Global Automotive Suspension Market 2020-2025

September 1, 2020
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KEY FINDINGS

  1. COVID-19 is likely to shrink global auto production by ~21% i.e. from ~90M vehicles in 2019 to ~70M vehicles in 2020 and the auto suspension market will be directly impacted due to the contraction
  2. Declining vehicle refresh timelines and generation upgrades coupled with higher demand for SUVs/crossovers will remain fundamental growth driver
  3. McPherson struts in Front and Multi-link rear suspension remains the most preferred setup in fast growing SUV segment across many auto makers and regions
  4. Higher penetration of air suspension and dynamic chassis control products in premium segment will drive Dollar content per vehicle for suppliers
  5. The automotive suspension market is and will remain highly consolidated with EBITDA margins being less than 6% for most suppliers

INTRODUCTION

Suspension is a critical aspect of every automobile as ride quality is a key parameter considered by many car buyers. As product refresh and facelift timelines keep shrinking in a bid to keep the consumer involved, we expect many vehicles will undergo significant suspension upgrades in coming years.

 

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US AUTOMOTIVE SUSPENSION MARKET

As of Aug 2020, 285 vehicles are on sale in US from 34 OEMs. The average B-2-B price for automotive suspension in US market is 2X of emerging markets due to two reasons 1. High share of SUV/crossover and pickups in new car sales which require robust suspension as standard 2. More than 40 vehicles are offered with Air suspension as standard or optional extra.

US auto sales are expected to decline by 20-24% in 2020, due to COVID-19 and only expected to recover to pre-crisis level by 2022. US auto suspension market is among the most matured market globally, with OEMs offering variety of Suspension choices as per vehicle segment.

For Example, in the high margin Pickup truck segment

  • RAM 1500 has Multi-link rear suspension as standard and Air suspension as an optional package on 5 out of 7 variants
  • Chevrolet Silverado 1500`s live axle rear suspension includes 2-stage, semi elliptic multi-leaf springs. The optional package includes 2-inch factory lift and monotube shocks

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Jeep- the SUV/off-road vehicle specialist offers Air suspension on Grand Cherokee,

Among Japanese OEMs, Honda offers rear multi-link suspension on all top-selling vehicles. Subaru offers 4-wheel independent raised suspension with front strut type and rear Double wishbone suspension

 

 

EUROPE AUTOMOTIVE SUSPENSION MARKET

Europe is the second most fragmented market after China, where the top 30 vehicles sold comprised just 41% of new car sales in 2019.

Among mass market vehicles, Dacia (the Romanian budget brand of Renault) and Renault offer Flexible axle with Front– MacPherson-type with rectangular lower arm and Rear anti roller bar programmed deflection and coil springs as a standard fitment on two of its best-sellers, Duster and Sandero. Toyota Yaris, the only vehicle from Toyota to make it to the top 30 best-selling list has a McPherson strut front and torsion beam rear suspension.

 

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VW offers Dynamic Chassis control (Suspension system which adjusts damping based on road conditions as an optional extra on many best-sellers at an optional extra (~$1,200).

Citroën launched Citroën Advanced Comfort® programme in 2016 where it added two hydraulic stops i.e one for rebound and one for compression, so that the suspension can now better adapt to the road surface.

In 2014, Audi teamed up with an Italian supplier to develop a lightweight coil spring made of fiberglass-reinforced polymer. The four new coils provided a weight savings of about ~5 Kg per car.

The premium German OEMs continue to rely on Multi-link suspension with Air suspension offered as a paid extra on many higher segment vehicles.

Sep 2020 update: Mercedes has launched the 2021 S-Class with air suspension as standard. The E-Active Body Control active suspension system is also available as an option. The new S-class stands out in the sense that It now incorporates a new function through the safety systems by which it can raise the body height by 80mm if there is an impending side impact. 

 

 

CHINA AUTOMOTIVE SUSPENSION MARKET

95 OEMs exist in the Chinese market with more than 1,500 models in their portfolio. The Chinese passenger car market is unlike any other market where Middle- class customers get the widest array of new car choices at a reasonable price range.

The Chinese government is putting in place various measures (Easy financing, Easy license plate availability) to improve demand outlook of the auto industry but the auto industry is unlikely to come back to pre-COVID levels before 2021.

 

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The top two best-selling vehicles in China, Volkswagen Lavida and Nissan Sylphy priced in same range ($15,000-$24,000) have front McPherson Strut and Torsion rear beam setup. In the mid and high segment, many vehicles have front McPherson and Rear Multi-link setup.

The best-selling domestic brand SUV, HAVAL H6 has McPherson independent suspension, Double Wishbone independent suspension.

In premium best-sellers like Mercedes C Class, Audi A4, both front and rear Multi-link independent suspension is a standard fitment.

 

 

INDIA AUTOMOTIVE SUSPENSION MARKET

The Indian economy and car industry were already reeling due to economic slowdown and impending shift to BS6 emission norms and now COVID-19 has given a deadly blow to the market.

104 vehicles from 16 OEMs are sold in India. Maruti Suzuki the market leader in India with more than 50% market share offers McPherson struts front and Torsion beam rear suspension on all cars as a standard fitment. Multi-link and Air suspension systems are almost non-existent in the market.

Due to below par road conditions in India, many OEMs re-tune the suspension of their global products to suit Indian conditions.

Sep 2020 update- The all new, 2nd gen Mahindra Thar will now come with independent upfront and multi-link rear suspension replacing the rigid, non-independent leaf-spring rear unit from the outgoing model.

 

 

GLOBAL COMMERCIAL VEHICLE SUSPENSION MARKET

BUS: In China, Leaf spring, bidirectional telescopic shock absorber is common on mass transit buses whereas the Intercity buses have air suspension.

In Europe, electronically controlled Air suspension supplied by ZF is standard on many bus models.

In India, Semi-elliptical or Parabolic Leaf Spring on both front and rear is very common. Even, the Daimler buses in India with Air suspension have just 2/4 bellows instead of 6 as found in other regions.

Top 4 markets account for ~60% of M&HCV trucks sold globally. China alone accounted for ~38% of M&HCV trucks sold across the globe.

 

Info Graphic: Automotive Suspension Market Size

TRUCK: In Europe, DAF and IVECO have air suspension on various models.

In India, light duty as well as Medium duty trucks have 4/6 leaf spring suspension setup at the rear with McPherson struts at front.

In China, Foton`s(brand owned by BAIC) Auman range of tractors has air suspension on front and rear axles. Howo`s 6*4 tractors have 10 semi-elliptic leaf springs, hydraulic telescopic double-action shock absorbers and stabilizer.

 

 

COVID IMPACT ON AUTOMOTIVE SUSPENSION MARKET

Post H1-2020, the demand situation has started to improve particularly in China and the 2020-SAAR for passenger cars is now expected at ~18M vehicles. Europe is expected to decline by ~22% to 12.5M vehicles in 2020. Green shoots in EV segment in Europe is a major encouraging factor for all auto suppliers but not in particular for automotive suspension market.

US SAAR after Aug 2020 sales is now estimated at ~15M vehicle, which is an excellent recovery from record lows of 10.4M in April 2020. The transaction prices per car have continued to grow in 2020, even as the pandemic rages throughout US.

The impact of pandemic has already started to weigh in on financials of suspension suppliers worldwide. ZF in its H1-2020 earnings showed a decline of 26% YOY with adjusted EBITDA dipping in negative territory.

Almost all suppliers have so far declined to give any guidance for full year performance due to continued uncertainty in the global production environment.

In India, the COVID cases continue to rise as of Sep 2020 and now is among the top 3 worst affected countries. The country was already in the midst of an economic slowdown before COVID, but post COVID the demand continues to recover at encouraging levels in rural markets.

 

MARKET SIZE AND FORECAST

The global Automotive suspension market is estimated at $XX Billion in 2020, growing at –% CAGR till 2025.

 

COMPETITIVE LANDSCAPE

The competitive landscape of global Automotive suspension market is regionalized as there are many regional market leaders. ZF is the market leader in the European market whereas the US market is dominated by TRW (now ZF) and Tenneco.

In terms of profitability both Tenneco and ZF have ~5-6% EBITDA margins from suspensions/ride control market.

Almost all suspension suppliers heavily rely on high volume platforms to be profitable across all geographies.

WABCO is a leading provider of air suspension for commercial vehicles and derives 54% of its revenue from truck and bus manufacturers in 2019. It supplies Electronically controlled air suspension to many Truck and Bus OEMs across the globe including Ashok Leyland, China National Heavy Truck Corporation (CNHTC), Fiat (Iveco), Hino, Paccar and TATA Motors.

In April 2020, ZF completed its $7 billion acquisition of WABCO.

Tenneco has a diversified presence across various vehicle segments, OEMs and region

Tenneco`s CVSAe adaptive suspension technology from its Monroe Intelligent Suspension portfolio has already been fitted on more than 50 models worldwide. The semi-active suspension technology is connected to a central ECU and it continuously senses and independently adjusts damping levels every 10 milliseconds.

Tenneco also has a strong presence in the entry level car segment, having supplied to all generations of Suzuki Swift which is a top-seller in Asian markets for more than a decade now. It has 7 manufacturing locations in a low-cost market like India.

In the fast growing EV market in Europe, Volkswagen’s new ID.3 electric is equipped with an advanced semi-active suspension from DRiV( Monroe). We believe the growth of MEB platform based other derivatives from VW group will further add to the top line and bottom line of Tenneco in coming years.

Among other players in the market, Magneti Marelli was recently spun off by FCA and acquired by Calsonic Kansei and the new entity is now called Marelli. Marelli products can still be found on various FCA vehicles.

Mando is a leading South Korean suspension manufacturer and a leading supplier to Hyundai-KIA group.

Its products include (Electronically Controlled Suspension, “ECS”), 3-stage damping force Variable Suspension System (3 Step ECS), Fuzzy Adaptive Control Suspension System, Continuously Variable Electronic Control Suspension Time.

Mando derived 17% of its annual revenue(~$0.8B) from suspension components in 2019. In recent years it has also diversified outside South Korea to supply local Chinese OEMs.

 

POPULAR NEW PRODUCTS IN AUTOMOTIVE SUSPENSION MARKET

Monroe (Owned by Tenneco) `s CVSAe– Continuously Variable Semi-Active Suspension (CVSA) with externally mounted electronic valve senses the road and driving conditions to independently adjust four dampers in real time for a more comfortable and controlled ride.

DRiV also from Monroe is part of the Monroe Intelligent Suspension portfolio, includes selective suspension solutions (Dual Mode) and semi-active solutions with external valve (CVSAe), and two independent valves (CVSA2)

Ford’s CCD (Continuously Controlled Damping) technology– Available as an option on 2019 Focus, monitors suspension, body, steering and braking inputs every 2ms, and adjusts comfort accordingly

Audi`s Active suspension – Audi`s new generation of active suspension developed for 2018 A8, offers a range of driving modes, made possible by a 48-volt (48V) electrical system. The fully active, electromechanical suspension system, drives each wheel individually to adapt to road conditions. Each wheel will have an electric motor, powered by the 48V main electrical system capable of generating up to 1,100Nm torque on the suspension via a coupling rod.

Bilstein`s(Owned by Thyssenkrup) Dampmatic has mechanically controlled shock absorbers, from the company’s B6 portfolio of products, operating on the front axle, works in conjunction with passive type dampers on the rear axle. The new suspension technology was offered on special edition 2017 Subaru Impreza

COMPANY PROFILES

  1. Tenneco Inc
  2. ZF Friedrichshafen AG
  3. WABCO(Knorr-Bremse)
  4. Mando Corporation
  5. KYB
  6. Hendrickson
  7. Marelli
  8. Thyssenkrupp AG
  9. Gabriel(Anand Group)

 

 

THIS REPORT WILL ANSWER THE FOLLOWING QUESTIONS

  1. Installation of Multi-link, Air suspension by OEM, 2020-2025
  2. Growth rate of Mult-link and Dynamic chassis control system, by region
  3. Average B-2-B price of Automotive suspension, by geography and vehicle segment
  4. Suspension strategy by OEM (Top 5 OEMs per region)-2020
  5. COVID impact on automotive suspension market
  6. EV market growth impact on Automotive suspension market globally
  7. Market share of major vendors-2019, OE-supplier alignment
Sl noTopic
1Market Segmentation
2Scope of the report
3Abbreviations
4Research Methodology
5Executive Summary
6Introduction
7Insights from Industry stakeholders
8Cost breakdown of Product by sub-components and average profit margin
9Disruptive innovation in the Industry
10Technology trends in the Industry
11Consumer trends in the industry
12Recent Production Milestones
13Component Manufacturing in US, EU and China
14COVID-19 impact on overall market
15COVID-19 impact on Production of components
16COVID-19 impact on Point of sale
17Market Segmentation, Dynamics and Forecast by Geography, 2020-2025
18Market Segmentation, Dynamics and Forecast by Product Type, 2020-2025
19Market Segmentation, Dynamics and Forecast by Application, 2020-2025
20Market Segmentation, Dynamics and Forecast by End use, 2020-2025
21Product installation rate by OEM, 2020
22Incline/Decline in Average B-2-B selling price in past 5 years
23Competition from substitute products
24Gross margin and average profitability of suppliers
25New product development in past 12 months
26M&A in past 12 months
27Growth strategy of leading players
28Market share of vendors, 2020
29Company Profiles
30Unmet needs and opportunity for new suppliers
31Conclusion
32Appendix

 

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