Automotive Lighting Market

Automotive Lighting Market Size, Growth Report & Forecast

[378 Pages Report] Automotive Lighting market is projected to grow from USD 22.5 Billion in 2023 to USD 30.4 Billion by 2030, at a CAGR of 4.4%. The automotive lighting market is driven by government safety regulations, the development of cost-effective lighting solutions, and the rising demand for comfort & luxury, which drives the demand for interior lighting. The LED lighting market is leading due to its energy efficiency, durability, and advanced features like matrix and OLED technologies. Adopting ambient & decorative lighting in mid to premium-range vehicles is also expanding as manufacturers prioritize enhanced interior styling and refresh appeal with personalization features. Asia Pacific remains the largest market, propelled by increasing vehicle production and rapid industrialization.

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Market Dynamics

DRIVER: High demand for adaptive lighting systems in passenger cars and entry-level SUVs

The automotive lighting market is experiencing significant growth, primarily driven by the high demand for adaptive lighting systems with growing sales of mid- & high segment cars and SUV demand. These systems significantly enhance safety and comfort by adjusting the light beam based on driving conditions, especially during night driving or bad weather. Adaptive lighting helps prevent the dazzle effect, where headlights temporarily blind oncoming drivers.

Developed economies are leading this trend with increasing penetration of adaptive lighting systems, especially in high-end vehicles. For instance, in 2022-2023, BMW Group and Mercedes-Benz have already adopted adaptive front lighting systems in some models such as BMW X5, X6, X7 and AMG-GT, S-Class, and SL-Class by Mercedes-Benz. However, emerging markets like China and India, known for their significant automotive production, are rapidly adopting these technologies in passenger cars and mid-level SUVs. Moreover, government norms surrounding adaptive lighting have evolved to enhance road safety and driver comfort. In the US, the National Highway Traffic Safety Administration (NHTSA) legalized Adaptive Driving Beam (ADB) technology in 2022, previously only available in Europe. The technology adjusts headlights based on road conditions to avoid glare on other drivers, improving visibility and safety. Japan also mandated automatic headlamps in 2020 to reduce pedestrian accidents at dusk. Suppliers have adapted by developing cost-effective, advanced lighting systems to meet these regulatory requirements. Suppliers can leverage innovations like sensors and ADB technology to provide competitive lighting solutions that enhance vehicle safety and comply with international standards, ensuring broader market adoption.

Several key players are driving advancements in this space. For instance, the Koito Group's Adaptive Driving Beam (ADB) headlight technology leverages artificial intelligence from Reality AI to keep high beams perpetually activated until oncoming traffic is detected, significantly reducing glare. In October 2018, Hyundai Mobis launched the world's first advanced adaptive driving beam, integrated with the advanced driver assistance system (ADAS) to boost driving safety. HELLA GmbH & Co. KGaA is another key player offering dynamic adaptive front-lighting systems (AFS), which adjust illumination according to vehicle speed and steering angle to optimize road visibility. These innovations and government regulations promoting road safety are expected to boost adoption in mid-range vehicles.

RESTRAINT: High Cost of LED Lights

The high cost of LED lights is a major restraint for the automotive led lighting market. While halogen and Xenon lights have lost popularity due to inefficiencies like energy wastage and delayed brightness, LEDs offer advantages such as brighter light, energy efficiency, and flexibility in design. However, LEDs are significantly more expensive due to costly materials like indium gallium nitride and aluminum gallium arsenide. Using projectors with LEDs further increases the cost, making LED lighting systems primarily accessible in mid to high-end vehicles. Despite superior performance, advanced technologies like OLED and matrix LEDs remain restricted to premium cars due to their high costs. Brands like Mercedes-Benz, JLR, BMW, Audi, Ferrari, and Lamborghini have already incorporated LED systems into their premium vehicles. Repair costs for LED lighting are also a concern, with SRA (Sécurité et Réparation Automobiles) surveys showing a 15.6% price increase for LED lighting in France in 2023. However, as the LED light market expands and reaches mass customers, LED lighting suppliers will likely notice the fall in prices and be able to improve their profit margins.

OPPORTUNITY: Evolution of new lighting technologies

The evolution of new technologies like Matrix LED, OLED, and laser lighting is transforming the automotive lighting industry. For instance, matrix LED headlights use multiple small LEDs that can be individually controlled to adjust light distribution and avoid dazzling other drivers. Audi's Matrix LED headlights can be controlled with camera and sensor-based adjustments.

OLED lighting is another emerging technology that emits light across large surfaces. It is mainly found in the premium vehicles segment in the current scenario and is expected to grow over the coming years. Alternatively, laser lighting, known for its bright light and small size, is already used in high-end models like the BMW i8 and Audi R8 LMX. This technology offers extended range and improved visibility. Adaptive Front Lighting Systems (AFS) enhance safety by adjusting the headlight angle based on driving conditions. New developments like Valeo's Premium Adaptive Driving Beam (ADB) technology improve lighting while reducing glare for oncoming drivers. These advancements offer a significant opportunity for automotive lighting suppliers to innovate and capture market share. OEMs focus on improving design for automotive lighting, mainly for headlights, to demonstrate a fresh look; this advanced lighting solution would make life easier for the R&D and product development team as it can be designed to be much smaller and more efficient with laser light. As global demand for premium vehicles increases, the demand for advanced lighting technologies will also increase. Companies often install these vehicles with the latest advanced lighting technologies, such as adaptive driving beams (ADB), matrix LEDs, laser, cornering, and auto leveling. Premium car buyers prioritize enhanced visibility, safety, and personalized lighting experiences. For instance, high-end premium vehicles such as the BMW i8 and AUDI R8 LMX models are equipped with laser and OLED lights. Also, the rising penetration of premium vehicles fitted with luxury items in Asian countries will prompt regional players to make advancements in these technologies at competitive prices to extend the customer base; the demand is likely to boost the potential suppliers in the region.

CHALLENGE: Less penetration of advanced lighting in commercial vehicles

The limited penetration of advanced lighting systems in commercial vehicles presents a challenge for the automotive lighting industry. Freight trucks and other commercial vehicles operate extensively, often covering thousands of miles daily. Given their long-time and continuous operations, integrating advanced lighting technologies like adaptive driving beams and Matrix LEDs may only be feasible for some manufacturers due to high costs and concerns about durability and reliability. Advanced lighting systems offer significant benefits, such as improved visibility and safety, which are crucial for long-haul drivers. However, their high expense compared to traditional halogen or xenon headlights challenges fleet managers who prioritize operational efficiency and profit margins. The cost barrier remains a significant hurdle, especially for fleets that operate under tight budgets. Regulations also play a role in the adoption of advanced lighting. For instance, European regulations mandate that trucks have automatic leveling and LED headlamps if they exceed 2,000 lumens (usually xenon). Despite these requirements, only some commercial vehicle manufacturers have incorporated advanced lighting systems due to their high costs.

Automotive Lighting Market Ecosystem.

The major OEMs of the automotive lighting market share have the latest technologies, diversified portfolios, and strong distribution networks globally. The major players in the Automotive Lighting Market include Robert Bosch (Germany), HELLA GmbH & Co. KGaA (Germany), Johnson Electric (China), Denso Corporation (Japan), and Continental AG (Germany).

The ambient lighting segment will dominate during the forecast period in the adaptive lighting market.

Ambient lighting is a leading segment in the adaptive lighting market. In modern vehicles, ambient lighting enhances the cabin environment, making it more comfortable and visually appealing. Beyond aesthetics, ambient lighting is crucial in safety and user experience. This type of lighting is designed to enhance the interior experience of vehicles by adding customizable color and intensity effects. These lighting systems also support take-over requests (TORs) in semi-autonomous vehicles, alerting drivers to pay attention when necessary.

Ambient lighting is becoming more common in luxury and high-end vehicles. Modern cars use RGB (Red, Green, and Blue) LEDs that can change colors and brightness quickly to show different actions or statuses. This looks great and helps with safety by providing clear visual signals. For instance, in the Mercedes-Benz EQS, the ambient light changes color based on the air conditioning—blue for cooling and red for heating. High-end models like Rolls-Royce and BMW i7 also use ambient lighting in the ceiling and footrests to create a comfortable and well-lit space for passengers.

Ambient lighting is promising in top-end variants of mid-range cars. This trend is mainly found in countries such as India, China, Thailand, and Indonesia, where it costs less. Moreover, dealers provide customization offers per company standards without violating warranty, giving better customer experience. As lighting technology continues to improve, the demand for ambient lighting is expected to grow, driven by innovations and the desire for more personalized and functional cabin environments.

LEDs in the electric vehicle lighting market are growing fastest during the forecast period.

For several reasons, LED lighting quickly becomes the top choice for electric vehicles (EVs). These are used in applications such as tail lamps, side indicators, headlamps, parking lights, reverse lights, fog lights, daytime running lights (DRL), and interior cabin lights. LEDs are energy-efficient, using less power while delivering bright, clear light. This helps extend the driving range of EVs, which are designed to be energy-efficient. New advancements, such as matrix LEDs and OLEDs, have improved LED brightness, color options, and design flexibility.

Automakers like Tesla, BMW, and Mercedes-Benz are increasingly incorporating LEDs into their models, using them to create distinctive lighting signatures and improve the aesthetic appeal of their vehicles. LEDs also offer significant advantages in durability and lifespan compared to traditional halogen bulbs, reducing maintenance costs for vehicle owners. Their rapid response times contribute to advanced safety features, including adaptive lighting systems. Additionally, LEDs are compact and produce less heat, making them ideal for modern EV designs and battery safety. With electric vehicle sales rising and LED production costs expected to drop, LEDs are set to lead the global EV lighting market. This growth is robust in regions like Asia Pacific, where LED use is increasing rapidly.

Headlights are expected to witness the fastest growth in the two-wheeler lighting market.

The headlights segment will grow at a higher rate for the two-wheeler lighting market. The higher growth of the headlight segment is mainly influenced by the rising adoption of LED technology for front lighting. Halogen lights hold the maximum share for headlamps. However, LED lights have grown at a promising pace in recent years. Earlier, LED headlamps were limited to expensive bikes only. Now, two-wheelers sold in developing countries are also equipped with LED headlamps owing to various advantages, including power saving, sharp & bright view, and improved appearance. In recent years, many motorbikes and scooters have launched with LED front lighting in the global market. For instance, in June 2023, KTM launched the KTM 200 Duke, equipped with LED headlamps. In Oct 2023, Royal Enfield launched its Super Meteor 650 in the US and Canada. This bike has a circular LED headlamp, the company’s triple navigation system, Bluetooth connectivity, and a USB charging port. In August 2023, Hera launched its Hero Karizma XMR, equipped with LED projector lights and an H-shaped DRL pattern. In 2022, OLA launched its Ola S1 Pro is equipped with two projector lamps and the smiley-faced LED daytime running light. Modern two-wheeler OEMs increasingly focus on using LED lights for headlights, creating futuristic opportunities for the two-wheeler lighting suppliers.

Asia Pacific is the largest region in the Automotive Lighting market.

The Asia Pacific (APAC) region is the largest automotive oled lighting market due to its rapid industrialization and infrastructural growth. Increased automobile production and rising disposable incomes across emerging economies are key drivers. This region offers significant opportunities for automotive OEMs as the growing purchasing power fuels vehicle demand.

China, Japan, India, and South Korea are significant players in the APAC automotive sector. China, in particular, has seen a surge in demand for premium vehicles, leading to increased automotive lighting needs. The country's significant investments in automotive production and expanding collaborations, like HELLA's recent project with BMW Group and other partners, further drive market growth. With automotive giants like DENSO and Koito Manufacturing Co., Ltd., Japan follows, contributing to advanced lighting solutions. Government initiatives and OEM efforts to boost exports bolstered South Korea's automotive growth. Companies such as Hyundai Motor Company and Kia Motors are at the forefront of developing new vehicles and lighting technologies.

Meanwhile, India's automotive market is expanding due to increased investments and a shift towards advanced technologies. Despite the current dominance of low-cost halogen technology, the LED market is gaining traction due to its visual effects and longevity advantages. The region's diverse lighting needs are met by halogen and LED technologies, with LEDs gaining ground as prices decrease and consumer preferences shift towards more advanced solutions.

Key Market Players

The Automotive Lighting market is consolidated with players such as Koito Manufacturing (Japan), Magnetic Marelli (Italy), Valeo (France), HELLA GmbH & Co. KGaA (Germany), Stanley Electric (Japan), are the prominent players in the Automotive Lighting market. These companies adopted new product launches, partnerships, and joint ventures to gain traction in the Automotive Lighting market.

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Scope of the Report

With the given market data, MarketsandMarkets offers customizations per the company’s specific needs.

The study segments the Automotive Lighting Market:

Automotive Lighting Market, By Technology Type

• HALOGEN
• LED
  • OLED
  • MATRIX LED
• XENON/HID

Automotive Lighting Market, By Application

• Front Lighting
• Rear Lighting
• Side Lighting
• Interior Lighting

Automotive Lighting Market, By Vehicle Type

• Passenger cars
• Light Commercial Vehicles
• Trucks
• Buses

Automotive Adaptive Lighting Market, By Type

• Front Adaptive Lighting
  • Auto On/Off
  • Bending/Cornering Lights
  • High Beam Assists
  • Headlight Levelling
• Rear Adaptive Lighting
• Ambient Lighting

Electric & Hybrid Lighting Market, By Vehicle Type

• Battery Electric Vehicle (BEV)
• Plug-in Hybrid Vehicle (PHEV)
• Fuel-cell Electric Vehicle (FCEV)

Electric & Hybrid Lighting Market, By Technology

• HALOGEN
• LED
• XENON/HID

Electric & Hybrid Lighting Market, By Application

• Exterior Lighting
• Interior Lighting

Two-Wheeler Lighting Market, By Position

• Font
• Side
• Rear

Automotive Lighting Market, By Region

• Asia Pacific
• Europe
• North America
• Rest of the World

Recent Developments

• In July 2024, HELLA collaborated with Audi and developed a new headlamp concept for the Q6 e-tron. It features adaptive matrix LED headlamps with customizable digital daytime running lights, allowing users to select up to eight unique light designs.
• In May 2024, HELLA showcased its latest lighting and electronic solutions for municipal vehicles at IFAT. The LED combination headlamp C240 integrates essential lighting functions and a customizable logo option, and the Bi-LED SlimLine headlamp offers a unique look through colored bezels.
• In November 2023, HELLA launched its new HELLA Value Fit BLADE auxiliary headlamp series primarily for trucks and off-road vehicles. These auxiliary headlamps are equipped with innovative LED lighting technology and provide a new growth path entry into the world of LED vehicle lighting.
• In July 2023, HELLA and Porsche launched the world's first high-resolution headlamp powered by matrix LED technology. This raised automotive lighting technology to a new level.
• In January 2023, Cepton and Koito Manufacturing Co., Ltd. launched their new LiDAR integration solutions at CES 2023.
• In December 2022, OSRAM launched new automotive forward lighting or headlamp LED units named OSLON Black Flat X series (OBF X) with a higher efficiency and almost unlimited operating lifetime.
• In June 2021, Hyundai Mobis developed a lighting grille that applies LED lighting function to the front grille. This can show externally that the car is in autonomous or EV charging mode.
• In January 2019, Valeo and Cree, Inc. (US) announced their joint development of the first complete high-definition (HD) LED array solution for automotive lighting systems. Valeo PictureBeam Monolithic is the first full HD lighting system that provides glare-free and high-beam road marking functions with high-performance low and high beams in a single compact solution.

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