Front-end Module Market 2020 Global Industry Forecasts Analysis, Competitive Landscape and Key Regions Analysis

COVID-19 Crisis Causes Sharp Decline in Consumer Footfall in Car Showrooms

The suspension of operations and minimal workforce in plants are few of the many measures companies in the front-end module market are adopting during the COVID-19 (coronavirus) crisis. Despite setbacks in the global economy, manufacturers are anticipating growth in business activities in the last quarter of 2020. They are taking cues from previous product launches. For instance, in January 2020, the U.S. semiconductor company Qorvo introduced a full suite of automotive products that include integrated front-end modules (FEM) to support dedicated short-range communication (DSRC) systems.

The expansion of the front-end module market has slowed down due to reduced consumer footfall in showrooms. Automakers in Europe, the U.S., Russia, and India are scrambling to keep vehicle assemblies humming. Postponement and cancellation of industry events are likely to cause issues for car makers.

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Aesthetic Surfaces and Precision Molding Being Preferred by Automakers in Front-end Modules

Companies in the front-end module market are increasing their production capacities to manufacture glass mat thermoplastic (GMT) components and mechanical assemblies for small as well as luxury cars. SUVs among passenger vehicles are projected to hold the highest revenue share in the market. OEMs in India are strengthening their distribution chains with countries such as France, Germany, and Spain. Apart from Asia and Europe, manufacturers are tapping into business opportunities in other automotive regions such as South and North America.

The front-end module market is expected to cross a value of US$ 100 Bn by 2030. OEMs are increasing efforts to offer full system solutions to automakers. With the help of manufacturing expertise in elastomer and polymer processing and highly specialized technology, companies are gaining competitive edge over other component suppliers. Aesthetic surfaces and precision molding are highly preferred by automobile manufacturers.

High-speed Automotive Ethernet Improves Throughput in V2X Communication

The trend of vehicle-to-everything (V2X) communication is bringing a significant change in the front-end module market. As such, the automotive Ethernet is being used to connect the telematics control unit (TCU) in cars. However, the drawback of automotive Ethernet is that it lags behind standard Ethernet maximum throughput. Hence, companies in the front-end module market are introducing high-speed Ethernet of more than 10 Gbit/s to improve the throughput.

Manufacturers are increasing their portfolio in simple plastic as well as mechanical assemblies. For instance, Motherson Sumi Systems— a joint venture between Samvardhana Motherson International Ltd. of India and Sumitomo Wiring Systems Ltd. of Japan, is increasing production for highly integrated modules. As such, plastic is predicted to dictate the lion’s share among all materials in the market, while pelletized long fiber pp material is anticipated for rapid growth during the forecast period.

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Robust Front-end Modules Built with Air Flap Controls Improve Vehicle’s Aerodynamics

Module specialists are supplying individual module solutions to car makers. For instance, HBPO GmbH— a specialist in highly integrated front-end modules, helps automakers to lower their manufacturing and other processing costs. Companies are going beyond assembly of modules, and are helping car manufacturers in the construction and development of vehicles by delivering modules just-in-sequence for series production. In order to gain credibility in the global front-end module market, manufacturers are integrating systems with active air control systems on request, since European countries have strict regulations pertaining to carbon emissions.

Robust front-end modules are being built with air flap controls to improve the vehicle’s aerodynamics. Manufacturers are increasing the availability of front-end modules built with active grille shutters for vehicles with combustion engine or an electric motor. The trend of modularized vehicle front is serving as a key driver of the front-end module market.

Customized Solutions Create Several Thousand Variants in Colors and Materials for Modules

Comprehensive services are helping OEMs in the front-end module market gain recognition. Manufacturers are offering project-level services as well as in-house developments in vehicles         to boost their credibility credentials in the market landscape. They are catering to tailored requirements of customers in order to adapt to new production practices. As such, specialists in front-end modules are increasing their portfolio in more than several thousand variants in systems. They are experimenting with different materials and colors to attract more customers.

The trend of customized solutions is generating incremental opportunities for manufacturers in the front-end module market. In order to develop light construction materials, manufacturers are using magnesium to develop modules by implementing metal hybrid engineering. Apart from cooling fans and grill panels, manufacturers are building modules with stylish headlamps and bumper covers to improve the aesthetics of the car.

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Thermoplastics Deploy Greater Flexibility during Processing Of Hybrid Front-end Modules

Thermoplastic materials are comparably expensive than standard materials. Lanxess AG— a Germany-based specialty chemicals company is helping automakers to smartly produce highly integrated hybrid front-end modules with the help of easy-flowing polyamide. Companies in the front-end module market are utilizing thermoplastic materials to deploy greater flexibility during processing. They are increasing the availability of systems with adjustable airflow.

Along with steel panels, manufacturers in the front-end module market are increasing their production capabilities to develop highly integrated bolster houses. Active grille shutters in modules ensure demand-oriented supply of air to the engine cooling system. Region-specific versions of front-end modules are being highly publicized in the market landscape. Automated high-volume production processes are being adopted to develop modules in a cost-efficient manner. Cutting-edge front-end modules are guaranteed with vehicle front rigidity.

Analysts’ Viewpoint

The COVID-19 pandemic has hurt sales of automotive vehicles. As such, the front-end module market is projected to register a modest CAGR of ~4% during the assessment period. Manufacturers are entering into joint ventures with automakers to develop region-specific versions of front-end modules. Thermoplastics offer easy-flowing properties during production but are expensive than most standard materials. Hence, manufacturers should use thermoplastics to develop highly integrated hybrid front-end modules, since these materials reduce production costs and deliver freedom in designing. Development and construction engineers are building front-end modules with active grille shutters to deploy adjustable airflow.

Front-end Module Market: Overview

·         The front-end module market is a mature market and estimated to expand at a CAGR of ~4% during the forecast period

·         Vehicle production in Middle East & Africa and Latin America is likely to increase significantly during the forecast period, owing to increase in vehicle production in Mexico, Brazil, Iran, South Africa, and Morocco, which, in turn, is estimated to drive the front-end module market in these regions

Drivers of Front-end Module Market

·         Increase in consumer affordability and demand for personal transport are boosting the demand for vehicles, which is driving the front-end module market. Availability of low cost EMIs and zero processing charges have boosted vehicle sales, which, in turn, is driving the front-end module market.

·         Rise in penetration of own damage auto-insurance, which covers accidental damage to insured’s vehicles as well as third-party liability, is also a major factor boosting the aftermarket demand for front end modules

Challenges of Front-end Module Market

·         Front-end module components, such as grille reinforcement, bumper, headlights, and fenders are specifically designed according to vehicle type or model. Manufacturers of front-end modules need to make high capital investments to constantly upgrade and change molds as per requirements from automakers.

·         Lockdown measures, credit crunch, and weakened consumer demand have hampered the demand for new vehicles and consequently, hindered the front-end module market globally

Opportunities in Front-end Module Market

·         Automakers are emphasizing on achieving aerodynamic vehicle body shape to reduce air drag. Integration of active grill shutter in the front-end module helps to improve aerodynamic co-efficient by an average of 9% or by 25 aerodynamic points. Controlling the air drag of the vehicle can lead to CO2 saving of up to 3 grams per kilometer. Increasingly stringent emission norms are prompting automakers to adopt technologies to lower air drag and reduce emission, thereby driving the demand for active grille shutter.

·         It has become imperative to reduce aero drag in electric vehicles, as it consumes considerable battery power. Active grille shutters are widely adopted in front-end modules of battery electric & plug in hybrid vehicles in order to maximize and improve battery life.

Segmentation of Front-end Module Market

·         Based on material, the plastic segment held a leading share of the global front-end module market. Plastics have been extensively used in front-end module components such as bumper covers, fenders, forward light body, and grille reinforcement and radiator body. Pelletized long fiber PP possess higher stiffness, strength and are cost-effective as compared to other high cost engineered polymers. Therefore, preference for long fiber PP is increasing in the automotive industry, particularly for front-end module applications.

·         In terms of sales channel, the aftermarket segment held a significant share of the global front-end module market in 2019. Front-end module components, such as bumpers, fenders and headlight, are highly prone to accidental damage and contribute to high replacement demand. The market share held by the aftermarket segment is estimated to rise due to growing consumer affordability and awareness about vehicle maintenance.

Front-end Module Market: Regional Analysis

·         Based on region, the global front-end module market has been segregated into North America, Asia Pacific, Europe, Latin America, and Middle East & Africa

·         North America held about 15% share of the global front-end module market in 2019. The U.S holds key position not only in North America but also in the global front-end module market. Asia Pacific held a major share of the global front-end module market. China, India, Japan, and South Korea are major contributors for the high demand for front-end modules in the region. Low land and labor rates in the region and high export demand have boosted the front-end module market in Asia Pacific.

Front-end Module Market: Competition Landscape

·         Prominent players operating in the global front-end module market include

o    Magna International Inc.

o    MAHLE GmbH

o    Faurecia SA

o    DENSO Corporation

o    Calsonic Kansei Corporation

o    HBPO Group

o    Plastic Omnium

o    Hyundai Mobis

o    Samvardhana Motherson Group

o    Valeo Flex-N-Gate Corporation

o    RTP Company SL Corporation