Automotive Shock Absorber Market Analysis

Automotive Shock Absorber Market (Global, 2024)

Introduction

The shock absorber market is an important part of the automobile industry, as it is responsible for the performance, safety, and comfort of the car. The demand for high-quality shock absorbers has been growing with the development of the car. The shock absorber is a component of the car that absorbs shocks, and it is a part of the car that controls the car's driving performance. The shock absorber market is a very diverse market, and there are many different types of products, such as the traditional hydraulic shock absorber, the gas-filled shock absorber, and the advanced electronic shock absorber, which can meet the shock absorber needs of various vehicles and consumers. The shock absorber market is also influenced by the safety of the car and the development of the electric and hybrid car. The shock absorber market is expected to be further driven by the growth of automobile production and the development of the aftermarket. The shock absorber market is a very complex market, and it is necessary for industry participants to understand the intricacies of this market and to grasp the development trend of the industry.

PESTLE Analysis

Political

In 2024, the car industry is heavily influenced by the laws of government and the reduction of carbon dioxide. For example, the European Union has set a target of reducing car CO2 emissions by 55% by 2030. This directly affects the design and production of all car components, including shock absorbers. Also, the United States government has introduced a tax credit of $ 7,500 for the purchase of electric vehicles. This gives car manufacturers an incentive to improve the performance and comfort of electric vehicles.

Economic

The global automobile industry is expected to experience a fluctuation in the price of raw materials that directly affect the automobile shock absorber market. In 2024, the price of steel, a basic material for shock absorbers, is expected to rise to $800 a ton, an increase of 10% over the previous year, due to the disruption of supply chains. Furthermore, the number of employees in the U.S. automobile industry is expected to increase to approximately 1.5 million by 2026, indicating a strong labor market that could influence the production and costs of shock absorbers.

Social

Moreover, the increasing preference for cars that offer higher comfort and safety has an immediate effect on the demand for advanced shock absorbers. In 2024, 68% of consumers will prefer a car that is comfortable and well-balanced to one that is fast and nimble. This is why manufacturers are investing in new shock absorber technology. Also, the urbanization of the world’s population, which will account for 55% of the world’s population by 2024, will increase the demand for cars that can cope with a wide range of road conditions. This, in turn, will increase the demand for shock absorbers.

Technological

The development of automobile shock-absorbers is rapidly advancing, and the introduction of semi-active and reversible systems. In 2024 it is estimated that 30 per cent of new cars will be fitted with shock-absorbers controlled by a microprocessor. They will be able to react instantly to any changes in the road conditions, and the vehicle will be more stable and comfortable. Also, the shock-absorbers will be able to transmit the shock-absorber data in real time, and thus provide the information for a more accurate diagnosis and a better performance, which will be of increasing importance in the competitive car market.

Legal

In 2024, the safety of automobiles is the first concern of manufacturers. In the United States, the National Highway Traffic Safety Administration has set a minimum performance standard for new cars that include criteria for shock absorbers. It is the law, and manufacturers are fined up to five million dollars per violation. So they have an incentive to develop high-quality shock-absorbers that meet the legal requirements. In addition, patents on automobiles have increased by 15 percent in the past year. This shows how important it is for companies to be inventive.

Environmental

The automobile shock-absorber market is influenced increasingly by the principles of environmentalism. In 2024, manufacturers are to use materials with a low carbon footprint, and by that time, the goal is to manufacture at least 25 percent of shock absorbers from recycled materials. Demand for these products is based on the desire of consumers for sustainable products and on the requirements of governments for reducing waste. The automobile industry is also under pressure to reduce its carbon footprint, and the average car produces about 4.6 tons of CO2 a year. Therefore, shock absorbers must contribute to vehicle efficiency and lower emissions.

Porter's Five Forces

Threat of New Entrants

The shock-absorbers market is moderately protected against competition, since it requires a substantial investment in technology and equipment. The major players benefit from economies of scale and brand loyalty, which can deter new entrants. However, technological developments and the emergence of electric vehicles may create opportunities for companies with inventive ideas to enter the market.

Bargaining Power of Suppliers

The suppliers’ bargaining power in the shock-absorber market is relatively low. There are many suppliers of the materials and components, which leads to a highly competitive situation. The suppliers’ power is thus limited. If the price rises or the quality falls, the manufacturers can easily change to a different supplier. Yet the specialized suppliers of some of the components may have more power than others.

Bargaining Power of Buyers

Buying power of the purchasers of automobile shock absorbers is high because of the multiplicity of the products available and the ease of comparison between them. With the development of e-commerce and the easy access to information, the consumers are able to make decisions based on their own knowledge, which pushes the manufacturers to offer lower prices and higher quality. Furthermore, large automobile manufacturers can negotiate favorable terms for themselves due to their high purchasing power.

Threat of Substitutes

The threat of substitutes in the automobile shock-absorber market is moderate. Although shock absorbers are still widely used, alternatives such as air suspension and advanced damping are also emerging. Those alternatives could be used to increase the performance or comfort of the car, but the established nature of shock absorbers protects them from substitution.

Competitive Rivalry

Competition in the car shock absorber market is intense, with many players competing for market share. Price, quality, innovation and customer service are the main factors that drive competition. The presence of both established players and new entrants has further increased competition, leading to continuous improvements in products and services. Competition is also strong on a global scale.

SWOT Analysis

Strengths

• Established demand due to the growing automotive industry.
• Technological advancements leading to improved product performance.
• Diverse applications across various vehicle types, including electric and hybrid vehicles.

Weaknesses

• High competition leading to price wars and reduced profit margins.
• Dependency on the automotive sector's overall health and trends.
• Challenges in sourcing raw materials due to global supply chain issues.

Opportunities

• Increasing focus on vehicle safety and comfort driving demand for advanced shock absorbers.
• Growth in electric vehicle production creating new market segments.
• Potential for expansion in emerging markets with rising automotive sales.

Threats

• Economic downturns affecting consumer spending on vehicles.
• Rapid technological changes requiring continuous innovation.
• Regulatory changes impacting manufacturing processes and materials used.

Summary

The Automotive Shock Absorber Market will be characterized by a strong demand in 2024, driven by the growth of the automobile industry and the technological development. The market will be faced with challenges such as high competition and dependence on the overall health of the automobile industry. Opportunities will be presented by a growing concern for vehicle safety and the development of electric vehicles. Threats will be economic fluctuations and the need for continuous innovation. In order to take advantage of opportunities and reduce the threat, companies must use their strengths and reduce their weaknesses.