The global automotive AHSS (advanced high strength steel) market size is projected to reach around USD 33.95 billion by 2027, registering a CAGR of 13.3%.
North America was the highest revenue contributor, accounting for USD 4.70 billion in 2019, and is estimated to reach USD 11.57 billion by 2027, with a CAGR of 12.3%. Asia-Pacific is estimated to reach USD 10.91 billion by 2027, at a significant CAGR of 14.9%. North America and Asia-Pacific collectively accounted for around 64.6% share in 2018, with the former constituting around 36.2% share. Asia-Pacific and Europe are expected to witness considerable CAGRs of 14.9% and 14.1%, respectively, during the forecast period. The cumulative share of these two segments was 49.9% in 2018 and is anticipated to reach 55.7% by 2027.
Advanced high strength steel is a special form of steel, which has a wide application in the automotive industry due to various features such as its microstructures and high tensile strength. It is a new generation of steel grade, which possesses ultrahigh strength and is widely applicable in automobile and other industries such as construction. In the automotive industry, the adoption of AHSS allows automakers and engineers to ensure complete safety, efficiency, manufacturability, durability, and quality of vehicle at a significantly low cost.
It also helps in the reduction of weight of a vehicle to a large extent, which has supplemented the growth of the Automotive AHSS (advanced high strength steel) market. In addition, adoption of advanced high strength steel helps in the reduction of harmful emissions from vehicles by reducing the weight, leading to less fuel consumption, thereby ensuring complete safety to the environment.
Factors such as increase in vehicle production and rise in demand for lightweight automotive components drive market growth. However, factors such as availability of substitutes in the market is supposed to hamper its growth. Further, factors such as continuous growth in automotive industry and increase in need to curb CO2 emissions is expected to create numerous opportunities for the growth and expansion of the market.
The automotive advanced high strength steel (AHSS) market is segmented on the basis of product, application, vehicle type, and region. By product, it is segmented into transformation induced plasticity (TRIP) steel, complex phase, dual phase steel, and others. By application, it is categorized into structural assembly and closures, bumpers, suspension, and other applications. On the basis of vehicle type, it is classified into passenger vehicles and commercial vehicles. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Key players includes AK Steel Holding Corporation, ArcelorMittal SA, Baoshan Iron & Steel Co. Ltd., Kobe Steel Ltd., Nucor, POSCO, SSAB AB, Tata Steel Ltd., ThyssenKrupp AG, and United Steel Corporation account for a major automotive AHSS (advanced high strength steel) share.
Increased Vehicle Production
The increased vehicle production across the globe has supplemented the advanced high strength steel (AHSS) market as the automotive industry is one of the largest key users of AHSS. The increased demand for better and efficient vehicles which are lighter in weight as well as are equipped with strong components has made the manufacturers to develop high strength steel for the application in automobiles. Also, the rise in disposable income of individuals across the globe has led to the increased demand for light weight vehicles which supplements the market growth. Thus, the increased vehicle production boosts the demand for automotive advanced high-strength steels (AHSS) to manufacture multiple identical parts to be mass produced efficiently and effectively with highest specifications thereby leading to the growth of the market.
Increased Demand for Lightweight Automotive Components
Automotive manufacturers have focused on designing lightweight vehicles with an aim to provide passenger safety, reduce greenhouse gas emissions, increase fuel economy, and facilitate balanced performance. Advanced high-strength steel is a lightweight component, which offers thinner gauges, reduces the vehicle weight by 30–40% by decreasing vehicle mass, and meets crash safety standards. North America has witnessed a high penetration of lightweight steel, particularly AHSS, owing to increased demand for lighter and stronger vehicles. Moreover, the adoption rate of AHSS in Asia-Pacific is growing significantly, owing to high demand of lighter and faster vehicles with enhanced safety. In addition, upsurge in demand of fuel-efficient vehicles from the end customers fuels the need for deploying advanced high-strength steel while manufacturing that meets fuel-efficient standards. For instance, the Corporate Average Fuel Economy (CAFÉ) standards from the U.S. are designed to drive the incremental fuel economy gains in the U.S. automotive market.
Furthermore, replacing cast iron and conventional steel components with AHSS directly reduces chassis weight by 50% which minimizes vehicle's fuel consumption. Thus, the increased adoption of lightweight automotive components supplements the growth of automotive advanced high strength steel (AHSS) market thereby increasing the application in automotive industry.
Availability of Substitutes in the Market:
Aluminum, magnesium, and carbon fiber composite are some of the other materials that are widely used in a vehicle's chassis and body structure. The use of aluminum in an automobile reduces the weight of the vehicle body. Moreover, low density and high energy absorption performance offered by aluminum are the important properties, which fuel its adoption. This leads to the replacement of advanced high strength steel (AHSS) in a vehicle's body, particularly for chassis, thereby hampering the growth of the market.
Continuous Growth in Automotive Industry
The automotive industry is one of the key end users of the AHSS market. The automotive market is expected to grow at a considerable rate during the forecast period, due to low interest rates and increase in disposable income. The global automotive sales reached record levels in last few years, and this trend is expected to continue in the future owing to the increased demand for light weight and fuel efficient vehicles. A German supplier, Continental Automotive estimates that the global production of cars and light trucks will grow slightly in the near future which increases the demand for AHSS. The increase in sales is being witnessed significantly in North America, Asia-Pacific, and LAMEA, while moderate growth is witnessed in Europe. Although penetration of these automobiles into households has increased over the past decade, there is scope for further gains as the middle classes in these countries are expanding. Thus continuous growth in automotive industry supplements the growth of advanced high strength steel to be used in automobiles eventually leading to the market growth.
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