Armrest in a vehicle is one of the comfort features that is incorporated in the modern vehicles, offering extra comfort to the driver and passengers as they can rest their arms on them. It also makes the driving experience a bit more convenient, especially during long car journey. As people are demanding more and more safety as well as comfort features in their cars, automakers are launching many variants with in-built armrest. Growing middle class population and living standards is boosting the demand for passenger cars with safety and comfort fetaures. This, in turn, is spurring the global automotive armrest market growth. The figure below represents the market size of the global automotive armrest market for the year 2019 and 2025:
Global Automotive Armrest Market, Forecasts From 2019 to 2025,
Source: Knowledge Sourcing Intelligence Analysis
According to the Knowledge Sourcing Intelligence analysis, the global automotive armrest market is projected to grow at a CAGR of 1.35% during the forecast period, reaching a total market size of US$11.143 billion in 2025 from US$10.284 billion in 2019. The prime growth factor for this market is the growing inclination of consumers towards additional comfort features to be added to their vehicles. Growing penetration of advanced comfort features in automobiles is significantly driving the global automotive armrest market growth.
Furthermore, investments are being funneled by major automotive companies in order to further expand their production facilities which, in turn, will also fuel the global automotive armrest market growth during the next five years. In January 2018, for instance, Toyota announced to spend US$471 million to upgrade and expand its factory near Valenciennes, northern France. In July 2018, Nissan announced its investment in Argentina to increase the production of its pickup trucks to meet the growing demand across e-commerce and logistics industry.
Global Automotive Armrest Market Segment Overview:
The global automotive armrest market has been segmented on the basis of position, vehicle type, sales channel, and geography. On the basis of position, the market segmentation has been done as front and rear. The global automotive armrest market has been segmented on the basis of vehicle type as passenger vehicle, light commercial vehicle, and heavy commercial vehicle, By sales channel, the global automotive armrest market has been classified as OEMs and aftermarket. Geographically, the classification of this market has been done as North America, South America, Europe, Middle East and Africa (MEA), and Asia Pacific (APAC).
By position, the front segment accounted for a significant market share in 2019 as front armrest is almost in-built in all variants, be it hatchback, sedan, or SUV. The rear armrest segment is projected to witness a considerable CAGR during the forecast period.
By vehicle type, the passenger vehicle segment holds a noteworthy share in the global automotive armrest market throughout the forecast period. The growth of light commercial vehicle segment is anticipated to show a significant growth over the forecast period on account of booming e-commerce and logistics industry across different regions.
Geographically, Asia Pacific (APAC) is one of the major regional markets with the presence of several production facilities set up by global auto manufacturers in countries like China, India, and South Korea. Europe also holds a significant market share owing to the well-established automotive industry in countries like Germany and France. Supportive government policies and initiatives in countries like the United States and Mexico to ramp up the domestic automotive production will continue to propel the armrest market growth in the North American region during the projected period.
Declining Automotive Production as Well as Sales Volume
The global automotive industry has been facing a steep decline, both in production and sales, in the past few years. The figure given below shows the trends in global automotive sales from 2017 to 2019:
Global Automotive Sales, in Million Units, 2017 to 2019
Source: OICA (International Organization of Motor Vehicle Manufacturers)
As shown in the above figure, the sales of automobiles has been witnessing a continuous decline since 2017. This shrinking automotive sales worldwide is majorly due to factors such as poor quality roads, heavy traffic congestion, limited parking lot availability, continuous decline in resale value of cars, and expensive vehicle ownership. The rapid emergence of ride-hailing services is considered to be one of the prime factors for this decline in the automotive sales volume globally. As ride-hailing services such as Uber, DiDi, and Ola offer convenient commuting services at cheaper rates, more and more people are availing these services even if they own a vehicle. This is because people are increasingly inclined towards taking taxis or ride-hailing services so as to avoid traffic and stress while driving in congested roads. Another major factor that has resulted in a drastic decline in revenues of the global automotive sector is the recent global pandemic caused by COVID-19. Declining economic activity has reduced the demand for vehicles, both passenger and commercial. On the other hand, temporary shut down of production facilities by automakers due to global supply chain disruption and mandatory lockdown and social distancing measures being implemented by governments has resulted in the further decline in the total automotive production volume this year. Global auto giants such as Ford, Fiat Chrysler, Volkswagon Group, General Motors, and Tesla have suspended production due to this pandemic outbreak. The pandemic has also caused major automotive events around the world, including 2020 Geneva Motor Show, Australian Grand Prix, Qatar Grand Prix, and New York International Auto Show, being either postponed or cancelled. Hence, all these factors are also leading to a fall in the demand for automotive armrest, thus negatively impacting the overall market growth.
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.