Owing to the presence of few manufacturers in the global rear axle market, the competitive rivalry is significantly high, reports Transparency Market Research (TMR) in a new study. The global rear axle market is already saturated anduntil new companies enter into the market, the competition in the rear axle market is expected to remain stiff in the upcoming years. The three leading companies in the global rear axle market, Meritor Inc., Dana Holding Corporation, and American Axle & Manufacturing Holdings, held a share of 39.2% in the market in 2013.
The global rear axle market is expected to expand at a CAGR of 3.7% from 2014 to 2020. The market stood at a value of US$35.8 bn in 2013 and is projected to touch a valuation US$45.99 bn by the end of 2020.. Economy vehicles is expected to emerge as the key application segment with a market worth US$18,570 .8 mn in 2020. Rear axles are used in economy vehicles at the rear and front ends maintain the vehicles performance as the vehicles are significantly light in weight and inexpensive. The increasing demand for good quality economy vehicles is likely to boost the demand for rear axles in the segment.
Europe to Emerge Dominant in terms of Consumption of Rear Axle
The rear axle market in Europe is anticipated to exhibit stable growth after recovering from the economic downturn with a CAGR of 3.3% between 2014 and 2020. The factors driving the growth of the European rear axle market are strict emission norms laid down by the government and a significant rise in the demand for light-weight rear axles owing to the rising focus towards fuel efficiency in vehicles in the region. Eastern Europe is likely to provide better growth opportunities than Western Europe as the market in the latter is slightly saturated.
Stringent Government Regulations Regarding Fuel Economy to Drive Demand for Rear Axle
Over the past few years, the automotive industry has been immensely influenced by the strict regulations passed by the governments across the world. The regulations mainly focus on fuel economy and vehicle safety. As a result of this, automobile manufacturers have been strictly advised to follow the Corporate Average Fuel Economy (CAFE) standards. According a TMR analyst, “Owing to this, the demand for improved automotive components that enable fuel efficiency and reduce emission in vehicles has substantially increased.” Rear axle is a significant automotive component and it highly influences the fuel economy in vehicles.
Rear axles provide better on and off-road traction, enhancing safety and longevity of vehicles. Thus, there is also expected to rise among light weight automobile manufacturers as well in the coming years. Moreover, the need for safety, security, and comfort in passenger vehicles is also expected to increase the sales of rear axle commodities.
Economic Instability to Inhibit Sales of Rear Axles
The economic fluctuation in many countries across the world has negatively impacted the purchasing power of consumers and significantly affected many industries. Hike in fuel prices, expensive vehicle cost, and inflation in emerging economies is expected to substantially affect the sales of rear axle commodities. There has been a downturn in vehicle financing as well impeding the growth of the automotive industry.
However, the burgeoning demand for automobiles in emerging countries owing to the increase in purchasing power of people is anticipated to provide lucrative growth opportunities to manufacturers of rear axles. Owing to the low cost of manufacturing vehicles, leading companies are setting up manufacturing plants in countries such as China, India, and Brazil along with Russia and countries in Eastern Europe.
As established manufacturers have a strong hold over the market, the entry of new players becomes difficult in the global rear axle commodity market. However, as there is limited differentiation among products, the manufacturers are focusing on product innovation to maintain their positions in the market.
The review is based on the findings of a TMR report titled, “Rear Axle Commodity Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2014 - 2020.”
Rear Axle Commodity Market: By type
- Drive Axle
- Dead Axle
- Lift Axle
Rear Axle Commodity Market: By application
- Heavy Vehicles
- Luxury Vehicles
- Executive Vehicles
- Economy Vehicles
Rear Axle Commodity Market: By geography
- North America
- Asia Pacific
- Rest of the World (RoW)
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