The global market for automotive refrigerants is poised to grow at a CAGR of 3.56% throughout the forecast period. The major factors that supplement the global automotive refrigerants market include the growth in the demand for luxurious vehicles coupled with the burgeoning consumer requirements regarding the proper functioning of the air conditioning systems of the vehicles which is considered as one of the main features that add up to the comfort of the vehicles. The growing disposable income along with a rise in the middle-class population is also leading to an increased demand for vehicle comfort and features which is also projected to positively impact the demand for these refrigerants and add up to the market growth significantly throughout the forecast period and beyond. Also, a significant increase in the demand for vehicles across the globe, especially across the developing economies, is also leading to a decent increase in the production also. This, in turn, is also anticipated to boost the demand for automotive refrigerants in the coming years.
Furthermore, the growing investments by the major automotive manufacturers across the globe with an aim to ramp up their production output in order to meet the growing demand along with the initiatives by the governments of various countries for the expansion of the automotive sector to improve the economic stability also shows the potential for the market to surge over the forecast period and beyond. For instance, in March 2017, Ford announced its investment of $1.2 billion to expand the production of trucks and SUVs in its facilities in the United States. Similarly, during the same period, March 2017 the Government made an announcement regarding the latest plan for the auto industry in the country, known as the One Million Plan (Plan 1 Millón). According to this plan, the country is focused on producing around 750,000 cars in a year by 2019, and around one million units annually by 2023. Furthermore, the growing investments by players in countries like India, China, Spain, and France among others also play an important role in bolstering the market growth during the forecast period.
In addition, the rising investments by key market players in the automotive refrigerants market with an aim to expand the market share and gain a competitive edge over other players further propel the opportunities for the market to surge in the near future. For instance, in October 2018, Honeywell International announced the start of its new US$300 million automotive refrigeration production facility in Geismar, La, with an aim to ramp up the production to meet the globally growing demand for its next-generation mobile air conditioning refrigerant.
On the basis of vehicle type, the global automotive refrigerants market has been classified into passenger vehicles and commercial vehicles. The market for commercial vehicles is projected to show good growth in the coming years owing to the fact that rapid industrialization in the various developing economies such as India, China, and Brazil is leading to a growing dependence on freight transport which is boosting the manufacturing of trucks. Also, the growth of the e-commerce industry is also one of the major factors which is expected to drive the demand for light commercial vehicles. Furthermore, the burgeoning logistics sector also drives the demand for the LCVs which is simultaneously anticipated to boost the growth of the market throughout the forecast period.
Geographically, the automotive refrigerant market has been segmented into North America, South America, Middle East and Africa, Europe and the Asia Pacific. North American region is anticipated to hold a noteworthy share owing to the early technology adoption and the presence of a well-established automotive industry. Also, the presence of key market players in the region along with the key automotive manufacturers in the countries such as the United States and Canada, also support the significant share of North America in the global market during the coming years.
Increasing investments in electric and hybrid vehicles
The growing demand for electric vehicles is one of the prime opportunities for global automotive refrigerants market growth owing to the fact that these refrigerants are considered as an important and a suitable part for the air conditioning systems of the automobiles. A surge in the demand is anticipated to propel the production of electric and hybrid cars, thereby complement the growth of these refrigerants. In addition, favorable government policies regarding the promotion of electric vehicles is further projected to augment the demand for automotive refrigerants during the forecast period. Moreover, the deployment of electric vehicles has also been growing at a remarkable pace during the past years.
According to the data from the International Energy Agency, the electric car deployment increased from 0.23 million units in 2013 to 3.29 million units by 2018. Moreover, the value of the NEV cars is also projected to grow at a noteworthy CAGR of 28.04% (Source: Knowledge Sourcing Intelligence), which is also anticipated to positively impact the growth of the market. Also, the increasing focus towards environmental protection is further leading to increasing investments by the government of major developing economies to boost the production of these vehicles. For instance, under the Made in China 2025 program, in which the NEVs are considered as an important part of the program and the goal of the Chinese government is to facilitate manufacturing 1 million electric and plug-in hybrid cars in China by 2020.
In addition, rising investments by automotive manufacturers towards the expansion of their product portfolio, R&D, facility expansions and addition of EVs in their business segment also bolsters the market growth in the coming years. For instance, in May 2018, Daimler’s Mercedes-Benz announced its plan to spend $589 million to manufacture a compact electric vehicle at its 20-year old factory in Hambach, eastern France. The production of this first Mercedes passenger car produced in France will start in 2022. Similarly, in July 2018, Renault also announced to invest $1.2 billion to increase electric vehicle production capacity in France.