AUTOMOTIVE LED LIGHTING MARKET

KEY FINDINGS

  • LED headlamps are and will remain the biggest revenue generating segment(~60%) in global automotive LED lighting market 
  • Due to the simplicity in implementation of LEDs in design, and lower price compared to headlights, more OEMs have introduced LEDs in the tail lamps
  • China is world`s biggest LED lighting market,among the top 50 selling cars, LEDs penetration was 63.8%, the second highest for any major region in the world,tail map penetration was even higher at 77.6%
  • India remains highly under-penetrated till now as many sub-components were outsourced from International vendors.But,the average B-2-B prices are expected to slightly decrease linearly in the coming years due to increase of LED penetration and In house production of PCBs from top 3 auto lighting vendors
  • High range MPVs and SUVs have LEDs for various lighting purposes such as reading lamps, glove-box lamps,map lamps, trunk lamps and ambient lighting. An important growth driver for the market
  • Almost all lighting suppliers are facing the dual impact of declining revenue and increased R&D investment to meet next-gen headlamps requirement. Growing sales of high value- add products like Adaptive driving beams/ Software based Matrix LEDs are profitability drivers
  • Stanley Electric was the most profitable company in 2019 in terms of Operating margin  i.e. ~14% followed by Koito at 12.2%

 

 

Info Graphic: automotive exterior led lighting market,led fog lamp market,vehicle led lighting market,automotive interior led lighting market

 

 

MARKET SEGMENTATION

Infographic : Automotive LED Lighting Market, Automotive LED headlight market

 

 

AUTOMOTIVE LED LIGHTING MARKET TRENDS

  1. In Europe,budget hatchback from Fiat, Renault and PSA cars had low penetration for LED lighting technology
  2. In premium segment,all round(100%) LED lighting has become a trend now. Almost all OEMs have adopted LEDs, HID in frontal lighting is gradually being phased out and LED headlights have been the #1 trend since 2014
  3. In China,Top 20 selling premium cars are provided with LED (headlights, taillights, DRLs, and Ambient light) as standard 
  4. Premium cars like BMW ( X7, 7-series, X5 ), Audi A8L are provided with laser headlights on top variants as standard and lower variants get it as an Option in China
  5. At present, LEDs usage on two wheelers are primarily aimed at improving aesthetic, styling and less to do with the improved luminance. So, we believe LEDs on two-wheelers are a premium product and offer immense value add to the consumers.2019 has not been a good year for  two-wheeler LED growth but post 2020-21, further growth in penetration is expected
  6. In US, custom LED headlights are available in the Freightliner`s medium-duty trucks as a factory-installed option on new Freightliner M2 models 106 and 112, as well as on Thomas Built C2 bus
  7. In Electric vehicle segment, which sold 2.2 Million vehicles in 2019 and  2.2 Million units in 2018, LED lighting penetration was more than 40%. Tesla has 100% LED lighting on all vehicles
  8. Many suppliers are now investing in PCB tooling locally to reduce their cost and improve margins. Gross margin on LED lighting is substantially higher than halogen lighting
  9. In L4-L5 Autonomous vehicles, the LEDs can be embedded in various interior and exterior parts like doors, seats, glass etc, which will provide information on road environment to riders whose attention will be focused on all other activities except driving. 
  10. In Japan, top 30 selling vehicles are provided with LED (DRLs) as standard and 90% of the vehicles get LED fog lights as standard. 

 

 

To know more trends from a supplier point of view, Please read our article Top 7 Automotive Lighting Trends

 

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NEW PRODUCT DEVELOPMENT IN AUTOMOTIVE LED LIGHTING MARKET

BY SUPPLIER

  • Koito– The global market leader has integrated LiDAR (Light Detection and Ranging) sensors into headlamps and rear combination lamps. The smart all-round lighting helps detect pedestrians and traffic from all angles, further improving safety. It has also developed a similar ADAS integrated headlamp solution for two-wheelers
  • In Sep 2019, it announced that it had commercialized Bladscan ADB. The Bladescan ADB emits LED light to 2 fast-revolving blade mirrors (reflectors) and lights forward vision by using the residual image effect. It will be fitted on Lexus RX. Lexus was also the first customer of Koito`s first mass produced LED headlights in 2007.
  • Hella-  In Nov 2019, the European leader in premium LED light manufacturing announced  a new lighting system with high resolution.  More than 30,000 pixels can be controlled intelligently and individually
  • Osram-Continental– In July 2019, the JV showcased powerful laser LED headlight system with more than 4,000 individually controllable pixels 

 

BY OEM

  • The new generation of Volkswagen Golf Alltrack uses five-point LED fog lights
  • Nissan in its newly introduced logo, has used 20 LEDs to lit up the logo unveiled in July 2020. Nissan’s all Electric Crossover Ariya will be the first vehicle to feature the new logo
  • Chery’s upcoming model Tiggo 8 Plus, is equipped with all LED headlights. The light group integrates LED crystal headlights, double-blade high-bright daytime running lights, and running water turn signals
  • WEY’s upcoming vehicle Tank 300 was unveiled with full LED round headlights and horizontal DRLs running along these headlights

 

AUTOMOTIVE LED LIGHTING MARKET SIZE AND FORECAST

In China, where 1,825 vehicle models are on sale as of Sep 2020, HID frontal lighting is now offered only on 45 models as compared to 400+ just 2 years ago. LED frontal lighting has grown by more than 25% in 2017-2019 period.

 

Info Graphic: Automotive LED Lighting Market

 

LEDs are priced at 3x-4X higher than conventional halogen based lighting.Although LEDs are growing at a faster rate, majority of the automotive lighting is still halogen based  in emerging markets due to cost reasons.

 

The automotive LED lighting market will be a ~$32 Billion opportunity by 2025. Growth in market value will be slightly higher than market volume because of consistent innovation in headlamp technology and adoption of OLED in top 3 markets.

 

 

REGIONAL AUTOMOTIVE LED LIGHTING MARKET TRENDS

In Europe automotive lighting market, PSA group is the second biggest player.Peugeot 208 was the top selling model in 2019 and the car was equipped with LED head lamps and tail lamps. All of the Peugeot top selling vehicles 3008, 2008 and 308 were equipped with LED tail lamps Citroen`s most sold vehicles such as C3 and C1 were only fitted with halogen headlamps, but were equipped with LED tail lamps.

 

In China automotive lighting market,China had 19% penetration LED fog lights in 2019 and it is estimated to reach 32-35% by 2025.Among top selling models in the country, Chinese OEMs like BAIC, Changan and Great Wall Motors had a sizable penetration of LED lighting in their models, whereas the SAIC group had comparatively lower penetration of LED lighting in its models.

 

In US automotive lighting market, LED cargo lamps and Security approach lamps saw a penetration of 11.1% and 21% among top selling models contributing to the high volume and average B-2-B prices in the country.The country also witnessed a 5.5% penetration of HID headlamps among top selling vehicles, mostly high performance SUVs and pickups.

 

In Japan Automotive lighting market,among the top sellers in 2019 combination LED tail lamp penetration was 46.5%- highest for any region.Japan also had highest penetration of LED headlamps and tail lamps than any other region in the world.

 

In India automotive lighting market, 2019 witnessed an annual sales of more than 2.93 million passenger vehicles, and LED penetration was under 50% for both front and rear lighting.Maruti Suzuki Swift, Baleno and HMSI Activa 5G are the top three best-selling vehicles in India fitted with LED lights. Tata Motors has adopted LEDs in tail and indicator lighting in Tigor, Nexon, Hexa and Harrier.

 

OE-SUPPLIER ALIGNMENT IN AUTOMOTIVE LED LIGHTING MARKET

Koito and Stanley are the leading lighting suppliers in passenger LED market supplying to top two Japanese OEMs.In 2019, Varroc was awarded its first project from Hyundai in Turkey, to work on “Garnish Lamp” on “i20” vehicle. And in June 2020, they were awarded with second project on Hyundai Accent in Turkey and now Varroc is trying to be Hyundai’s global partner.

Hella`s first customer order from a German premium manufacturer for large-scale production has already been acquired. Large-scale production for SSL HD technology will start in 2022 following successful acquisition.

 

 

AUTOMOTIVE LED LIGHTING MARKET SHARE

There are 15 major tier-1 automotive LED lighting suppliers, globally and we have profiled the top 14. Koito, Valeo and Hella are the top three players in automotive LED lighting market globally accounting for ~50%+ market share, cumulatively.

In China market, Shanghai Koito is the market leader with more than 25% market share. In US market, Koito`s North American Lighting is the market leader with more than $1.6 Billion in FY 2018 annual revenue.In addition to commencing operations at Malaysia in November 2019, KOITO has expanded plant in Koito Czech in May 2020. Koito`net sales in Q1 of FY2021 dropped by 45% Y-o-Y, due to the significant decrease in sales in mainstay automotive lighting equipment segment caused by a decrease in the automobile production volume.

The global automotive LED lighting market is extremely consolidated at present(top 3 suppliers have 50%+ cumulative market share).But, we expect the market to open up in coming years on account of many new entrants.The EBITDA margins for auto LED lighting suppliers is ~8-12% in 2019 but on account of growing LED penetration it is expected to grow by 120-150 basis points by 2025.

Infographic : Automotive LED Lighting Market share, Automotive LED Lighting market size, Automotive LED lighting market report

 

Stanley`s five R&D bases, including the Research & Development Laboratory in Yokohama are engaged in technological development in view of future trends. The ZKW Group suplies to the automotive industry all over the world. Its major locations are Austria, Slovakia, and the Czech Republic, as well as in China, India, the USA, Korea and Mexico. To cater to the future demands of the automotive industry, ZKW is expanding its expertise in electronics and in development and testing technology.

Varroc is among the very few India based global suppliers for automotive components, especially lighting. In July 2020, Varroc Lighting Systems received 2 awards from GM one for its Mexico facility and the other Pune facility.It also strengthened the footprint in exterior automotive lighting space through expansion of Varroc Lighting Systems in Japan.

 

ABOUT SUPPLIERS IN AUTOMOTIVE LED LIGHTING MARKET

Koito- A leading provider of LED lighting to many Toyota platforms reported an increase in earnings through Q3-2019 in China due to increase in LED penetration  despite ~8% decline in auto production. From financial standpoint, the global market leader is facing higher R&D expenses in-order to meet next gen lighting on upcoming vehicles.

Hella– A leading LED lighting supplier to all Premium European OEMs and GM in North America,derives ~25% of its global revenues from Germany and ~60% from Europe

Valeo– Among the top 3 players in Automotive lighting globally and has a substantial market share in Europe Automotive lighting market

Varroc Lighting System– India based Varroc group acquired Visteon`s lighting business in 2012 and has now grown the business to a significant size. It is also the LED lighting supplier to Tesla

OSRAM-CONTINENTAL–  The 50-50 joint venture was created in 2018 to supply semi-conductor based lighting modules and lighting control units for front as well as rear application, globally.

Hyundai- Mobis-  The wholly owned subsidiary of Hyundai Motors, supplies LED lighting to Hyundai-KIA vehicles in all major markets except India, where Lumax is the exclusive supplier

Lumax– The market leader of India automotive LED lighting market with more than 45% market share  is now extensively investing in developing PCBs in-house.

Fiem Industries– The India based company is among the top 5 players in two-wheeler segment

COMPANY PROFILES
  1. Valeo
  2. Magnetti Marelli S.p.A(Now acquired by Calsonic Kansei)
  3. HELLA KGaA Hueck & Co
  4. ZKW Group
  5. OSRAM GmbH
  6. Koito Co, Ltd
  7. Stanley Electric Co.Ltd
  8. Ichikoh Industries(Now acuired by Valeo)
  9. Hyundai Mobis Co., Ltd
  10. Varroc Lighting Solutions
  11. Minda Industries Ltd
  12. Lumax Industries
  13. Fiem Industries
  14. Rigid Industries

 

THIS REPORT WILL ANSWER THE FOLLOWING QUESTIONS
  1. Segmentation of passenger vehicles by segment and their respective lighting technology
  2. Penetration of LED Headlights in new car sales in top 20 passenger car markets, two wheelers and commercial vehicles
  3. Value chain of automotive LED lighting manufacturing
  4. Present and upcoming passenger vehicle platforms with LED headlights
  5. Growth of Adaptive LED headlights and related market dynamics
  6. What could be the scope of LED lighting in commercial vehicles? Which segment is most important?
  7. Role of Taiwan in automotive LED chip manufacturing
  8. Threat to the LED headlight after-market from counterfeit LEDs manufactured in East Asia
  9. Future of HID and halogen headlight market in all segments
  10. Market share of automotive LED light manufacturers and their OEM alignment
  11. Impact of BS Vi emission norm on motorcycle LED lighting market in India
  12. Which headlight technology ( projector /reflector) will grow at a faster rate?
  13. Growth in LED DRLs(Day time running lamps) in all major countries 
  14. Details on motorcycle LED headlight market in ASEAN countries
  15. Consumer feedback- the aspect of LEDs on overall aesthetics of a vehicle
1Market Segmentation3
2Executive Summary5-6
3Introduction7-15
4Global LED lighting technology trends16-20
5About EV market and LED lighting used21-24
6Cost breakdown of LED headlight by weight and components25-27
7Global LED headlight sub-component sourcing trends28-30
8About variety of LED headlights and taillights in production 2019-202031-40
9Upcoming vehicle platforms and their LED headlights41-50
10Market Size, Dynamics and Forecast, By Application51-65
11Market Size, Dynamics and Forecast, By OEM66-78
12Market Size, Dynamics and Forecast, By Vehicle type79-90
13Market Size, Dynamics and Forecast, By Geography91-110
14LED headlight manufacturing in US, Europe and Asia111-113
15Growth in adaptive/Intelligent LED lighting114-115
16Competitive Landscape116-118
17New Product development119-120
18OE-Supplier Alignment121-124
19Company Profiles125-135
20Details on LED lighting chip suppliers136
21Unmet needs and Market Opportunity for suppliers137
22Conclusion138
235 Key Predictions for next 5 years139
24Appendix140
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