Automotive Films Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Global Automotive Films Market is projected to register a CAGR of over 5% during the forecast period (2021-2026).

The market was negatively impacted by COVID-19 in 2020. Considering the pandemic scenario, the automotive manufacturing units were on a temporary halt during the government-imposed lockdown in order to curb the spread of COVID-19 cases. The automotive industry, after suffering a slowdown in 2019, is further suffering from the outbreak of the COVID-19 pandemic. The global automotive supply industry is heavily impacted by the COVID-19 crisis, as both the production and sales of motor vehicles have come to a sudden halt in most parts of Europe and North America. These work stoppages led to a loss in the production of millions of vehicles in the world. The global automotive output was estimated to fall by almost 16% to post a figure of 77,621,582 units in 2020, as a result of the COVID-19 pandemic and ensuing recession. The global automotive sales also witnessed a dip of 13.8% to reach 77,971,234 units in 2020, which in turn has impacted the market demand for automotive films.

• Over the short term, the increasing concern for safety, security, and privacy, coupled with the increasing demand for automotive films in Asia-Pacific and Europe are expected to drive the market's growth. Window tint films reduce the penetration of heat waves into the vehicle, thus decreasing the cost of air conditioning. In addition to blocking sunlight, window tint provides protection from harmful UV and infrared radiations.
• On the flip side, the occurrence of technical issues with dyed and metalized films which results in low heat reduction and GPS transmission interference is likely to hinder the market’s growth.
• The rising demand for electric vehicles and emerging government regulations in countries such as the United States enforcing the usage of automotive films are projected to act as an opportunity for the market in the future.
• Asia-Pacific dominated the global market share. With significant automotive production and sales in countries, such as China, India, Indonesia, Thailand, and Japan, the usage of automotive films is increasing throughout the region.

Key Market Trends

Increasing Demand from the Passenger Vehicles Segment

• Passenger cars are motor vehicles with at least four wheels, used for the transport of passengers, and comprising no more than eight seats in addition to the driver's seat.
• Passenger cars provide the dominant mode of road transport in much of the world. About 70 million new cars are produced each year, with nearly all being fueled by petrol (gasoline) or diesel. They account for about 45% of the global energy used in transport, which itself accounts for about 20% of primary energy consumption.
• Window films are lamination's installed, either on the exterior or interior part of the glass windows in passenger vehicles which provides protection, as well as sustainability, to the vehicles. They are installed to reduce the excessive heat transmitted to the vehicles.
• Window films provide an extra level of protection against the harmful infrared and ultraviolet rays, coming from the sun. Additionally, window tints reduce the workload on the vehicle’s air conditioning system.
• Additionally, it provides increased privacy, a faded interior, less glare, and provides security for valuables inside the car and also increases the vehicle’s overall appearance, and hence, finds application in the passenger vehicles, majorly in windows.
• The production of passenger cars has declined in past couple of years. The production in 2018 declined by 1.55% (71.75 million units), Moreover, in 2019 the production declined by 6.4% (67.14 million units). Asia-Pacific, Europe and North America witnessed negative growths due to lack of new jobs which led to decrease in the purchasing power. This has reflected in the market with lack of domestic and international demand.
• The market further took hit in late-2019 and 2020 primarily due to the COVID-19 and US-China trade war and other geopolitical tensions. By the end of 2020, the production of cars declined by 16.9% from 2019. The production halt in different parts of the world due to the COVID-19 pandemic has severely affected the production and supply of raw materials.
• Therefore, the aforementioned factors are expected to show a significant impact on the market in the coming years.

Asia-Pacific Region to Dominate the Market

• Asia-Pacific region dominated the global market share. With automotive production and sales growth in countries such as China, India, Indonesia, Thailand, and Japan, the usage of automotive films is increasing throughout the Asia-Pacific region.
• According to OICA, China is the largest producer and consumer of automotive vehicles. Around 25.31 million vehicles were sold in China during 2020 compared to 25.79 million vehicles that were sold in 2019, witnessing a decreasing growth rate of about 1.9%.
• India is also one of the major consumers of automotive films in the Asia-Pacific region. According to OICA, around 2.94 million vehicles were sold in India during 2020 compared to 3.82 million vehicles that were sold in 2019, witnessing a decreasing growth rate of about 23%.
• India is expected to be the world’s third-largest automotive market, in terms of volume, by 2026, providing opportunities for electric and commercial vehicles. The rise in demand is attributable to an increase in average household income to become the ‘Youngest Nation’ by 2025, increasing vehicle penetration, and expanding research and development hub.
• The Government of India aims to develop India as a global manufacturing center. Reforms, such as GST, may boost the industry growth. Under the new GST regime, GST on electric vehicles has been reduced from 12% to 5%. Under the Union Budget 2021-22, the government has announced to allocate about USD 6.71 billion for research and development to the National Research Foundation (NRF) for investing in the national priority thrust areas including the development of electric vehicle (EV) ecosystem, and others.
• According to OICA, Japan is the second-largest vehicle producer in the Asia-Pacific region. Around 4.59 million vehicles were sold in Japan during 2020 compared to 5.19 million vehicles that were sold in 2019, witnessing a decreasing growth rate of about 11.5%, thereby negatively impacts the demand for the automotive films market.
• Therefore, the aforementioned factors are expected to show a significant impact on the market in the coming years.

Competitive Landscape

The automotive films market is partially consolidated in nature. Some of the key players in the automotive films market include Saint-Gobain, TORAY INDUSTRIES, INC., 3M, Eastman Chemical Company, and Johnson Window Films, Inc., among others.

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