In a vehicle, fuel and air produce power within the engine through combustion. However, only a portion of the total generated power is used by the engine while the rest is wasted in the form of heat and exhaust. It is crucial to remove this excess heat to prevent the engine temperature go too high which result in overheating and viscosity breakdown of the lubricating oil, making metals of the overheated engine part weak, thus resulting in quicker wear of the engine. To keep the engine cool, a cooling system is used to remove the excess heat. Most cooling systems that are used in automobiles consist of the following components- water pump, radiator, radiator pressure fan, electric cooling fan, radiator pressure cap, and thermostat. Of these components, radiator is one of the most prominent part of the cooling system as it transfers heat. Radiators are also known as heat exchangers which cool down the internal combustion engine of vehicles. Coolant liquid is added to the radiator and it transfers the heat from the fluid inside to the air outside and thereby cools down the engine.
The global automotive radiators market is projected to grow at a substantial CAGR during the forecast period. Rising purchasing power and living standards, especially in developing countries such as China and India is encouraging people to buy their own vehicles. Booming logistics industry is another driver of the global automotive radiators market. Furthermore, global automakers are continuously expanding their production facilities across the globe in order to capture a major share in the automotive market, thereby driving the global automotive radiators market growth. Supportive government policies to boost the domestic automotive production will further continue to bolster the growth of automotive radiators market during the next five years. For example, in March 2019, the government of São Paulo created a tax incentive program called IncentivAuto to protect car manufacturers in Brazil from global competition. As per the program, a car manufacturer will have to invest at least 1 billion R$ and create atleast400 new jobs in order to receive a discount of upto 25%. Projects that qualify for the tax cuts include new production lines or new plants.
Stringent vehicle emission regulations being implemented across different economies is also a factor that is contributing significantly to the growth of the global automotive radiators market since Auto manufacturers are using various technologies in order to reduce the vehicle’s fuel combustion level. In European Union (EU) region, for instance, regulation (EC) 443/2009 sets mandatory emission reduction targets for new cars. On April 17, 2019, the European Parliament and the Council adopted Regulation (EC) 2019/631 which introduces CO2 emission performance standards for new vans and new passenger cars for 2025 and 2030. This new Regulation replaced and repealed Regulation (EC) 443/2009 and came in effective from January 1, 2020.
Growing Adoption of Electric Vehicles Restraining the Market Growth
Growing focus on electric vehicle (EV) production and adoption is likely to hinder the growth of the global automotive radiators market during the forecast period. Governments as well as global organizations are making continuous efforts towards environmental sustainability and reduction in greenhouse gas (GHG) emission. For instance, In the United States, as of 2019, 23 states and the District of Columbia have implemented statewide greenhouse gas emission target to reduce emissions 26 to 28 per cent below 2005 levels by 2025.In 2019, the British government announced its target to cut the country’s greenhouse gas emissions to almost zero by 2050 as a way to tackle climate change. As such, there have been investments being funnelled in the EV sector with governments taking several initiatives and implementing favourable policies to increase their adoption. The figure below represents the global BEV (battery electric vehicle) stock for the period 2010-2019:
Global Electric Car Stock, From 2010 to 2019, in Million Units
Source: IEA (International Energy Agency)
Electrification of vehicles will affect revenues of many auto part manufacturing companies. Components and parts like turbos, intercoolers, oil filters, engine parts, and other ICE-related products are going to face declining growth rates since electrically-powered components have fewer moving parts. Although the current share of EV segments is quite small in the global automotive industry, this continuous increase in EV stock will continue to decline the market growth of automotive radiators in the coming years. Even automakers are increasing their production volume of electric vehicles to gain a competitive edge in this booming segment. In 2018, Mahindra & Mahindra won a contract to supply 1,000 EVs to the Bengaluru-based transport firm, Baghirathi Travel Solutions Pvt. Ltd.
Market Segment Overview:
The global automotive radiators market has been segmented by material type, vehicle type, end-user, and geography. On the basis of material type, the market has been classified into copper and brass, and aluminum. By vehicle type, the segmentation of the global automotive radiators market has been done as passenger vehicle, light commercial vehicle, and heavy commercial vehicle. By end-user, the market has been segmented as OEMs and aftermarket. Geographically, the global market has been classified as North America, South America, Europe, Middle East and Africa, and Asia Pacific.
Aluminum Segment Accounts for a Significant Market Share
By material type, the aluminum segment held a significant share in 2019 on account of its wide adoption across passenger vehicle business segment. Higher efficiency of aluminum-based radiators as compared to copper-based radiators contributes to the growth of this segment during the forecast period. Other advantages of aluminum-based radiators include lighter weight and longer lifespan, thereby driving the market growth. However, copper and brass segment is projected to witness a decent CAGR during the forecast period on account of growing demand for heavy vehicles across the global logistics sector.
Declining Light Commercial Vehicle Production
By vehicle type, the passenger vehicle segment is poised to witness a slow growth during the forecast period since the production as well as sales of passenger cars has been witnessing a steep decline from the past two years.
Global Passenger Car Sales Volume, in Million Units, 2015 to 2019
Source: OICA (International Organization of Motor Vehicle Manufacturers)
The recent COVID-19 global pandemic outbreak has also severely impacted the both production and sales of vehicles by disrupting the global supply chain, temporary halt on production to maintain social distancing, and weakened economic growth with declining income and rising unemployment.
ABOUT THE AUTHOR:
Anjali Joshi is a senior market research analyst at Knowledge Sourcing Intelligence. She oversees a team of analysts and is known for the quality of market intelligence she delivers to the clients which range from start-ups and Non-profit Organizations to Fortune 500 companies. Anjali’s keen understanding of international business and market dynamics, coupled with her years of experience working in this industry, allows her to analyse current and future trends across both global and clients’ target markets and help them in making informed decisions.