Car Airbag Manufacturing was projected to see a revenue decline in the five years to 2022 due to weakening demand for automobiles and falling production levels. When an accident occurs, airbags deploy to cushion the driver from harm. Airbags are produced by the industry for all vehicle categories, from passenger cars to light trucks to semis.
In the auto industry, demand for airbags follows the changing patterns of overall vehicle sales because airbags are an intermediate product or input used to produce a final good. In 2020, when the COVID-19 (coronavirus) pandemic broke out, production of automobiles was temporarily halted, and new car sales dropped due to rising economic uncertainty.
The Airbag Market Overview
The size of the global automotive airbag silicone market is anticipated to increase at a 17.5 percent CAGR from USD 239 million in 2020 to USD 534 million in 2025. The automotive airbag silicone market is projected to grow due to the rising penetration of airbags and the benefits provided by silicone-coated airbags. In the coming years, the automotive airbag silicone market is expected to benefit from the rising demand for electric vehicles and the rising installation of airbags in commercial vehicles.
COVID-19 Effect on Market
As a result of the COVID-19 pandemic and subsequent drop in airbag fabric production, the entire automotive airbag silicone industry has taken a major hit. This effect has disrupted the global supply chain concerning material components. During the lockdown, major companies like Toray Industries Inc, Global Safety System, UTT Technische Textilien GmbH & Co KG, TOYOBO Co. Ltd., Porcher Industries, Autoliv, and ZF TRW ceased production in whole or in part.
After a significant drop in silicone demand at the beginning of the COVID-19 pandemic due to disruptions in airbag fabric and airbag manufacturing processes, the industry is predicted to recover by the fourth quarter of 2020. In addition, the COVID-19 pandemic has caused airbag fabric and silicone supplier companies to cut back on research and development activities related to automotive airbag silicone. As a result, the automotive airbag silicone market is expected to grow in the coming years, especially as the production of airbag fabric and airbags is expected to increase steadily after 2020.
The Benefits of Silicone-Coated Airbags
During deployment, airbags generate heat that can cause burns to passengers. Adding a silicone coating to the airbag can help dissipate/contain this heat without causing the airbag to rip or tear during deployment. Silicone-coated airbags offer superior thermal resistance and airbag protection compared to non-coated options like neoprene, and they deflate rapidly after reaching their peak inflation pressure, especially important for truck drivers. Due to its chemical inertness and ability to form a protective layer against moisture, silicone is widely used in airbags. These benefits are expected to drive demand for silicone-coated fabric-based automotive airbags.
The Advancement Active Safety Systems
To increase safety, these systems are being developed and installed in more passenger cars around the world. This technology is expected to reduce the need for airbags and the number of airbags required in a vehicle as it becomes more widely used to prevent accidents. The automotive airbag silicone market is predicted to be hampered by the estimated reduction in airbags per vehicle.
Increased Demand for Electric Cars
Automakers are putting money into electric vehicle technology because of the growing demand for these vehicles. Manufacturers have announced a wide range of investment strategies for the research, design, and production of new electric vehicles. Ford, for one, has committed to spending $US11 billion on EVs by 2022. By 2022, the company anticipates offering a total of 40 electric vehicles, 16 of which will be purely electric and 24 of which will be plug-in hybrids.
Volkswagen AG, a German automaker, has announced plans to invest USD 66.3 billion over the next five years to increase the production of electric and hybrid vehicles, with the introduction of 75 fully electric models and 60 hybrid models. MG Motor has planned to invest USD 500 million in 2020 to develop, produce, and sell EVs in India. During the forecast period, the automotive airbag silicone market is anticipated to expand due to rising consumer demand for electric vehicles.
Price-related Issues in Competitive Markets
Technologies for improving automotive safety have advanced as a result of safety requirements. Regulators like the NHTSA and Euro NCAP are advocating for the installation of passive safety systems in vehicles to reduce traffic fatalities, but this has led to high compliance costs. Automakers have a hard time providing passive safety systems to comply with safety regulations in cost-conscience markets like India, South Africa, Brazil, and other ASEAN countries.
The addition of safety features like airbags, seat belt reminders, and reverse parking sensors, in addition to mandatory third-party insurance, has increased the price of passenger vehicles. The cost of the car is expected to rise by about 8-10% due to these safety features. To meet regulations, Original Equipment Manufacturers (OEMs) in price-sensitive markets typically only install one or two airbags. It is anticipated that this will restrain the expansion of the automotive airbag silicone market over the forecast period.
Airbag Technology Prospect
Passive safety systems like airbags reduce impact and save lives in accidents. As the number of traffic accidents rises, many governments are urging citizens to install airbags in their cars. This increase in demand for passenger car airbags has increased the need for automotive airbag silicone in the passenger car market over time. Also, the recent mandates for airbags in developing countries, and the expected mandates from countries like China and the US for curtain/side airbags, are expected to increase airbag penetration to between five and seven airbags per vehicle.
Passenger cars are expected to generate the most demand for airbag silicone as a result of the expansion of the automotive sector. Revenue in the Car Airbag Manufacturing sector is forecast to rise over the next five years, bouncing back from lows experienced during the COVID-19 (coronavirus) pandemic. Rising auto production is estimated to bolster market revenue over the next five years as supply chain constraints ease. A rise in consumer spending will encourage people to buy new cars in the forecast period. Airbag manufacturing is anticipated to rise with the expansion of the automotive industry. However, development in active safety devices will likely slow the demand for passive safety systems like airbags.