The global automotive exhaust aftertreatment systems Market is expected to register a CAGR of over 18.5%, during the forecast period, 2020 - 2025.

An increasing number of flaws in exhaust systems, the rising automotive share of greenhouse emissions, and stringent regulatory norms levied by EPA and emission authorities in emerging automotive markets, like India, etc., act as major propellants of the market growth, globally.

Technical difficulties, such as high pressure to force the exhaust through the filtering system, unavailability of these systems for biodiesel, passive regeneration system requiring highway driving to clean the accumulated soot and complicated set-up for urea injection have acted as barricades for the market growth. However, on the bright side, recovering global automotive industry and growing production sites in developing nations, such as Mexico and India are opening up new opportunities for the market growth by 2025.

Key Market Trends

Stringent Emission Regulations Driving the Market

The demand for diesel engines is expected to witness a positive growth from the rise in commercial vehicle sales, owing to the growing construction industry and developing logistics market (primarily due to the rise in the e-commerce business).

The emission standards for diesel engines are becoming more stringent gradually and have forced manufacturers to develop advanced exhaust aftertreatment systems.

For instance, according to Eurostat, over 75% of inland cargo transports within the European Union (i.e., about 1,750 billion metric ton-kilometers (tkm)) travel by road. In some European countries, this percentage goes as high as 90% or more.

  • As a result, the demand for commercial vehicles has been continually increasing in the region, owing to growth in the logistics industry.

    The Government of India announced to skip BS-V and leapfrog to BS-VI emission norms by 2020, opening up new opportunities for the exhaust aftertreatment system market in the country. Strong economic growth in Asia-Pacific has increased the purchasing power of consumers in the region.

    Majority of the diesel engines are able to convert in between 40% to 46% of the fuel energy, while the remaining is lost in the environment as heat, through exhaust emissions, and cooling systems.

    With the enactment of Euro VI emission for heavy-duty engines, the burden on commercial vehicle manufacturers has increased.

    Asia-Pacific Market Growing at a Faster Pace

    As of 2019, Asia-Pacific dominated the global market with China emerging as the largest automotive destination, with major OEMs setting up manufacturing plants in the country. Government is playing a pivotal role in the shift toward electric vehicles. To cut carbon emission and reduce dependence on non-renewable sources of energy, governments of various countries have implemented programs to boost the electric vehicle infrastructure and are supporting with funds for manufacturers to set up new factories and encourage customers to purchase.

    China is the world’s largest automotive market, accounting for more than 32% of the global passenger vehicle sales and 15% of the global commercial market sales.

    China targets a reduction of 50% for hydrocarbons, 40% for Nitrogen Oxides (NOx), and 33% for particulate matter over Euro 6 Levels. New gasoline vehicles in China are made mandatory to meet the regulations.

    There has been tremendous growth in demand for electric cars across the world. China led the market with a 102% growth between the first quarters of 2015 and 2016.

    Owing to an issue in the exhaust system, Volkswagen in the United States has recalled more than 84,000 units of its Passat models.

    Similarly, several leading automakers, such as Audi, Chevrolet, Honda, among others, have also recalled few of their models under the same issue. This move has created a negative impact on the market.

    Competitive Landscape

    Some of the major players dominating the market are CDTi Advanced Materials Inc, Delphi Technologies PLC, Continental Reifen Deutschland GmbH, and Tenneco Inc., Donaldson Company, Inc. among others. The companies are planning to tap the market by introducing or expanding their product portfolio. Growing pressure from emission regulation authorities has forced manufacturers to come up with new technologies, which reduces the emission of polluting gases from the exhaust. This made the manufacturers increase R&D spending, to manufacture better exhaust aftertreatment technologies.

    The increasing number of suppliers of exhaust aftertreatment systems and their joint ventures with local suppliers putting emphasis on expanding their presence resulted in improving production capacity.

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