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The automotive heat exchanger market size is forecast to increase by USD 9.13 billion at a CAGR of 6.63% between 2023 and 2028. The market's growth hinges on key factors, notably the prevalent reliance on IC engines for mobility in emerging nations, escalating passenger car sales, and mounting governmental regulations mandating the adoption of efficient HVAC systems in vehicles. This confluence of factors underscores the importance of addressing environmental concerns and enhancing energy efficiency across the automotive sector. With a focus on meeting regulatory standards and consumer demands for sustainable transportation solutions, the market is poised for significant expansion, driven by advancements in vehicle technology and a growing emphasis on environmental sustainability in the automotive industry.
It also includes an in-depth analysis of market trends and analysis, market growth analysis and challenges. Furthermore, the report includes historic market data from 2018 - 2022.
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The market is experiencing a shift towards medium-term growth, driven by increased production of vehicles and rising adoption of innovative technologies like battery thermal management systems. While traditional heat exchanger manufacturers play a significant role, challenges such as volatility in raw material prices and the complexity of designing advanced exchangers hinder progress. However, government initiatives like the California ZEV program and efforts to enhance charging infrastructure are propelling the market forward. With a focus on reducing environmental pollution and meeting zero-emission standards, the demand for heat exchangers is rising across diverse applications in the automotive sector. In the medium term, the Market is poised for significant growth, driven by innovations like the battery thermal management system. Manufacturers are diversifying their product portfolio to cater to various vehicle types and applications. Despite potential inhibiting factors, such as regulatory challenges, advancements in flow arrangement and heat transfer device ensure efficient performance. These technologies find applications not only in automotive but also in steam power plants and chemical processing plants, highlighting their versatility in managing process fluids effectively. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The heavy dependence on IC engines for mobility in emerging countries is notably driving market growth. Emerging countries like India and China are witnessing an increase in the preference for mobility through roadways. In the commercial vehicle segment, there is hardly any vehicle that runs on battery or on alternate fuels. Hence, there is a high reliance on internal combustion (IC) engines for transportation.
One of the main reasons why road transport is preferred for mobility and the transportation of cargo is the limited availability of rail services. The lack of effective rail services for logistics is forcing freight companies to choose roadways as a reliable mode of transportation. Heavy-, medium-, and light-duty vehicles are used extensively for transporting cargo in China. In India, road transportation is the widely chosen means for container transport. Thus, automobiles operating on IC engines play a key role in providing easy mobility and transporting cargo, which will drive the demand for automotive heat exchangers. This, in turn, augments the growth of the market during the forecast period.
An increase in the popularity of brazed copper heat exchangers is the primary trend in the market. Aluminum heat exchangers are being replaced by brazed copper heat exchangers in heavy vehicles. Brazed copper heat exchangers have several advantages over conventional ones. The CuproBraze process is simpler and inexpensive than the manufacturing process of aluminum heat exchangers as it has fewer production steps, higher throughput rates, and lower scrap rates.
Other benefits include lower weight and longer life, superior thermal conductivity, and better resistance to corrosion, copper is virtually 100% recyclable. The brazing process gives stronger joints to the copper-brass heat exchangers than the soldered copper-brass heat exchangers or brazed aluminum heat exchangers. Also, brazed copper heat exchangers have thinner fin and tube materials, which further reduce the weight. As a result, brazed copper heat exchangers are preferred over soldered copper-brass or brazed aluminum radiators.
Gradual increase in annual wages leading to declining profit margins is the major challenge impeding market growth. In the automotive industry value chain, OEMs have been taking up the liability for most of the price pressure and warranty costs from the demand in the past. However, the situation has changed in the past five years as OEMs have started pushing the liabilities to tier-1 suppliers, who, in turn, have pushed them to component manufacturers. This has led to cost optimization across the industry to remain profitable.
However, owing to the rising labor costs, these countries are gradually losing their cost advantage. For instance, in China, as the population has become more affluent and moved up the learning curve, there was an increase in the cost of employment. Similarly, experts from the Hong Kong Printed Circuits Association observed a labor movement from one manufacturer to another for a mere increase in income. This led to a price war among the manufacturers to retain talent in the company, which further increased the labor cost. This situation increased the overall cost of production. Hence, the gradual increase in annual wages will lead to a decline in the profit margins, which will adversely affect the market forecast.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Hisaka Works Ltd. - The company offers automotive heat exchangers, serving the automotive and transportation sectors as well as a wide variety of heavy industrial markets.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is undergoing significant transformations due to various factors such as supply chain activities, large-scale manufacturing, and restrictions on travel affecting demand dynamics. While declining sales pose challenges, the market is witnessing an uptick driven by the production of light vehicles and rising demand for passenger vehicles. The shift towards engine downsizing and lightweight automotive materials further propels growth, alongside the increasing adoption of hybrid and electric vehicles. However, challenges persist, including volatility in raw material prices and the complexity of designing advanced heat exchangers. With governments implementing zero-emission standards and incentives for vehicle manufacturing, the market is poised for expansion, particularly in emerging and developing countries.
The market share growth of the passenger cars segment will be significant during the forecast period. OEMs are equipping their passenger cars with brazed copper heat exchangers that have a longer life span and can last for ten years, which will reduce the replacement cost. Such heat exchangers are about 35% lower in weight compared to traditional heat exchangers as their fins and tubes are manufactured with fewer materials. Hence, the growth in the passenger cars segment will fuel the market growth as predicted in the market forecast report.
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The passenger cars segment was valued at USD 17.82 billion in 2018. Heating, ventilation, and air-conditioning (HVAC) is a technology used to maintain the internal temperature of the cabin of the vehicle. Due to the augmented demand for comfort in vehicles, these compressors are increasingly being used in mass-selling cars as well as commercial vehicles. HVAC requires a heat exchanger to dissipate the heat.
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APAC is estimated to contribute 56% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The increasing disposable incomes and the launch of new car models by OEMs are the main factors driving the market. Moreover, the perception of achieving a higher social status by owning a car is driving the market for passenger cars in China and India despite the increasing rates of traffic congestion, government regulations for owning passenger cars, and rising levels of vehicular pollution. APAC has the maximum number of potential first-time buyers of passenger cars, which is also increasing the number of passenger car sales. This will ultimately fuel the growth of the market in APAC.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
Traditional heat exchanger systems manufacturers face challenges due to volatility in raw material prices and the complexity of designing advanced and lightweight heat exchangers. Despite this, the automotive industry is witnessing a shift towards hybrid and electric vehicles, driven by factors like ever-increasing demand and rising adoption. Governments worldwide, such as the Norwegian Parliament and the Government of India, are implementing zero-emission standards and offering incentives like the California ZEV program to boost the production of battery electric vehicles. However, restrictions on travel and declining sales pose temporary setbacks. Nevertheless, the market anticipates growth with the rising demand for light vehicles and passenger vehicles, especially in emerging markets.
The thermal systems sector is undergoing significant transformations, with innovations like the Smart Heat Pump gaining traction. Automakers are increasingly focusing on integrating advanced valves and pumps to enhance vehicle dynamics and safety features. Furthermore, the industry is witnessing a surge in construction type heat exchangers, particularly in building heat and air conditioning systems, transportation power systems, and refrigeration units. Despite restraints such as the high cost of luxurious electric vehicles and fuel-efficient vehicles, the market is propelled by the growing popularity of low-emission vehicles and the integration of sensors, radars, and cameras for enhanced safety and convenience in connected vehicles. Additionally, the advent of AI, Big Data, and IoT is revolutionizing vehicle connectivity and infotainment systems, paving the way for a greener, smarter automotive future.
Industry Scope |
|
Report Coverage |
Details |
Page number |
179 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.63% |
Market growth 2024-2028 |
USD 9.13 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
6.1 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 56% |
Key countries |
China, US, Japan, Germany, and India |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Alfa Laval AB, API Heat Transfer Inc., Be Cool Radiators, Clizen Inc., Conflux Technology Pty Ltd., Constellium SE, BorgWarner Inc., Granges AB, Haugg Kuhlerfabrik GmbH, Hisaka Works Ltd., HongDao Automotive Parts Co. Ltd., MAHLE GmbH, Modine Manufacturing Co., Nissens Group, Senior Plc, Southwest Radiator Inc., Spectra Premium Industries Inc., Valeo SA, Vibrant Power Inc., and Vikas Group |
Market dynamics |
Parent market analysis, Market forecast, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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