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The global automotive active grille shutter system market size was USD 1.74 billion in 2020. The market is projected to grow from USD 1.77 billion in 2021 to USD 2.36 billion in 2028 at a CAGR of 4.16% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with the AGS system witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of -7.54% in 2020 compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Active grille shutter system or radiator shutter assembly system is an advanced mechatronics system designed to control the airflow in real-time through the automatic opening and closing technology. An AGS system is various technologies designed to improve vehicle aerodynamic drag while generating significant fuel savings. Radiator shutter assembly enhances the vehicle's aerodynamics to reduce air drag and load on the engine, resulting in higher fuel efficiency and lower emissions.
Halt in Automotive Production to Hamper Growth amid COVID-19
The global COVID-19 pandemic had a significant impact on the global automotive sector. COVID-19's rapid spread has severely disrupted both value and supply chain players. Starting in China, suppliers worldwide shut down production lines completely. Furthermore, restrictions on international trade and widening demand-supply gaps posed as a major roadblock. Due to this, there was a significant delay in completing previous orders. OEMs are halting their production due to a shortage of components and just-in-time manufacturing strategies that includes quarantine and reduced staff. This is increased by the need to secure liquidity and eliminate overproduction due to lower sales. Due to mandatory stay-at-home orders in various countries, consumers' inability to purchase vehicles, along with production halts and volume reductions by customers, significantly impacted this market, particularly in the first half of 2020. According to OICA, in 2020, global light vehicle production fell by 17%, with declines of 20% and 23% in the two major markets that is North America and Europe, respectively. Despite a small drop in sales at the onset of the global COVID-19 outbreak, EV demand remains high, and sales are rising. The market is projected to expand significantly in the future, owing to increased vehicle sales, enhanced features, and advanced technology development by car OEMs. A higher disposable income has a positive impact on the market's growth.
Magna International and Rochling Group saw a significant decline of around 15-17% in revenue during the pandemic period. Although the nature of the pandemic is highly uncertain, the arrival of vaccines in early 2021 benefited the automotive sector, creating new opportunities for the market.
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Increase in Purchase of Electric and Hybrid Electric Vehicles to Boost Market
Through the move from conventional to electric transportation, intelligent mobility and electrification are reshaping the future of mobility. Several automobile manufacturers currently prefer AGS systems in their electric vehicle models. For instance, Daimler, Hyundai, General Motors, Tesla, and Toyota offer radiator shutter assembly in Optima, C-Class, Cruze, Model S, and Camry models. The AGS system is now primarily used in luxury vehicles and electric vehicles. As a result, as demand for electric cars and high-end cars increases, the market will grow.
Market to Experience Upward Growth Trend Backed by Rising Automotive Production
Automotive active grille shutter systems are standard fitting in luxury and mid-class passenger cars and sports vehicles. Moreover, with an increase in the number of models and new types of cars entering the market, the demand for the automotive active grille shutter system is expected to increase significantly. Furthermore, expanding middle-class population base, rise in household income levels, and increasing urbanization will cause a surge in vehicle sales, augmenting the market growth.
Increasing Demand for Fuel-Efficient Vehicle and Growing Trend for Modern Aesthetic in Vehicles to Drive Market Growth
The increasing need for fuel-efficient vehicles anticipates the automotive active grille shutter system market. AGS systems can reduce CO2 emissions by up to 3 grams per km. and cut down air drag by 9% on average, which equals 25 aerodynamic points, thereby increasing the aerodynamic co-efficient. Tightening emissions regulations by governments encourage automakers to adopt technologies that help lower the air drag and minimize emissions. For example, in the U.S. and several EU countries, the respective governments had aimed to bring down emission levels for passenger vehicles to 121 g/km and 95 g/km, respectively, by 2020. Such regulations could boost technology adoption in the forthcoming years.
High Cost of Technology Associated With Production of Product May Hamper Market Growth
The key challenge faced by the market is the high cost of an automotive active grille shutter system. Consumers do not prefer a car integrated with an AGS system in underdeveloped economies. Furthermore, low segments vehicles opt for the diffuser, underbody panels, and spoilers which are a cost-effective solution to control air drag. Hence, low segment vehicle consumers don't prefer the AGS system due to high cost impacting the automotive active grille shutter system market growth.
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Horizontal Vane Type Dominates the Market Owing to Easy Installation
The market share is split into horizontal vane type and vertical vane type based on vane type.
The horizontal vane type segment will dominate the market share globally through 2028. Horizontal AGS systems are easy to install as they are positioned immediately below the grille and are widely used.
The vertical vane type segment witnessed high growth and low penetration during 2020. The vertical vane segment accounted for 33.42% share of market in 2020. Due to improved performance/tunning capability and increased preference for high-end automobiles due to their high aesthetic value, the segment will grow during the forecast timeframe.
Passenger Vehicle Segment to Dominate Led by Rising Passenger Vehicle Adoption
The market is separated into two types of vehicles: passenger cars and commercial vehicles.
The passenger car segment holds the largest share globally in this market and will continue to dominate during the forecast period. Due to rising individual disposable income, the rising production and sales of passenger cars in developing countries will push this segment's market growth. The passenger car segment accounted for a market share of more than 70.60% in 2020. AGS demand in the passenger car segment is likely to rise as AGS penetration increases in passenger car models.
On the other hand, the commercial vehicle segment will witness steady growth during 2021-2028. It is attributed to several governments' worldwide initiatives aimed to reduce Co2 emissions and commercial vehicle consumers looking for fuel-efficient vehicles.
North America Automotive Active Grille Shutter System Market Size, 2020 (USD Billion)
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North America Account for the Largest Market Share Due to Stringent Government Regulations for CO2 Emissions
The market size in North America reached USD 0.61 billion in 2020 and is expected to hit USD 0.71 billion by 2028, recording a 2.2% over 2021-2028. The rising stringent government regulations for CO2 emissions, the fast adoption rate of new technology, high expenditure on product innovation, and increased consumer spending are expected to propel the market in North America. The presence of major radiator shutter assembly manufacturers and their effort for designing aesthetic vehicle models contribute to the region's growth. Furthermore, increasing the production of light commercial vehicles in this region is expected to propel the growth of active grille shutter systems.
Europe holds the second-largest position in the automotive active grille shutter system market as the European Commission's stricter emission standards have accelerated radiator shutters in European vehicles. Active grille shutters are offered on some key European models, including the Ford Focus and Fusion, BMW 5 and 7 Series, Renault Twingo and Talisman, Citroen C4 Picasso, and Audi Q7. Furthermore, the presence of important players in this region aids market expansion. Moreover, Consumer adoption of electric vehicles, autonomous vehicles and shared mobility is driving the growth of this market. These factors are likely to fuel market expansion in this region.
APAC stood at USD 0.50 billion and is estimated to reach USD 0.77 billion by 2028 at a CAGR of 5.3% over the forecast period. The Asia Pacific, a major automotive hub, could dominate the market share over 2021-2028. The regional vehicle production is rising exponentially each year. This growth is accountable for increasing preference for personal mobility in the post-COVID-19 period that will boost automobiles and safety components such as active grille shutters. In addition, the introduction of supportive government initiatives and the rising adoption of EVs and autonomous vehicles will strengthen the regional outlook.
The rest of the world contributes very little to this market compared to other regions. It is due to the lack of automotive OEMs and active grille shutter suppliers, low technology adoption, and fewer typed vehicles. However, it is expected to grow in the future at a CAGR of 4.9%.
Strong Portfolio and Vast Distribution Network Has Propelled Magna International Inc, Rochling Group, and Valeo to Lead Market
The market is highly fragmented, with established and emerging players across developed and developing countries. The leading players focus their efforts on developing technologically advanced AGS systems for vehicles.
An Infographic Representation of Automotive Active Grille Shutter System Market
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The active grille shutter system market report provides a detailed analysis and focuses on crucial aspects such as leading companies, product types, and leading product applications. Besides this, the report offers insights into the market trends and highlights vital industry developments. In addition to the obvious variables, the report covers several others contributing to the market's recent expansion.
Value (USD Billion)
By Vane Type
By Vehicle Type
Fortune Business Insights says that the global automotive active grille shutter system market size was at USD 1.74 billion in 2020, and it is expected to reach USD 2.36 billion by 2028.
In 2020, North America stood at USD 0.61 billion.
The automotive active grille shutter system market is projected to grow at a CAGR of 4.16% and exhibit steady growth during the forecast period (2021-2028).
The horizontal vane segment is the leading segment in this market.
Increased vehicle production and increased demand for fuel-efficient vehicles drive the market growth.
Magna International holds the maximum share in the market.
North America dominated the market share in 2020.
Increasing adoption of electric mobility coupled with favorable government initiatives to use lightweight materials and rising government initiatives related to Co2 emissions are expected to drive the business.
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