In 2021, the global automotive oil pressure valve market is expected to be worth US$ 2 billion. By the end of 2022, the market is estimated to have grown to US$ 2.12 billion. During the projection period from 2022 to 2032, the market is expected to reach a value of US$ 3.5 billion, with a CAGR of 5%.
The availability of superior materials and ultramodern technology in the automobile industry has resulted in a significant increase in the average age of the vehicle. Automotive oil pressure control valves have been more prone to wear and tear as vehicles have gotten older, resulting in a greater need for replacements and, as a result, a higher demand for them.
The most lucrative markets have been recognised as China, India, Brazil, Mexico, and Indonesia, among others. The market’s current opportunities can be attributable to decreasing capital and labour costs. As a result, established businesses are concentrating on relocating their manufacturing plants to the aforementioned emerging areas.
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Rising purchasing power and increased disposable income in developing countries are likely to surge sales of automotive in the region, thereby, spiking the demand for automotive oil pressure control valves considerably. In 2017, Audi AG, an eminent entity in the automobile sector, began the production Audi Q5 in San Jose Chiapa, Mexico. The initiative presented various opportunities for expansion to the automotive oil pressure control valve in the market.
How is the Rising Production of Commercial Vehicle Boosting the Market?
The increasing demand for fuel-efficient and lightweight vehicle components and the growing production of commercial vehicles across the globe is expected to be the key factor propelling the demand for automotive oil pressure control valves. Besides, governments across various countries have implemented various regulations that support the growth of commercial vehicles, thereby, surging demand for automotive oil pressure control valve control.
The Federal Motor Carrier Safety Administration in the United States was established to control injuries and fatalities to commercial vehicles. Owing to such initiatives, the manufacturing of commercial vehicles is expected to increase, consequently, benefitting the market in the forecast period.
In addition, the Government of India is encouraging FDIs through various courses in the automotive sector which is likely to benefit the market and augment the production of automotive oil pressure control valves.
How is Increasing Popularity of EVs Impeding the Market Growth?
The growing popularity of EVs has hampered the market significantly since electronic vehicles do not require automotive oil pressure control valves, limiting the market growth. Countries across the globe are encouraging manufacturers to switch to EVs owing to the rising environmental concerns, thereby, reducing demand for automotive oil pressure control valves.
Governments are offering various incentives to manufacture the battery of EVs. For instance, the Government of India announced that it may reduce the Goods and Services Tax (GST) on e-vehicles from 12-15%. In another instance, the South Korean government announced that it will offer US$ 900 Million tax exemptions on EVs. In other news, all-electric and plug-in hybrid cars purchased new in or after 210 would be eligible for a federal income tax credit of up to US$ 7,500. Owing to such initiatives, the market is likely to suffer significantly.
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How do Favorable Initiatives by the Government of India Promote Market Growth?
As per the analysis, the market in India is anticipated to expand at a CAGR of 2% during the assessment period. In order to support the expansion of the automobile market, the Ministry of Finance announced a deduction of corporate tax in 2019. The initiative is likely to attract FDIs in the country’s manufacturing sector, which is projected to develop the automotive market, as a result, boosting the production of automotive oil pressure control valves.
In addition, the Make in India and Automotive Mission Plan 2026 is likely to expand the market considerably. The Automotive Mission Plan 2026 has boosted the market remarkably. In February 2019, the Indian Government approved a fund demand of US$ 1.39 Billion for the financial years 2022-2022 for the FAME-II Scheme. Such initiatives are likely to benefit the market significantly in the coming time.
The growing demand for passenger vehicles, light commercial vehicles in the country are expected to boost the demand for the equipment thereby, supporting the market expansion in the country.
How is Robust Expansion of the Automotive Sector in North America Supporting the Market Growth?
As per the analysis, the market in North America is expected to expand at a CAGR of 3.3% during the forecast period. The U.S., Canada, and Mexico are expected to make the most significant contribution in developing the market in North America. As per the statistics of OICA, the U.S takes the forefront position in the manufacturing of cars and commercial vehicles.
Presence of renowned automotive OEMs like Honda Motor, Ford Motor Company, Toyota Motor Corporation, Stellantis, among others has played a significant role in positioning Canada as one of the strongest players of the region. The exemptions of tariffs on imported passenger vehicles under the Trans-Pacific Partnership trade are expected to boost the market significantly.
Mexico is one the fastest-developing markets, contributing considerably to the GDP. As per the International Trade Administration, Mexico is the sixth largest passenger vehicle manufacturer in the world. Owing to the aforementioned factors, the market in North America is projected to propel notably.
Market Competition
Key players of the global automotive oil pressure control valve market include Danfoss Group, Mitsubishi Electric Corporation, Parker Hannifin Corporation, Burkert Corporation, Rotex Automation, and SMC Corporation of America.
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