On-highway Vehicle Lighting Market Size, Share & Trends Analysis Report By Product (LED, LASER), By Application (Headlights, Interior Lights), By Vehicle Type, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global on-highway vehicle lighting market size was valued at USD 25.67 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of 4.9% from 2021 to 2028. The increasing penetration of LED lighting in the automotive industry coupled with growing sales of passenger cars and commercial vehicles is expected to drive the market growth over the forecast period. Moreover, government authorities and agencies across the world have been drafting effective regulations regarding the use of lighting systems in vehicles, which are anticipated to create significant growth opportunities for players operating across the value chain of the market.

Low visibility, particularly during the night time, has been a significant reason behind the increasing number of road accidents worldwide. A strong emphasis is being put on the vehicle headlights' performance as research continues to expose safety concerns. For instance, given the effects of unfavorable weather conditions on forward visibility, the European Union (EU) has mandated the use of Daytime Running Light (DRL). As such, 17 countries in the EU have drafted effective legislation related to installing DRLs in vehicles. In Canada, the Motor Vehicles Safety Act (MVSA) mandates the use of DRLs in all vehicles used in the country.

The adoption of LED lighting has gained traction in several industries and they have aligned with the plummeting LED costs over the past decade. LED lamps are used in automobiles owing to various reasons. Apart from consuming lesser energy and offering better durability and controllability, LED lamps can deliver instant brightness and cool daylight color, thereby improving visibility and reducing the light glare ratio compared to the adaptive high beam lights. Moreover, LED lamps can also be used as Daytime Running Lights (DRLs) and Center High-Mounted Stop Lamps (CHMSL).  

The COVID-19 pandemic has negatively impacted the demand for on-highway vehicle lighting in 2020. The overall automotive production volumes have declined globally on a year-on-year basis, mainly due to the decreased production volumes in North America and Europe, among other regions. The dwindling sales of passenger and commercial vehicles have had a subsequent impact on the market growth. The automotive lighting industry also had to face production delays and issues in raw material supplies owing to looming delays in international export and import shipments. However, as governments begin to gradually relax the lockdown norms and allow businesses to operate with mandates of social distancing, the market can expect a period of respite for the short-term due to the growing demand for cars from the middle-class population.   

Product Insights

The LED segment dominated the market and captured around 40% of the on-highway vehicle lighting demand in 2020. The segment is estimated to register a CAGR exceeding 5% over the forecast period owing to the growing demand for LEDs for passenger cars, especially in countries such as China, Germany, the U.K., and India. LED lamps can deliver instant brightness and cool daylight color, thereby improving visibility and reducing the light glare ratio compared to the adaptive high beam lights. Moreover, LED lamps can also be used as Daytime Running Lights (DRLs) and Center High-mounted Stop Lamps (CHMSL). For instance, Cadillac CT6 offers a headlight that includes 16 LEDs that flank the headlight in long vertical lines. The 16 LEDs are used as both DRLs and DRL integrated turn-signal indicators.

The LASER segment is projected to record the highest CAGR of over 10.0% over the forecast period owing to the increasing demand for luxury vehicles across the developed and emerging economies. A LASER produces powerful bright light by stimulating gas with a laser beam. The advantage of incorporating LASER technology into vehicle headlamps is its compact size and ability to illuminate a significant stretch of the road compared to other light sources. In general, LASER lights emit around 160-170 lumens per watt, which is much higher than what LEDs emit, i.e. 100-120 lumens per watt.

Application Insights

The headlight application segment captured over 60% of the on-highway vehicle lighting market share in 2020 and is expected to retain its dominance over the forecast period. Headlights form an integral part of an automotive lighting unit. They comprise front headlamps, fog lamps, side lamps, and DRLs. The demand for headlights is driven by the increasing production of motor vehicles and the changing prices of light sources used in these vehicles, such as halogen, HID, LED, and LASER. Moreover, continuous advancements in technology focusing on headlamp designs to offer long-range visibility in low-light conditions are also fueling the market growth.

The interior lights segment is projected to record the highest CAGR of around 5.0% over the forecast period owing to the increasing use of LEDs in internal lights. The growing awareness about energy efficiency and declining prices of LEDs have attracted more consumers toward ambient lighting. Ambient lighting is the soft illumination around door handles, instrument clusters, footwells, and dashboards.

Vehicle Type Insights

The passenger car segment accounted for the largest revenue share of over 40% in 2020 and is anticipated to maintain its dominance over the forecast period. The segment is estimated to record the highest CAGR during the forecast period, owing to the increasing vehicle fleet and vehicle per capita globally. Passenger cars occupied the majority share of over 70% of total vehicle production in 2020. In Europe, according to ACEA, vehicles per capita were recorded at 569 vehicles per 1,000 inhabitants in 2019. Besides, emerging economies such as China and India are expected to further escalate the market growth over the forecast period.

The heavy trucks segment is projected to expand at the second-highest CAGR around 5% from 2021 to 2028. The growth can be attributed to the increasing demand for heavy trucks across the logistics and transportation sectors. According to OICA, global heavy truck production witnessed a rapid increase of over 5% in 2020, reaching 4.4 million units. Asia Pacific accounted for over 80% of the global heavy truck production in 2020, followed by North America.

Regional Insights

Asia Pacific accounted for the largest revenue share of over 50% in 2020 and is expected to retain its dominance over the forecast period. It is projected to register the highest CAGR from 2021 to 2028, owing to the increased demand for passenger vehicles in emerging economies such as China and India. According to the OICA, over 91 million new passenger and commercial vehicles were registered or sold globally in 2019. Of this, over 48% of the global total were sold in Asia. This has led to a significant surge in demand for on-highway vehicle lighting in the region.

Europe is estimated to register the second-highest CAGR of over 5% over the forecast period. Germany produced over 15% of Europe’s overall motor vehicle production. The country is home to motor vehicle manufacturing leaders such as Audi, BMW, Ford, Mercedes, Porsche, and Volkswagen. Besides, in the U.K., the government has banned the aftermarket of HID lighting kits used to covert standard halogen lamps to standard HID xenon headlamps. This has opened potential opportunities for LED light sources, thereby fueling the market growth.

Key Companies & Market Share Insights

Some of the key players in the market are KOITO MANUFACTURING CO., Ltd., Marelli Automotive Lighting, Valeo, Koninklijke Philips N.V., and Zizala Lichtsysteme GmbH (LG Electronics). Organic growth remains the key strategy for the overall industry, with a focus on mergers and acquisitions to expand presence and product offerings. For instance, in February 2020, KOITO MANUFACTURING CO., LTD. announced the acquisition of the shares of Cepton Technologies, Inc., a manufacturer of LiDAR for autonomous driving vehicles and advanced driver assistance systems. The acquisition would allow the company to accelerate the commercialization of high-performance LiDAR.

Market players are also focusing on product launches aimed to expand product offerings and to meet consumer demands. For instance, in November 2020, Optronics International LLC announced the launch of eight LED utility and work lights. The LED lamps are available in different sizes and shapes and come in retail packages and bulk. Some prominent players operating in the global on-highway vehicle lighting market are:

• KOITO MANUFACTURING CO., LTD.

• Koninklijke Philips N.V.

• Marelli Automotive Lighting

• Valeo

• Zizala Lichtsysteme GmbH (LG Electronics)

• TYC Genera

• Spyder Auto

• Maxxima

• Optronics International LLC

On-highway Vehicle Lighting Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For this study, Grand View Research has segmented the global on-highway vehicle lighting market report by product, application, vehicle type, and region:

• Product Outlook (Revenue, USD Million, 2016 - 2028)

  • Halogen

  • HID

  • LED

  • Incandescent

  • LASER

• Application Outlook (Revenue, USD Million, 2016 - 2028)

  • Headlight

  • Exterior Lights

  • Internal Lights

• Vehicle Type Outlook (Revenue, USD Million, 2016 - 2028)

  • Motorcycle

  • Passenger Cars

  • Buses

  • Light Trucks (Class 1-3)

  • Medium Trucks (Class 4-6)

  • Heavy Trucks (Class 7 & 8)

• Regional Outlook (Revenue, USD Million, 2016 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • Rest of Europe

  • Asia Pacific

    • China

    • Japan

    • India

    • Rest of Asia Pacific

  • Latin America

    • Brazil

    • Mexico

    • Rest of Latin America

  • Middle East & Africa (MEA)