The rising number of vehicle accidents, new product introductions, and increase in the total vehicle population will drive growth for manufacturers of replacement lighting in the coming years. Collision replacement will account for the majority of revenues in this market, but manufacturers are also making gains selling brighter bulbs to improve the safety of nighttime driving.
"Automotive lighting systems seem to be evolving away from incandescent and halogen bulbs to LEDs and HID lighting," said Frost & Sullivan Research Analyst Stephen Spivey. "It is happening slowly, but some day there will be no more light bulbs in cars and trucks.
This change will present opportunities for aftermarket manufacturers to introduce new lighting products that capture the imaginations of vehicle owners and set themselves apart from their competitors, said Spivey.
Automakers are deploying LEDs and HID lighting in greater quantities as standard equipment on new vehicle models. Common for several years in the center high-mounted stop light (CHMSL), LEDs are now found increasingly in tail lights, turn signals, and in interior applications like dome lights and dashboard lights.
The shift to LEDs and other lighting technologies will present strategic challenges for manufacturers of standard replacement parts. LEDs and HID bulbs have a much longer service life than traditional lighting sources, which could eliminate the need to replace lighting components for many vehicle owners.
Manufacturers will need to make key investments in technology and new product development over the medium to long term in order to remain competitive.
"Upgrading production capacity to compete in LEDs will be vital to future aftermarket sales as the number of LEDs carried by new vehicles continues to rise and the number of standard bulbs carried by new vehicles continues to decline," explained Spivey.
"In addition, suppliers must understand how to use the LED platform to develop innovative products that cause people to want to replace their factory-installed LEDs with an aftermarket product. Without both of these capabilities, manufacturers of incandescent and halogen lighting will see their markets get smaller over time."
The largest manufacturers of aftermarket lighting have already taken the lead on the shift to LEDs. Osram Sylvania Inc. produces its own LEDs through its Osram Opto Semiconductors subsidiary, while Philips Automotive Lighting formed a joint venture last year with LED maker Lumileds Lighting (Philips subsequently acquired control of Lumileds).
Spivey says that partnering with companies that have the capital and knowledge to produce LEDs, or pooling resources with companies in other industries that are also deploying them, may offer the best opportunity for smaller lighting manufacturers to compete in the automotive aftermarket.
Frost's North American Lighting Aftermarket report (F332) is segmented into forward exterior lighting, rear exterior lighting, bulbs, interior lighting, auxiliary lighting and specialty lighting.