AUTOMOTIVE LED LIGHTING MARKET IN INDIA
- In 2019, the passenger car segment will account for 62% of automotive LED lighting market revenue in India, growing at 11% CAGR, by 2025 its share will shrink to 57% due to growth in revenue from two-wheeler and CV segment and a possible reduction in B-2-B pricing for LED headlamps for passenger cars
- In two-wheeler segment, due to upcoming BS 6 norms, the OEMs had to major changes in overall vehicle design, emission compliance and associated margin. Therefore a significant re-design has resulted in inclusion of light-weight sub-components and energy saving components including LEDs
- The top 3 players accounted for 81% of automotive LED market revenue share in FY 2019,remaining 6 players accounted for just 19%
- Growth in LED penetration will push EBITDA margins of domestic auto lighting suppliers from ~10-11% at present by 150-200 basis points by 2021-2022
Globally, frontal lighting is a key contributor to the overall styling of a vehicle and that`s why LEDs a are getting prominence.However, in India LEDs have gained market volume predominantly in rear and signal lighting.
The Indian automotive consumer has evolved and it wants the best in class features and exterior aesthetics in his vehicle. The super success of Renault Kwid in entry level segment is a testimony to that. The vehicle sold its first 100,000 units in just 4 months of its launch. Styling was a key contributor its success, but it had and still has halogen-reflector setup.
Lighting has always been an ignored feature by OEMs and consumers, not only in India but across the globe. The consumers eventually compare engine specs, comfort and safety features while shortlisting their purchase. Most of the test-drives of new vehicles are also done in day time giving little scope to test the vehicular lighting. OEMs on the other hand prefer the technology which offer them a good mix of price and performance.
This ignorance from both consumers and OEMs has resulted in a huge performance lighting aftermarket which are predominantly marketed as “accessories”. But, with growing emphasis on safety by present Indian government, LED lighting is gaining prominence.
The passenger car market leader Maruti Suzuki with 51% market share, generated 40% of its total sales from rural market in 2018.The average transaction prices for passenger cars and two wheelers in India is~ $10,000-$13,000, and <$1,000 respectively. It is much lower than US and even China, where average transaction price for a passenger car is $33,600 and $18,200 respectively. Since, vehicle prices in India are comparatively lower, most of the vehicles are equipped with basic lighting technology to contain costs.Read our India automotive lighting market report to know more about it.
Some of the major market dynamics are listed below
- The upcoming BS VI norms(enforced from April 2020) and shift towards electric mobility could be a major growth driver for LED lighting market in India as LEDs reduce the load on engine.
- The growth of LED DRLs in both two-wheeler and four-wheeler segment is another driving force behind LEDs.
- There has been a growing use of LEDs in interior and rear lamps by OEMs in multiple segments
- Raw materials constitute almost 70-75% of automotive lighting manufacturing cost. With the growing protectionism policy across the globe, the LED lighting supply chain is bound to be disturbed.
Most of the new passenger vehicles and even face-lift launched in past 18 months already have rear LED tail lamp,LED fog lamps, halogen projector front headlamp setup.But, going forward we believe LED lighting penetration will grow in frontal lighting.
MARKET SIZE AND FORECAST
In India,about 29 Million vehicles (including two wheelers, passenger cars and commercial vehicles) were manufactured in 2018 and halogen accounted for majority of that.
Halogen paired with reflector setup is still the dominant luminary technology for vehicles in India but LED has been steadily gaining ground, especially in two-wheeler segment. HID(Xenon) lights could be only found in some C2 and above segment vehicles. However, there has been a recent shift towards projector setup. The new Swift. Mahindra Marazzo, Mahindra Scorpio, Tata Tigor have projector setup in their higher variants.
In the passenger vehicles segment, LEDs now have a sizable share in rear and signal lighting, but a comparatively lower share in front lighting. The new vehicles in passenger vehicle segment with LED include the likes of 2018 Maruti Suzuki Swift, 2018 Maruti Swift DZire,2019 Maruti Suzuki Baleno 2017 Volkswagen Vento, 2017 Honda City. All in all, LED penetration is growing at a higher pace in C1 segment and above. It is very limited in A and B1 segment which constitutes 27% of annual new car sales.
Honda two-wheelers offering LED lights on some of its best-selling models will be the biggest volume driver for automotive LED lighting market in India. There has been a recent market shift to premium scooters, kick-started by Honda in Q4 2017 when it launched Grazia, followed by TVS and very recently Suzuki.Except TVS Ntorq , all premium scooters have a standard LED frontal lighting.
Developing new automotive lighting technologies is a highly complex process, therefore most of the Indian suppliers have partnerships/technical collaboration with foreign lighting manufacturers.Most of the lighting suppliers in India have their manufacturing plant spread across the country and are typically in closer vicinity of their OEM customers.
Most of the automotive lighting manufacturers in India are foreign manufacturers who have setup partially or wholly owned subsidiary to cater to local demand.
Lumax and Fiem Industries are the market leaders in two-wheeler segment followed by UNO Minda, whereas Lumax and India japan Lighting is a leading provider of LED lighting for passenger cars. Hella India recently forayed in two-wheeler lighting segment in 2016, it was earlier only present in passenger car and commercial vehicle segment.
Lumax has commissioned a new LED manufacturing plant in Sanand, Gujarat to cater to the OEMs in that region. It is the biggest lighting supplier to the passenger car market leader in India, Maruti Suzuki and supplies to almost all automotive OEMs in the country.
Frontal lighting generates highest revenue for all lighting suppliers and it is no different in the case of automotive LED lighting market in India.
THIS REPORT WILL ANSWER THE FOLLOWING QUESTIONS
- The market size (both volume and value) of Automotive LED Lighting Market in India in 2019-2025 and every year in between?
- The impact of upcoming BS VI mandate on Automotive LED Lighting Market
- The evolution of Indian automotive market and consumers
- The market size and forecast segmented by lighting type
- The market size and forecast segmented by vehicle type
- Market share of LED lighting suppliers in passenger vehicles and two wheeler segment
- Future growth plans of automotive lighting manufacturers
- Which sub-component has the highest gross margin?
- Will electric mobility really happen in India?
- Will LED lighting overshadow halogen in short-medium term?
|4||Insights from Industry Stakeholders|
|5||Value chain of automotive LED lighting in India|
|6||All about automotive lighting sub-component suppliers in India|
|7||Upcoming vehicles with LED lighting, by vehicle type|
|8||Impact of upcoming BS VI emission norms on automotive LED lighting market in India|
|9||Key criteria for Automotive lighting vendor selection by OEMs|
|10||Market Segmentation, Dynamics And Forecast By Vehicle Type, 2019-2025|
|11||Market Segmentation, Dynamics And Forecast By Position, 2019-2025|
|12||OEM-supplier relationship in automotive LED lighting market in India|
|14||Market share of major vendors|
|16||Unmet needs and Market Opportunity for suppliers|
|17||5 Key predictions|