Global camshaft market to register 4.5% CAGR till 2028, India among high-growth markets

by Autocar Pro News Desk , 16 Jul 2018

Pune-based Bharat Forge has a crankshaft machining capacity of over a million units per annum.

Here’s some good news for the Indian automotive component industry. As per a new market study, India has been earmarked as one of the high-growth markets for automotive camshafts, even as global demand for the product is set to grow, despite the recent charge of electric vehicles.  

EVs are seen as the latest disruption in the automotive industry that may likely impact demand for the internal combustion engine and in turn the engine auto parts ecosystem. If market demand for the internal combustion engine crashes, the demand for ancillary products such as camshafts is bound to follow suit. What this means for the automotive camshaft market is decreased product requirement in the global market, thereby leading to a significant loss in revenue.

Nevertheless, considering the popularity of EVs with respect to sustainability and environment friendliness has come to the forefront only since the beginning of the 21st century and while leading automobile manufacturers strive to innovate in their EV product offerings, the good old internal combustion engine continues to hold sway in the global automotive industry. As a result, the demand for automotive engine parts such as camshafts is still on a relatively stable growth path.

Future growth to be driven by developing and emerging markets
In a new study on the automotive camshaft market, analysts at Future Market Insights predict a 4.5% growth rate in terms of value for automotive camshafts in the coming decade. The global automotive camshaft market is projected to reach a valuation of about US$ 4 billion (Rs 27,438 crore) by the end of 2028. This growth will be primarily driven by the increasing number of passenger cars used for recreational purposes, growing purchasing power of the middle class in developing economies, and the availability of capital for expansion of manufacturing facilities in mature and emerging markets.

With manufacturing fast moving towards Industry 4.0 governed by the Industrial Internet of Things (IIoT), there is an increasing thrust on cyber-physical computing systems in the global automotive industry. Camshafts play a crucial role in gathering data pertaining to process control that helps monitor vehicle performance, and manufacturers – to ensure compliance with the new standards of Industry 4.0 – are shifting to the production of sensorised components and mechatronic products to facilitate the integration of digitalisation with traditional manufacturing processes.

In 2017, global sales of automotive camshafts was pegged at 166,673 ‘000 units. The global and Americas automotive camshaft market is estimated to be valued at US$ 2,861.2 million by the end of 2018 and is expected to reach US$ 4,462.2 million by the end of 2028 while expanding with a CAGR of 4.5% over the forecast period. As such the total automotive camshaft market is expected to represent an incremental opportunity of US$ 1601.1 million between 2018 and 2028. In terms of volume, it is estimated to reach 256,119 ‘000 units by 2028 while exhibiting a CAGR of 4.1% over the forecast period.

Cast camshaft segment to register significant value and volume CAGR
The automotive camshaft market is mainly driven by increasing demand for passenger cars and commercial vehicles in the emerging economies of the world. Growth in the sales of passenger cars and commercial vehicles will directly impact the market. Furthermore, growth being witnessed in the sales of cast camshaft segment will help drive growth over the forecast period.

Moreover, due to increasing investments for the development of infrastructure, especially in Asia Pacific countries, such as India and ASEAN, the production of heavy trucks and trailers has also increased. Thus, increasing vehicle fleet size will drive the automotive camshaft market over the forecast period. Apart from this, the OEM automotive camshaft market is a consolidated market and Tier-1 players hold significant share in the market.

Lucrative growth of the automotive industry will fuel the demand for automotive camshafts in the market, which in turn, will encourage manufacturers to expand their production facilities for automotive camshafts. Moreover, laidback availability of capital for expansion of existing manufacturing facilities as well as for the development of new manufacturing facilities for automotive camshafts in the developing regions to meet the demand for automotive camshafts from the automobile industry is expected to fuel the growth of production volumes of automotive camshafts in these regions.

In 2016, the expected demand for passenger vehicles camshafts was around 121.1 million units. This demand for automotive camshafts is projected to grow alongside growth in demand for light commercial vehicles.

OEM segment to register high-value growth
The OEM segment is expected to drive the growth of the automotive camshaft market. Owing to their durability and high strength, the replacement rate of automotive camshafts is low. Currently, camshaft manufacturers are focusing on producing lightweight and more durable products, which will increase the lifespan of automotive camshafts as well as automobiles. This will increase the OEM segment share in the automotive camshaft market. The OEM segment is expected to grow at a CAGR of 4.6% in terms of value. Moreover, this segment accounted for approximately 88.7 percent market share in 2017, in terms of volume, and is estimated to grow at a significant CAGR.

China to remain dominant player, India and MEA slated to be high-growth markets
The China automotive camshaft market accounted for a value share of 25.3% in 2017 and is forecast to maintain its dominance due to an increase in production of passenger cars, heavy trucks and trailers in the region. The India and MEA automotive camshafts market are projected to represent US$ 101.1 million and $ 103.8 million incremental  opportunity respectively between 2018 and 2028, while the Americas automotive camshaft market is estimated to expand at 3.9% CAGR, in terms of value, and create a $ 319.5 million incremental opportunity in the during the forecast period.

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