Automotive Forging Market Size, Share & COVID-19 Impact Analysis, By Vehicle Type (Passenger Cars, Light Commercial Vehicles, Medium & Heavy Commercial Vehicles, Agriculture Machinery, Construction Equipment, and Others), By Material (Steel and Aluminum), By Application (Gears, Crankshaft, Pistons, Axle, Bearings, Connecting Rods, and Others) By Technology (Closed Die, Open Die, and Others) By Supplier Type (Local and International), and Regional Forecasts, 2023-2030

The global automotive forging market size was valued at USD 45.92 billion in 2022. The market is projected to grow from USD 49.11 billion in 2023 to USD 68.17 billion by 2030, exhibiting a CAGR of 4.8% during the forecast period.

Forging is a manufacturing process that utilizes compressive forces to shape metal. Automotive forging consists of engine parts, chassis, bearings, axles, and gears. Depending on the mechanical properties required, the process can be performed on the material. Metal forging produces some of the strongest manufactured parts with high mechanical properties compared to other manufacturing processes.

The demand for lightweight and fuel-efficient vehicles is expected to drive the automotive forging market growth. Forged components possess rigid and strong properties making them ideal for vehicle manufacturing. These properties are driving the global market.

COVID 19 IMPACT

Declined Automotive Production and Sales Hampered Market Growth

The COVID-19 pandemic had a negative impact on the global economy. The pandemic caused the economy to contract sharply, with a negative shock to international demand for almost all forging processed components. The widespread decline in car sales during the pandemic impacted the demand for counterfeit goods worldwide. Additionally, strict quarantine restrictions, a downturn in the auto industry, and factory closures hampered the viability of small and medium-sized automakers in emerging markets. The decline in demand for automotive components negatively impacted the automotive forging industry.

The International Automobile Manufacturers Association (OICA) estimated that car sales in 2020 fell by 13.7% compared to 2019. In addition, volatility in raw material prices during the pandemic due to supply chain disruptions and material unavailability also hit the global automotive forging industry. Rising raw material prices hampered the market growth, especially in developing countries where inflation is very high.

• For instance, in India, in January 2021, hot-rolled steel coil prices in the wholesale market reached USD 710.32 per ton from USD 485.45 per ton in July 2020.

LATEST TRENDS

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Adoption of Smart Manufacturing Technology and Automation to Propel Market Growth

The acceptance of automation and intelligent manufacturing technologies is an ongoing trend in the market. Nearly all the leading players focus on automating their forging lineup to increase operational efficiency, overall productivity, and safety.

For instance, in September 2021, ThyssenKrupp AG started one of the most advanced forging lines in the world. The company established its advanced forging line in Homburg/Saarland. The company invested roughly USD 85 million in its new automotive forging facility for truck chassis components. The flagship of the new highly automated and digitized forging line in Homburg is a 16 thousand-ton forging press measuring nearly 15 meters in height and weighing 1,700 tons. The new line has the capacity to produce 360,000 forged components per year and will be able to make different large-scale products.

Furthermore, the increasing demand for lightweight or reduction in overall weight of a vehicle is also propelling the market growth. Therefore, the adoption of automation and smart manufacturing technologies to improve quality, precision, and productivity in the automotive forging line is anticipated to accelerate the market growth in the near term.

DRIVING FACTORS

Rising Automotive Sales Post-Pandemic to Drive the Market Growth     

Rising urbanization and overburdened public transport, coupled with the increasing number of health concerns among the populace due to the pandemic, influence automotive adoption. Therefore, the increasing preference for private transportation to limit unnecessary social interaction is anticipated to drive automotive sales, further fueling the demand for forged parts and components. Over the past decade, urbanization has been most pronounced in developing regions such as Asia and Oceania. According to the United Nations (UN) Department of Economics and Social Affairs, nearly 68% of the world's population is expected to live in urban areas by 2050.

Additionally, rising disposable income, improving standard of living, and the popularity of driving automobiles among the various age groups are accelerating automotive sales.

• For instance, according to the International Organization of Motor Vehicle Manufacturers (OICA), in 2021, passenger car sales volume increased nearly by 4.6% compared to 2020. Similarly, commercial vehicle sales volume increased by 5.7% compared to 2020.

Therefore, recovery of automotive sales post-pandemic is anticipated to boost the market growth in the coming years.

RESTRAINING FACTORS

Rising Electric Vehicle Penetration to Hinder Market Growth

Automotive manufacturing companies are one of the major buyers of forged metal products and components. Growing environmental concerns, rising government initiatives to promote green mobility, increasingly stringent emissions regulations, and escalating fuel prices drive electrification in the automotive industry. Almost all major automakers focus on developing electric vehicles as economical solutions for future mobility.

However, electric vehicles have lesser mobile and forged parts than conventional vehicles. Therefore, the increasing popularity and acceptance of electric vehicles and increasing electrification in the global automotive industry will likely hinder the market growth during the forecast period. For example, according to the International Energy Agency (IEA), the global sales of electric vehicles in 2021 have doubled compared to 2020, reaching a new record of 6.6 million units. Additionally, various government initiatives offering tax breaks and subsidies for purchasing new electric vehicles are expected to boost EV adoption in emerging markets. EVs are expected to penetrate deeply across vehicle sales worldwide during the forecast period, further slowing the demand for automotive forging products.

SEGMENTATION

By Vehicle Type Analysis

Increasing Number of Forging Parts in Passenger Cars to Propel the Segment Growth

By vehicle type, the market is categorized as passenger cars, light commercial vehicles, medium & heavy commercial vehicles, agricultural machinery, construction equipment, and others.

The passenger cars segment had the largest market share in 2022 and is anticipated to continue its dominance throughout the forecast period. Passenger car production witnessed considerable recovery in 2021, with a 28% and 61% increase in the production of passenger cars in China and India, respectively. The design of mechanical components in electric cars will be much simpler as designers can create significant impacts with simple geometries. Forged aluminum parts perform better than machined or cast parts, increasing reliability. These factors can positively impact the growth of the market.

The construction equipment segment is expected to grow at a significant CAGR from 2023 to 2030. Ferrous forgings are used heavily in heavy construction & off-highway equipment owing to the need for strength, machinability, and toughness. In addition to transmission and engine parts, forgings are utilized for axle beams, gears, wheel hubs, bearing holders, shafts, levers, links, yokes, rollers, and spindles. Therefore, the increasing demand for these automotive forged parts is anticipated to drive the segment growth.

Other segments such as light commercial vehicles and agricultural equipment also saw a positive growth rate during the forecast period. Medium & heavy commercial vehicles production volumes showed positive recovery in 2021. For instance, in key markets such as India, Brazil, the U.S., and Mexico, sales volumes increased by 75%, 101%, 20%, and 22%, respectively.

By Material Analysis

Steel Segment to Dominate Owing to High Production Efficiency and Impact Strength

By material, the market is categorized into aluminum and steel. The steel material in forging dominated the automotive forging market share in 2022. Due to the high forge ability of carbon steel, in particular, along with its impact strength, production efficiency, and economic utilization, the demand for carbon steel is high in the automotive industry, possibly fueling the market growth during the forecast period. Vehicle weight reduction is one of the many factors that affect fuel economy and performance.

Aluminum in automotive forging is the fastest-growing segment throughout the forecast period as the aluminum usage in the automotive industry increased from 154 kg per vehicle in 2010 to 208 kg per vehicle in 2022, according to a study published in Current Trends in Automotive Lightweighting Strategies and Materials. For internal combustion engine (ICE) vehicles, with 10% less weight, fuel economy will improve by 6-8%. A lower-weight alternative to steel is aluminum, which is highly recovered and reused. The increasing demand for lightweight material is supporting aluminum in the automotive forging industry.

By Application Analysis

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Axle Segment to Dominate Owing to its Vitality in Vehicle Drive Train

By application, the market is categorized into crankshaft, gears, piston, axle, bearings, connecting rods, and others.

An axle is a shaft that connects a pair of wheels in the automotive to propel wheels and retain their position to one another. The axle segment is expected to grow at the highest CAGR and maximum dominance from 2023 to 2030. The segment comprises applications for other automotive forged components such as input/output shafts, chassis, high-pressure valves, and others.

The growing use of special purpose vehicles and mining and defense purpose vehicles has resulted in the fast growth rate of the others segment over the forecast period. Forged engine and powertrain components include connecting rods, differential gears, clutch hubs, transmission shafts, crankshafts, drive shafts, and universal joint yokes. Forged gears, pinions, camshafts, and rocker's arms offer strength and ease of selective hardening. Axle beams and shafts, idler arms, linkages, steering arms, wheel spindles, and torsion bars for passenger cars, trucks, and buses characterize applications that require substantial toughness and strength. Hence, forging is a suitable manufacturing process for automotive components.

By Technology Analysis

Closed Die Segment to Dominate Owing to its Surface Finish and Superior Mechanical Properties

By technology, the market is divided into open die, closed die, and others. Closed die segment dominated the market with the highest market share in 2022. It helps produce components with complex profiles. This type also offers an excellent surface finish and excellent mechanical properties. This factor further reduces processing requirements.

The open die segment is estimated to grow at a significant growth rate from 2023 to 2030. Its growth is driven by the increasing demand for simple geometry forged products such as shafts, axle beams, forks, and ball joints. In addition, part weight savings are achieved due to their inherent high strength-to-weight ratio. Therefore, more than 200 die forgings are used in vehicles and die forging machines are installed in almost all types of forging units to produce high-quality development products efficiently.

By Supplier Type Analysis

Local Segment is Dominant Due to Low Production Costs and Incentives for Manufacturers

By supplier type, the market is segmented into local and international (import). The local segment had the highest market share and dominance from 2022 to 2030. The major driving factor for its growth is the import of auto ancillaries and electric vehicle components from China and other Asian countries to Europe and North America.

The international segment is expected to showcase a positive growth rate in the forecast period. This growth is due to low production costs, economies of scale, government initiatives to tackle trade barriers, and manufacturing incentive schemes.

REGIONAL INSIGHTS

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Increasing Budget and Spending on Military Requirements to Propel Market Growth in Asia Pacific

Regionally, the market is classified into North America, Europe, Asia Pacific, and the rest of the world.

The Asia Pacific market is expected to be the dominant and fastest-growing compared to other regions. China and India account for a huge share of forged components produced. The new investments by major regional players are focused on automation and high-level machinery with low energy consumption and higher efficiency. The presence of key players in these regions is projected to boost the growth of the forging market in the country. The companies such as Bharat Forge Limited, Ramkrishna Forgings LTD, and many other players are developing various opportunities in the country.

Europe is expected to grow significantly due to alternative production techniques in the forging industry. Government regulations support locally manufactured products, propelling the expansion of the Europe market. North America is expected to increase steadily in the global market owing to the increasing demand for forged automobile parts.

Light Commercial Vehicle (LCV) and heavy truck production both positively recovered. These segments also have a higher need for replacement. These factors positively impact the demand for forged parts in North America.

Brazil and Turkey are introducing auto sector policies that provide additional tax benefits to manufacturers who invest in technological developments. Such regulations have encouraged many automakers to adopt advanced manufacturing processes. These factors will positively impact the market growth in the rest of the world.

KEY INDUSTRY PLAYERS

Early Adoption of Smart Manufacturing Technology to Drive the Competition Among Market Players

ThyssenKrupp Group is an international group of companies comprising largely independent industrial technology businesses. The company has presence across 56 countries. Six segments handle its business activities - industrial components, material services, steel Europe, multi-tracks, marine systems, and automotive technology. Adopting automation and smart/intelligent manufacturing technologies is an ongoing trend in the market. The company’s nearly 3,600 employees work in the R&D department across 78 locations worldwide.

R&D is mainly a company's team that works primarily in the industry's energy transition, climate protection, future mobility, and digital transition. ThyssenKrupp Group has a portfolio of nearly 18,100 patents and utility models. Most leading players focus on turning their forging lineup automated to increase operational efficiency, overall productivity, and safety.

LIST OF KEY COMPANIES PROFILED:

• ThyssenKrupp AG (Germany)


• CIE Automotive (Spain)


• NTN Corporation (Japan)


• American Axle and Manufacturing Inc. (U.S.)


• Bharat Forge Limited (India)


• Ramkrishna Forgings (India)


• Dana Limited (U.S.)


• Meritor Inc. (U.S.)


• ZF Friedrichshafen AG (Germany)

KEY INDUSTRY DEVELOPMENTS:

• March 2023 - Ramkrishna Forgings incorporated its subsidiary RKFL Engineering Industry Private Limited. The company is in business for forging, pressing, rolling of metal sheets, and stamping processes. The subsidiary has been incorporated to implement a resolution plan under the Corporate Insolvency Resolution Process (CIRP) for JMT Auto, a unit of Amtek Auto group.


• February 2023 - Jiangsu Pacific Precision Forging invested around USD 64.9 million to build a new energy vehicle parts plant in Thailand. The new plant will be located at Pinthong Industrial Park in Rayong province and will be fully operational in five years. The Taizhou-based company said it would be involved in vehicle gears, forging parts, and assembly products without specifying product capacities.


• July 2022 - Siderforgerossi Group S.p.A. acquired Grupo Euskal Forging, S.L. and its subsidiaries. This acquisition will make the company reach a leading position in the forgings market across offshore and onshore applications. 


• May 2022 - Ramkrishna Forgings Limited received a multi-year contract valued at USD 13.5 million annually for major chassis-related systems and components primarily for trailers, trucks, and buses in the U.S.


• March 2022 - American Axle & Manufacturing announced that it secured multiple next-generation full-sized truck rear and front axle programs with global OEM customers. The contracts and a previously announced award in early 2021 are anticipated to generate more than USD 10 billion of lifetime revenue from mid-decade to beyond 2030.

REPORT COVERAGE

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The global automotive forging market research report provides detailed market analysis and focuses on key aspects such as leading companies, product types, end-users, design, and technology. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market growth in recent years.

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