The Global Active Grille Shutter Market, and its double-digit growth.
Active Grille Shutter, an elegant aerodynamic solution
It is not just the engine’s performance that influences efficiency, acceleration, and top speeds, but equally significant is the aerodynamics of an automobile. The forces of lift and drag become more significant at higher speeds, influencing the overall performance. It was only by late 1960s that scientists became fully cognizant of the momentous significance of aerodynamics and have strived to keep the drag at a minimum.
One innovative way to solve the issues of fuel efficiency, manoeuvrability, and performance is the use of active aerodynamics components like Active Grille Shutter. These components change their positions with changes in the speed, thus ensuring that the adverse effects of aerodynamic drag are kept at bay.
There is a limited range of active parts available at present; active grille shutters, active spoilers, active rear wing, active air dam, active speed lips, active front deflectors, active rear diffusers, active rocker panels, etc. These components are electronically controlled with the help of actuators. Among them, the active grille shutter has a prodigious share of the total market of active aerodynamic parts.
On average, roughly 20% of the air flowing in front of the vehicle goes under the hood and reduces aerodynamic performance. Active grille shutter improves efficiency or reduces the coefficient of drag (it quantifies the drag or resistance of an object in the air, lower value of the coefficient is better) by a calibrated opening and closing of the shutter to control airflow. Without active grille shutters, air entering the engine compartment from the front creates about 10% to 20% of the total aerodynamic drag of a passenger car. The drag is even more in heavy-duty vehicles.
When the air (which cools the engine) is not needed, the shutter closes, and a smooth airflow envelops the vehicle leading to lower drag coefficient, entailing higher fuel efficiency, lower greenhouse emissions, better sound dampening along with a reduction in windshield defrosting time and reduced warm-up time in cold weather, etc. With advantages galore, the market of Active grille shutters is on the rise.
A closer look into AGS
According to Stratview Research, after considering a plethora of germane factors, it estimates that the global automotive Active Grill Shutter Market shall experience an impressive double-digit CAGR over the next five years (2018–2023) to reach a market size of over USD 1 billion and sales of over 20 million units by 2023.
The global automotive active grille shutter market is highly consolidated with the presence of less than a dozen global and regional players in the market. The attractiveness of the market has led to the entry of new players, such as Magna International, Aisin Seiki, and HBPO GmbH, in the past few years. The top three players Rochling Automotive, Magna International Inc., and HBPO GmbH accounted for over three-fourths of the market in 2017 in terms of value.
AGS are the favourites of passenger cars which have the most dominant market share. Among passenger cars, premium and electric cars are using AGS the most. Passenger cars are also set to post the highest growth among all vehicle types.
Propellants of growth
The growth in AGS market is driven primarily by the stringent emission regulations, fuel efficiency gains, better vehicle performance, the rise of electric vehicles, and low penetration levels of AGS.
Today, governments across the globe are enforcing stricter emissions laws and targets. For instance, European Commission regulations have set the goal of emissions per kilometer to be reduced from 135 gm/km to 95 gm/km by 2020. Each country has its emission norms, set in tandem with the global agreements, such as CAFÉ Standards, CARB rules, Bharat Stage emission standards, Euro 4/6, etc. are such standards which are forcing the automotive firms to cut down drastically on emissions.
As a consequence, the industry is continually striving to increase fuel efficiency and reduce emissions. There are many ways of approaching it; the most preferred method is to enhance the engine performance and thus reduce fuel consumption; the second most preferred way is to go for lightweighting and has been achieved with the use of lighter materials like composites. The third best alternative is to go for superior aerodynamics, and the industry has been focusing on all three ways.
Today, in view of many advantages of AGS, firms are aggressively incorporating them in vehicles. For instance, AGS offers a significant improvement in aerodynamic performance, up to 30% as compared to non-AGS vehicle, and the advantages will rise further with tech-advancements. AGS ensures higher operating torque reliability under all weather conditions, vehicle, and wind velocity.
Electric cars have already started penetrating the automobile market, and their growth to dominance is inexorable. Electric cars are highly digital cars, and they are most likely to inculcate active aerodynamic components to boost vehicle range, optimize engine temperatures and battery cooling. Electric vehicle sales will drive the growth of AGSs.
The current penetration of AGS is still below 15%, such a low level of penetration leaves ample room for the growth of AGS as the penetration deepens in the future.
Europe, the leader in green innovations
The combined result of factors like stringent emissions norms, push to electric vehicles and a high share of luxury cars has made Europe the largest market for AGS in the world with a share of around 40%, followed by North America and the Asia Pacific.
(Graph shows the concentration of luxury vehicles around the globe, USA, Europe, and China have high numbers)
The top three countries, Germany, USA and China, together accounted for a significant chunk of the market. Germany was the largest automotive active grille shutter market. China is expected to remain the largest and fastest-growing (double-digits) market in Asia-Pacific’s. The same trio leads the global Electric vehicles in circulation (refer to the first Graph), which are rapidly growing.
Cost Bottleneck and the way forward
The high cost of a component is an unpardonable sin in the automotive industry, which has remained disinclined towards adopting costly components, as it escalates the final price of the vehicle. This makes the high cost of AGS a roadblock in its wide-scale adoption.
The complexity of mechanisms in AGS, along with the requirement of running clearances are formidable constraints. The exposure to debris and environmental contaminants also make AGS application more challenging.
Notwithstanding its shortcomings, the highly impressive double-digit growth rate during the forecast period of 2018–23 and expected market size of over US$ 1 billion by 2023, paint a roseate picture. The growth will continue, riding the wave of growth in electric vehicle and growing global economy along with the automotive sector. The inherent advantages of AGS which boosts fuel economy, better manoeuvrability, and better operating torque will propel its growth. The lower penetration levels of AGS leaves much room for growth too.
As the emission regulations become more stringent with each passing year, inter-alia automakers shall strive for better aerodynamics. Thus the application of active grille shutter is expected to increase.
The market for active aerodynamic components is enormous, especially for active grille shutter. The growth in AGS shall continue unabated for the near future, and if the costs get lower, even large scale application of AGS is not entirely improbable.
