Automotive Exterior Smart Lighting Market Analysis

Automotive Exterior Smart Lighting Market Deep Dive – PESTLE, Porter, SWOT

The Automotive Exterior Smart Lighting market is about to undergo a significant transformation. Technological developments and the preferences of consumers are combining to completely reinvent the vehicle’s lighting system. With the growing integration of smart technology in vehicles, exterior lighting solutions are evolving beyond the limits of conventional functionality to include features such as adaptive lighting, wireless connection and enhanced safety. The demand for these features is being driven by the growing demand for a more individualized driving experience and the need for improved visibility and safety in different road conditions. In response to these demands, the market is developing smart lighting systems that not only improve aesthetics but also contribute to energy efficiency and the vehicle’s sustainability. The interplay between regulations, the expectations of consumers and the technological capabilities of the suppliers will define the competitive landscape. It is therefore essential for the different actors to be aware of the latest trends and consumer insights in this dynamic market.

PESTLE Analysis

• Political:
  In 2024, government regulations on safety and exhaust emissions for motor vehicles will become more and more severe. This will have a negative impact on the entire automobile industry, including the intelligent lighting industry. In the European Union, for example, the exhaust emissions standard of Euro 7 must be met by 2025, which will have a significant influence on the design and functionality of automobile lighting. Also, the United States Department of Transportation has proposed new regulations on vehicle lighting to enhance visibility and safety, which will lead to a large number of smart lighting devices being installed in the vehicles of the 15 million new vehicles sold annually in the United States.
• Economic:
  “In the auto industry, fluctuations in the cost of raw materials directly affect the cost of manufacturing advanced lighting systems.” “The price of a semiconductor chip used in advanced lighting systems is expected to average $1.50 per unit in 2024, up 20 percent from 2023, due to the continued disruptions in the supply chain. The global automobile market is expected to grow, and in the developed countries, the disposable income is expected to increase by 5 percent. This will lead to a higher demand for advanced car features, including smart lighting.”
• Social:
  In 2024, 70% of car buyers consider advanced lighting systems to be a very important purchase criterion. Younger consumers aged 18 to 34 are particularly sensitive to this trend and are increasingly interested in the technological content of their cars. In addition, the growing popularity of electric vehicles (EVs) is driving the demand for new lighting solutions. By 2024, almost 40% of new car buyers prefer smart lighting systems that optimize energy efficiency and visibility.
• Technological:
  The smart lighting market for exterior lights is seeing rapid technological developments, particularly in LED and OLED. By 2024, it is expected that over 60% of new vehicles will be equipped with lighting systems that can be adapted to the driving conditions, thanks to the development of sensors and artificial intelligence. Also, the integration of smart lighting with V2X communications is expected to increase road safety. By the end of this year, around 30% of new vehicles will be equipped with this technology.
• Legal:
  In 2024, it is essential for the car makers to conform to the international safety standards. The International Organization for Standardization has formulated a new standard for the functional safety of the car systems (ISO 26262), which also applies to the lighting systems. The manufacturers must meet these standards to avoid the risk of a lawsuit. The intellectual property rights are becoming more and more important. The number of patent applications for lighting technology increased to more than 1,200 in 2023. This reveals the importance of this field of technology.
• Environmental:
  The automobile industry is under pressure to reduce its CO2 emissions. Lighting technology plays a major role in this regard, in particular with regard to energy savings. LEDs are expected to reduce energy consumption in cars by as much as 75 per cent by 2024, compared with halogen lights. Also, the use of sustainable materials in the manufacture of automobiles is gaining in importance. By the end of the year, it is expected that 25 per cent of all new lighting products will contain at least some recycled materials. This development is in line with the world's sustainability goals.

Porters Five Forces

• Threat of New Entrants:
  The entry barriers to the market for exterior smart lighting for automobiles are moderate, due to the need for substantial capital investment in technology and production. The existing companies have brand loyalty and economies of scale that can be a barrier to new entrants. However, technological development and the growing demand for smart lighting solutions can encourage new entrants to enter the market.
• Bargaining Power of Suppliers:
  The suppliers' bargaining power in the field of smart lighting for the exterior of automobiles is relatively weak. There are many suppliers of components such as LEDs, sensors, and control systems, which makes it difficult to depend on a single supplier. The manufacturers can also change suppliers without incurring significant costs, which weakens the suppliers' bargaining power.
• Bargaining Power of Buyers:
  The buyers in the automobile exterior smart lighting market have considerable bargaining power because of the growing number of alternatives and the increasing emphasis on customization. The consumers are becoming more knowledgeable and demanding regarding the features and prices of products, which forces the manufacturers to offer more competitive prices and new, innovative products to retain customers.
• Threat of Substitutes:
  The threat of substitutes in the market for car exterior smart lighting is moderate. Although there are still traditional lighting solutions, the trend towards smart technology and the increased functionality creates a niche that is less prone to direct competition. Nevertheless, if alternative lighting solutions, such as the use of laser or other more advanced lighting systems, become more popular in the market, they could become a threat.
• Competitive Rivalry:
  Competition is high in the smart lighting for exterior vehicle lighting market, with many established and new entrants vying for market share. The companies in the market are constantly innovating and investing in R&D to differentiate their products. The rapid pace of technological development and the increasing demand for smart features have intensified the competition.

SWOT Analysis

• Strengths:
  • Enhanced safety features through improved visibility and signaling.
  • Integration with advanced driver-assistance systems (ADAS) for better vehicle control.
  • Growing consumer demand for innovative and customizable vehicle aesthetics.
• Weaknesses:
  • High initial costs associated with smart lighting technology.
  • Limited awareness and understanding among consumers regarding benefits.
  • Potential technical challenges in integration with existing vehicle systems.
• Opportunities:
  • Expansion of electric and autonomous vehicles driving demand for smart lighting.
  • Technological advancements in LED and OLED lighting solutions.
  • Partnerships with tech companies to enhance smart features and connectivity.
• Threats:
  • Intense competition from traditional lighting manufacturers and new entrants.
  • Regulatory challenges regarding vehicle lighting standards and safety.
  • Economic downturns affecting consumer spending on automotive upgrades.

Towards 2024, the global smart exterior lighting market will be characterized by its strengths, such as the enhanced safety and the demand for innovation, and its weaknesses, such as the high cost and the lack of awareness. Opportunities arise from the growing use of electric and self-driving vehicles, while threats come from competition and from the regulatory environment. Strategic alliances and technological developments will be crucial for securing the market’s opportunities and reducing its risks.