Expansion of LEDs into the Automotive Lighting Market

Following LED automotive lighting already having become a new standard in automotive accessories, high luminosity LEDs have expanded their application in the automotive lighting market. With the constant increase in capabilities of LED lighting, LED headlight demands are also continuing to rise. New facets are opening up propelling the market forward.
 
With general LED lighting prices rapidly decreasing, automotive lighting prices and gross profit comparatively remain stable making it a prime market in which LED lighting manufacturers are all rushing to stake their claim in.

 The new regulation by the EU that all future vehicles be equipped with Daytime Running Lights (DRL) is predicted to cause explosive growth in the LED automotive lighting market.

While the automotive components supply chain is relatively closed, firms that have been able to break their way into this niche market include big names like OSRAM, Philips Lumileds, and Nichia. LED automotive light manufacturers include Valeo, Automotive Lighting, Hella, Koito, Stanley, and Ichikoh who have a market share of 85 percent.

Aside from a relatively closed supply chain, another obstacle LED manufacturers face is that lighting verification time is longer, usually taking upwards of 1.5 to 2 years. Manufacturers thus need to input man power and R&D resources for an extended period of time. Nonetheless, once the supply chain is infiltrated, product price, gross profit performance, and orders are all stable.

 According to market research organization LEDinside, car headlights and DRL are in a LED introduction phase, where single unit prices remain high. This causes prices to drop more rapidly. 2013 experienced a price reduction of 16 percent and 13 percent respectively. Other automotive lights such as taillights and dashboard lights had a steadier decline in price for 2013 with prices dropping 5 percent and 1 percent respectively.

Following recent strict carbon emission regulations issued by the EU, LED automotive light standards have also become stricter but still continue to grow. In 2013 the EU issued new regulations that by 2020 carbon dioxide emission by all new vehicles for every kilometer must decrease from the current 130 grams down to 95 grams.

It is predicted that use of LED lighting by international automotive manufacturers will increase. LED manufacturers still need time in order to cultivate and earn trust and long-term orders from global big named automotive manufacturers.
 

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