The growing demand for vehicles, increase in vehicle production, rapid urbanisation, and growing investments for the development of lightweight vehicles with higher fuel efficiency drive the growth of the automotive fuel tank market, which is anticipated to grow at a CAGR of 5.1% till 2026.
According to the new market research report - Automotive Fuel Tank Marketby capacity, material, CNG tank, propulsion, SCR technology and region - Global Forecast to 2026, published by MarketsandMarkets,the automotive fuel tank market is projected to reach $ 21.3 billion by 2026 from an estimated USD 16.6 billion in 2021.
Moreover, the demand for a longer driving range, improved two-wheeler sales and increasing use of lightweight fuel tanks in the transportation sector drive the fuel tank market, which is expected to witness significant growth in the coming years.
The automotive fuel tank market is dominated by globally established players such as The Plastic Omnium Group, Textron – Kautex, Yapp, TI Fluid Systems and Yachiyo.
The hydrogen tank segment is expected to be the fastest market in propulsion type during the forecast period.
The increasing stringency of emission and fuel efficiency norms has shifted the focus of automotive manufacturers toward alternative fuel vehicles, such as compressed natural gas (CNG), liquefied natural gas (LNG), and fuel cell vehicles.
China has played a significant role in the manufacturing and deploying hydrogen fuel cell technologies with a plan of 1,500 FCEV buses to be included in the Lianyungang Haitong public Transport by 2020 to achieve the CO2 emission reduction goal. In addition, Germany has set a target of one million hydrogen-powered vehicles on the roads by the end of 2020.
Under the efficiency standards adopted in 2012, the US passenger vehicle fleet needs to achieve an average fuel economy of 49.1 miles per gallon (mpg) by 2025, or 54.5 mpg as measured in terms of CO2 emissions with various credits for additional climate benefits factored in. For 2020, the CAFE standards have set the limit at 49 mpg for cars and 25 mpg for trucks.
Several governments have set renewable energy targets and implemented favourable policies such as the Kyoto Protocol. Thus, the hydrogen fuel tank is projected to be the fastest-growing automotive fuel tank market segment during the forecast period, the report said.
According to MarketsandMarkets, the 45L – 70L tank segment is expected to be the largest growing market during the forecast period.
The automotive fuel tank market is segmented by capacity into three categories: <45 litres, 45 – 70 litres, and >70 litres. Most passenger vehicles, including mini cars, hatchbacks, and mid-sized sedans, have a fuel tank capacity of <45 litres. On the other hand, many SUVs and luxury cars have tank capacities greater than 70 litres. Therefore, the sedans, mini-SUVs are commonly equipped with fuel tanks of 45 - 70 litres capacity. The growing demand and increased production of sedans and mini-SUVs in countries like Japan, China, India, Germany, France, and Spain have estimated the 45 – 70 litres fuel tank segment to be the largest growing market in the coming years.
In the US, customers prefer using SUVs as they are suitable for long distances. Also, the growing demand for commercial vehicles in countries like China and Germany is responsible for the fast growth of the >70 litres segment. About 3.6 million heavy-duty vehicles are required to move 10.5 billion tonne of freight annually, which would drive the growth of the >70 litres segment.
Asia Pacific To Lead The Market
In the Asia Pacific, China and Japan account for the largest automotive fuel tank market share. The market's growth in this region can be attributed to the high vehicle production and increased demand for passenger vehicles in countries like China, India, Japan, and South Korea. In addition, the per capita income of Asian countries has been rising at a steady rate, and the governments of these countries have recognised the growth potential of the automotive industry. They have consequently taken various initiatives to encourage major OEMs to enter their domestic markets.
Several European and American automobile manufacturers such as Volkswagen and Mercedes Benz have shifted their production plants to developing countries in the region. The manufacturing and production of vehicles are growing fast due to FDIs coming in countries like Thailand, Indonesia, and India.
The Chinese market is likely to increase the adoption of HDPE plastic fuel tanks due to lightweight and reduced emission features, soon marking the largest share in the Asia Pacific region, followed by Japan and South Korea. In addition, countries like China and India, being the leading two-wheeler manufacturers globally, drive the demand for fuel tanks, the research firm noted.
Courtesy: MarketsandMarkets. NB: Photo is representational; courtesy: Kautex Textron.