Peter T. Leach, Senior Editor | Aug 02, 2012 11:35AM EDT
The global trade in auto parts is getting a fuel injection as a result of the growing market for exhaust and emissions control equipment as governments in emerging countries adopt regulations “off-the-shelf” from developed markets in Europe and North America, according to a new report by IHS Automotive.
In addition, the after-treatment market is set for considerable growth, not only through the significant global vehicle production volume growth forecast but also through significant increases in the revenue generated for each system, according to the Automotive Exhaust & Aftertreatment Systems Report.
The tightening regulatory environment has led to considerably increased revenue per vehicle, and this is set to improve globally as emerging high growth markets catch up with Europe and North America in terms of the level of equipment needed to meet regulations.
Estimates from a number of commentators have concluded that the overall costs for exhaust and after-treatment systems will make up more than 5 percent of the total costs for light vehicles, compared with an estimated 0.5 percent for light vehicles in 2003.
Original equipment manufacturers and suppliers have found that emerging markets have largely been able to pick their regulations “off the shelf” from those developed to meet emissions requirements in the European Union, Japan and the U.S.
The awkward and ultimately costly situation where different national and regional regulation and testing regimes that have required various emissions technologies and systems in order to satisfy disparate markets is being steadily eroded by the harmonization of emissions regulations, a measure that will bring huge long-term benefits to those players in the exhaust and after-treatment sector.
Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.