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The automotive LED lighting market size is forecast to increase by USD 2.00 billion at a CAGR of 4.45% between 2022 and 2027. Market expansion relies on various factors, notably the integration of LEDs in automotive intelligent systems, catering to advanced functionalities and safety features. Additionally, the surging trend of ambient lighting in automobiles enhances the aesthetic appeal and interior ambiance, driving consumer preference. Moreover, the adoption of energy-efficient solutions in vehicles aligns with sustainability goals, prompting manufacturers to integrate eco-friendly technologies. These factors collectively propel the growth trajectory of the market, fostering innovation and market competitiveness. Furthermore, the report includes historic market data from 2017 to 2021.
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This report extensively covers market segmentation by type (exterior and interior), application (passenger cars and commercial vehicles), and geography (APAC, Europe, North America, South America, and Middle East and Africa).
The market share growth by the exterior segment will be significant during the forecast period. The exterior lighting segment includes LED lighting applications for the front, rear, side, and top portions of vehicles. The common application areas include headlights, position lamps, fog lights, DRLs, turn signals, taillights, side mirror lamps, center high-mount stop lights (CHMSLs), license plate lamps, and reflectors.
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The exterior segment was valued at USD 4.92 billion in 2017. The rising demand for energy-efficient lighting solutions has shifted the focus of LED exterior lighting companies away from traditional applications such as turn signals and taillights. Modern vehicles are increasingly adopting for applications such as headlights and DRLs. The increasing demand for LED lighting and rapid technological advances are allowing companies in the market to lower production costs, which is fueling the growth of the market. Hence, the exterior lighting segment is the highest revenue contributor to the market in focus.
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APAC is estimated to contribute 59% 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. APAC dominates the global automotive production industry due to the presence of countries that are among the largest automotive producers globally. The demand in APAC is expected to outpace the demand in developed regions, such as North America and Europe, during the forecast period. This is mainly attributed to the growing demand for safety and convenience features in modern vehicles by end-users from emerging markets in the region. Furthermore, the shift in consumers' preference from fuel efficiency to aesthetics and advanced features is also expected to drive the adoption of LED solutions in APAC during the forecast period.
Moreover, the significant investments being made in infrastructure and industrialization are creating significant demand for passenger and commercial vehicles in APAC. It is expected that India, China, Japan, and Indonesia will account for a significant number of new vehicle purchases, with high electronic content, during the forecast period. This would fuel the need for LED in these countries in the coming years. Hence, these factors will fuel the regional market during the forecast period.
The market experiences significant growth due to technological advancements meeting consumer preferences and safety concerns. From luxury vehicles to buses and freight trucks, LEDs, including halogen, xenon/HID, and advanced materials like indium gallium nitride and aluminum gallium indium phosphide, illuminate the road ahead. Compliance with lighting regulations by bodies like the Economic Commission for Europe (ECE) ensures safety, reducing collisions and fatal crashes. Despite the high cost, fleet managers prioritize LED projector headlights for their vehicles, ensuring optimal visibility and safety for car users, including those in robo taxis. 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 growing popularity of ambient lighting in automobiles is notably driving market growth. To enhance the appearance of cabins at night ambient lighting is used. This lighting uses light pipes, light rings, LED pin spotlights, and diffuser lenses that are integrated into the vehicle's console, door panels, instrument panels, and seat frames. LEDs are used for ambient lighting in cabins owing to their small size and lower energy consumption.
Furthermore, automotive OEMs have been increasing the number of light sources to make vehicles look premium. However, bright lights in automotive cabins can distract drivers, and therefore, the luminance value of cabin lighting is maintained below 0.1 cd/m square. Automotive OEMs such as Audi are continuing research on ambient lighting to determine optimum colors and brightness levels. The ambient lighting improves comfort as it illuminates necessary functions in the dark. Moreover, drivers and passengers can control the intensity and color of ambient lighting. Thus, such factors will boost the market during the forecast period.
The growing adoption of adaptive lighting systems is an emerging trend in the market. Adaptive lighting systems augment the distribution of light according to the driving circumstances. These systems are also being adopted in vehicles owing to their additional safety and comfort features. They are used in both the front and rear lighting of vehicles. LED technology is becoming a crucial enabler for the efficient and reliable operation of these systems when compared with other technologies. Hence, the popularity of these adaptive systems is a positive trend for the growth of the market in focus.
Furthermore, developments by prominent companies are enabling automotive OEMs to offer adaptive lighting systems. For instance, in 2022, Porsche, a subsidiary of Volkswagen AG, showcased new HD matrix LED headlight technology. The innovative headlight technology offers functions that include low and high beams, glare-free high beam, adaptive highway high beam, dynamic safety zone, and sign glare reduction. Hence, such factors will fuel the market growth during the forecast period.
Rising prices of raw materials are major challenges impeding market growth. Aluminum, copper, polyvinyl chloride (PVC), and paper are some of the raw materials used in automotive LEDs. Prices of these materials have been experiencing an upward trend in recent years. Furthermore, the rising price of crude oil is increasing the price of PVC.
Since the prices of the raw materials are subject to fluctuations, manufacturers find it difficult to maintain stock, which increases the operational cost. The high prices of raw materials increase the price of LED lights when compared with other types of automotive lighting. This acts as a crucial challenge for the growth of the global market. Furthermore, innovations in these systems and efficient design changes are of prime importance for manufacturers. Therefore, these factors will hinder the market growth during the forecast period.
The 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 market forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth 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.
Lumax Industries Ltd. -The company is involved in manufacturing a wide range of automotive components and systems in India, supplying to all segments of the market, such as OEMs, aftermarkets, and exports. The key offerings of the company include automotive LED lighting solutions.
The 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 research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
The market experiences a surge in demand driven by sophisticated safety measures and a focus on on-road safety. With the adoption of advanced technologies like OLED, Matrix LEDs, and laser lighting, manufacturers enhance visibility and reduce traffic accidents. Features such as daytime running lights (DRLs) and glare-free lighting systems contribute to a notable reduction in fatal crashes. Premium innovations like Premium Adaptive Driving Beam (ADB) technology ensure durability, reliability, and operational efficiency, bolstering profit margins.
Furthermore, as the market evolves to accommodate automotive vehicles and electric vehicles, the emphasis remains on road safety and energy efficiency through LED technology. Further, In the market, the focus is on energy efficiency and reducing CO2 emissions with high-power efficiency solutions for economy vehicles. Turning lights, parking lights, and brake lights are adopting advanced technology and electronic systems to enhance functionality. While LED lights offer benefits, mitigating driver distraction remains essential, with attention on managing the cost of these innovative lighting solutions.
Market Scope |
|
Report Coverage |
Details |
Page number |
168 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.45% |
Market growth 2023-2027 |
USD 2.00 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
4.15 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 59% |
Key countries |
US, China, Japan, South Korea, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Changzhou Xingyu Automotive Lighting System Co. Ltd., Everlight Electronics Co. Ltd., HELLA GmbH and Co. KGaA, Hyundai Mobis Co. Ltd, Koito Manufacturing Co. Ltd, Koninklijke Philips NV, LG Electronics Inc., Lumax Industries Ltd., Lumileds Holding BV, Marelli Holdings Co Ltd, Nichia Corp, OSRAM GmbH, Samsung Electronics Co. Ltd., Seoul Semiconductor Co. Ltd., SL Corp., Stanley Electric Co. Ltd., Tungsram Operations Kft., Valeo SA, Varroc Lighting, and Zumtobel Group AG |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the 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. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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