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Overview
The Catalytic Converter market size is forecast to reach $ 76.24 billion by 2025 growing at a CAGR of 8.21% during the forecast period 2020-2025. The Growth of Catalytic Converter industry can be attributed to the phenomenal growth of automotive market, increasing adoption of gas and pollutants filters and rising stringency in Vehicle emission control norms. Significant focus of automotive OEMs towards the production of low-cost and low-emission catalytic converters for the exhaust system coupled with high investments in R&D is expected to propel the growth of Catalytic Converter Market. Furthermore, rising demands of population for performance aftermarket automotive parts, particularly in the internal combustion engine will also aid the growth of the catalytic converter market during the forecast period.
Key Takeaways
- Catalytic Converter market is growing at the highest rate in Asia Pacific followed by North America and Europe owing to the rising requirement of emission controlling products.
- Palladium and Rhodium are the preferred type of materials that are used for the manufacture of catalytic converters which accounts for 80% of the category share.
- Stringent emission and fuel efficiency regulations implemented by governments of various nations is expected to fuel the growth of catalytic converter market.
- Associated high cost of the raw material may create hurdles for the catalytic converter market.
Type - Segment Analysis
On the basis of type, Selective
Catalytic Reduction segment has been analyzed to grow at the highest CAGR of
6.34 % during the forecast period 2020-2025. The SCR technology offers benefits
including enhanced NOx reduction than LNT by nearly 90%, and hence, it is
mostly preferred in diesel vehicles across the globe. SCR has maximum
installation rate in European and North American countries owing to the ongoing
emission norms such as Euro 6 and Tier 3 respectively. Europe has a large adoption
rate of diesel passenger cars and LCVs. Thus, it has a higher installation rate
of SCRs compared to other regions. Moreover, owing to the ongoing and upcoming
stringent emission norms in developing countries such as China, India, and
Thailand, the demand for SCRs is expected to increase significantly across all
diesel vehicle types during the forecast period.
Application - Segment Analysis
By vehicle type, the Passenger Car segment is expected to dominate the Catalytic Converter Market with the highest CAGR of 7.52% during the forecast period 2020-2025 owing to its largest share in vehicle production all over the world. An increase in the sales of passenger cars would lead to an increased demand for automotive catalytic converter units. APAC has a low penetration rate for various aftertreatment devices compared to Europe and North America which is estimated to provide growth opportunity for catalytic converter in the APAC region. The growth of the passenger car market of China and India is driving the market for automotive catalytic converter in these countries.
Geography - Segment Analysis
The Asia-Pacific region is
estimated to contribute to the majority of shares in the catalytic converter
market accounting for 52.46 % during the forecast period 2020-2025. The
Asia-Pacific has the largest share of vehicle production with about 54–56% of
the total vehicle production. Within that global sale of cars accounted for
78.6 million in 2018 of which 39.3 million were sold in APAC. China, India, and
Japan are the largest vehicle production hubs because of rising urbanization,
increasing GDP, and industrialization among others. With the growing vehicle
production, vehicle emissions have also increased significantly. Considering
this, few countries such as China, Japan, and India have implemented vehicle
emission norms. For instance, China and India are currently running on China IV
and BS IV. However, they are planning to implement China VI and BS VI by 2020
which is equivalent to Euro VI. Moving toward strict emission norms will create
a huge demand for various aftertreatment devices. In APAC region, China and
Japan are the leading countries for the market, by aftertreatment device.
Drivers – Catalytic Converter Market
·
Rising penetration of
downsized commercial vehicle engines to drive Catalytic Converter Market growth.
The imposition of stringent emissions regulations and increasing demand for fuel-efficient vehicles are driving commercial vehicle manufacturers to downsize heavy engines of commercial vehicles with advanced turbochargers to increase engine output considerably. OEMs are making engines that partly deactivate the cylinders to reduce fuel consumption during operations. Commercial vehicles with downsized engines are equipped with advanced after-treatment systems that include better and more expensive catalytic converters, systems that increase the rates of exhaust gas recirculation, and denser particulate filters .These factors will lead to the development of better and more advanced catalytic converters capable of regulating the vehicle's emission levels.
· Preference for roadways for freight transportation to aid Catalytic Converter Market.
The increased demand for transporting freight through roads are leading freight operators to increase their fleet of commercial vehicles which in turn boost the demand for Catalytic Converters. For instance, according to U.K’s Domestic Road Freight Statistics Report 2018, Goods moved in the UK by GB-registered heavy goods vehicles (HGVs) by end of December 2018, increased by 3% to 152 billion tonne kilometers compared with the previous year. Increased global urbanization rates lead to a trend of increased consumption in an economy. About 58% of the global population resided in urban and semi-urban areas in 2018.
Challenges – Catalytic Converter Market.
· Emergence of electric vehicles may hamper the Catalytic Converter Market growth.
The global automotive catalytic converter market is a derived market as the growth or decline of the market depends on the number of passengers and commercial vehicles (including LCVs and MHCVs) sold. All internal combustion vehicles must have a catalytic converter for treating harmful gases that are a result of combustion. The increasing ownership of electric vehicles over internal combustion vehicles poses a challenge to the Catalytic Converter Market growth.
Market Landscape
Expansion, new product development, partnership, along
with mergers & acquisitions are the major strategies adopted by the key
players in the Catalytic Converter Market. The catalytic converter market is
dominated by the global players and comprises several regional players. Some of
the key players in the market are Faurecia (France), Tenneco (US), Continental
(Germany), Eberspächer (Germany), Johnson Maththey (UK), Umicore (Belgium),
Futaba (Japan), BAEF (Germany), CDTI Materials (US), and Benteler International
(Austria) among others.
Product Launches / Collaborations / R&D activities
- In November 2017, Faurecia announced the launch of a new electrically heated catalytic converter which is poised to debut in 2019. The major feature of the new converter is an electric heating system that raises the efficiency of the catalyst even when the engine is cold or idling in traffic.
- In December 2017, Tenneco Automotive India announced an investment of Rs 50 crore in new Sanand plant. Tenneco set up its first high level sub-assembly plant at Sanand for exhaust systems to service Ford India in the vicinity, at a cost of Rs 20 crore.
- In February 2018, Diversified Environmental Catalysts Inc. (DEC) announced Acquisition of PaceSetter Exhaust Systems. The new alliance will enhance DEC’s research and development of new products, cementing its current positions as the go-to companies for first-to-market, highest quality aftermarket exhaust products, and direct fit catalytic converters.