The automotive adhesives market is projected to grow from USD 6.6 billion in 2020 to USD 9.3 billion, at a CAGR of 5.9% between 2021 and 2026. The growing trend for lightweight and low carbon-emitting vehicles and the high demand for automotive adhesives from APAC are the drivers in the market. The major growth opportunities in the automotive adhesives market are in India, China, Brazil, Mexico, and other emerging economies. adhesives improve the aesthetic appeal of end products as bolts, rivets, and welds are not required to be used, and thus making these viable for numerous applications involving assembly line, body in white, and others.
COVID-19 Impact on the Global Automotive Adhesives Market
COVID-19 has made a significant economic impact on various financial as well as industrial sectors, such as travel and tourism, manufacturing, and aviation. The worst economic recession is expected during 2020-2021, according to World Bank and IMF. With the increasing number of countries imposing and extending lockdowns, economic activities are declining, impacting the global economy.
In the recent past, the global economy became substantially more interconnected. The adverse consequences of various steps related to the containment of COVID-19 are evident from global supply chain disruptions, weaker demand for imported products and services, and an increase in the unemployment rate. Risk aversion has increased in the financial market, with all-time low interest rates and sharp declines in equity and commodity prices. Consumer and business confidence have also reduced significantly.
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Assembly is the fastest-growing application in the automotive adhesives market.
With the increasing advancements in the automobiles, such as higher usage of sensors, infotainment systems, and body panels, the amount of adhesive usage has increased in the automotive industry. There is a vast demand arising from the APAC region after the maturity of the European and North American markets. APAC is the largest market for passenger cars and is expected to account for 60% of global production by 2025.
South America region follows APAC is also expecting positive growth due to countries such as Brazil and Argentina. These countries are witnessing growth in automotive manufacturing plants in the region.
Methyl methacrylate (MMA)-based automotive adhesives are expected to grow at the second-highest rate
The use of MMA adhesives in the automotive & transportation industry is increasing as they reduce the weight of vehicles and offer excellent performance characteristics. These adhesives find application in auto components as well as in the interiors and exteriors of automobiles. The use of adhesives has revolutionized the building and design processes in the automotive industry.
In automobile manufacturing, adhesives are used for joining seats, spoilers, tailgates, side skirts, bumpers, headlights, dashboards, and others. They are also used to bond newer materials in the automotive industry, such as ABS/PC, CFRP, aluminum, and coated metals.
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Mexico is the fastest-growing market for the automotive industry in North America
The GDP of Mexico was USD 1.08 trillion in 2020. Growing demand from the automotive industry is expected to boost the demand for adhesives in Mexico. However, growing environmental concerns and volatile prices of raw materials and crude oil are expected to hinder the market growth.
According to OICA 2019, the total production of vehicles in Mexico was 3.98 million units, including 2.6 million units of commercial vehicles and 1.38 million units of passenger cars. The rising population, improving lifestyle, and proximity to the US have favored the Mexican automotive industry. This growth is expected to fuel the automotive electronic parts & assemblies demand in the country, which is likely to drive the demand for automotive adhesives in Mexico.
According to the data of the National Institute and Statistics and Geography (Inegi), in 2020, the Mexican auto exports, primarily to the US, were 2,681,806 cars, a 20.85% decrease from the previous year. This led Mexico to the fourth position among the largest auto exporters in the world.