contributing to the proliferation of the Japanese market is the continuous emphasis on vehicle weight reduction to enhance fuel efficiency and reduce emissions. As automobile manufacturers strive to meet strict environmental regulations, gigacasting components, known for their strength-to-weight ratio, become integral in achieving these goals.
The growing trend toward electric vehicles (EVs) has further propelled the demand for gigacasting components, given the need for lightweight structures to maximize battery efficiency.
By 2050, Japan plans to implement a “Well-to-Wheel Zero Emission” policy to eliminate emissions by focusing on energy supply and vehicle innovation. Replacing all traditional vehicles with electric vehicles can reduce the emission of greenhouse gases by around 80% per vehicle, including an approximate 90% reduction per passenger vehicle.
Based on the abovementioned points, the demand for gigacasting components across the region is likely to grow in the coming years.
