On-highway Vehicle Lighting Market Size, Share & Trends Analysis Report By Product (LED, LASER), By Application (Headlights, Interior Lights), By Vehicle Type, By Region- Global Industry Analysis, Share, Growth, Regional Outlook and Forecasts, 2024-2033

The global on-highway vehicle lighting market size was exhibited at USD 27.98 billion in 2023 and is projected to hit around USD 45.58 billion by 2033, growing at a CAGR of 5.0% during the forecast period of 2024 to 2033.

Key Takeaways:

• Asia Pacific accounted for the largest revenue share of over 51% in 2023.
• The LED segment dominated the market and captured around 40% of the on-highway vehicle lighting demand in 2023.
• The headlight application segment captured over 61% of the on-highway vehicle lighting market share in 2023.
• Considering the type of vehicle, the passenger car segment accounted for the largest revenue share of over 40% in 2023 and is expected to maintain its dominance over the projected period.

On-highway Vehicle Lighting Market by Overview

The on-highway vehicle lighting market is a dynamic and evolving sector within the automotive industry, marked by advancements in technology, regulatory changes, and a growing emphasis on safety and energy efficiency. This market overview aims to provide a comprehensive insight into the key factors shaping the on-highway vehicle lighting landscape.

On-highway Vehicle Lighting Market Growth

The robust growth of the on-highway vehicle lighting market can be attributed to several key factors propelling its expansion. Technological advancements, particularly the widespread adoption of advanced lighting solutions such as LED and OLED, have significantly enhanced visibility, energy efficiency, and design flexibility. Stringent regulatory frameworks focused on vehicle safety standards, such as FMVSS 108 and ECE regulations, act as catalysts for innovation within the industry. Market dynamics are further influenced by the segmentation of products, including headlights, taillights, interior lights, and signal lights, each playing a crucial role in augmenting safety and aesthetics. The market's diversity extends to various vehicle types, encompassing passenger cars, commercial vehicles, and two-wheelers, with distinct lighting requirements based on vehicle size and purpose. Noteworthy market players like Hella, Osram, Philips, and Stanley Electric contribute to the sector's growth through a commitment to research and development.

On-highway Vehicle Lighting Market Report Scope

.On-highway Vehicle Lighting Market Dynamics

The dynamics of the on-highway vehicle lighting market are intricately shaped by two primary factors: technological advancements and the evolving regulatory landscape. Firstly, the industry is experiencing a paradigm shift with the widespread adoption of advanced lighting technologies, notably LED and OLED solutions. These technologies not only enhance visibility and energy efficiency but also provide manufacturers with greater design flexibility. The integration of adaptive lighting systems, capable of adjusting light beams based on driving conditions, exemplifies this technological progression, contributing to heightened safety standards.

Secondly, the regulatory landscape plays a pivotal role in steering the on-highway vehicle lighting market. Stringent regulations, such as FMVSS 108 in the United States and ECE regulations in Europe, impose compliance requirements on manufacturers, pushing them to continually innovate. These regulations are focused on bolstering vehicle safety and reducing emissions, fostering a climate of innovation in the development of lighting systems. Manufacturers must navigate these regulatory frameworks adeptly, ensuring their products meet or exceed mandated standards while staying attuned to evolving requirements.

On-highway Vehicle Lighting Market Restraint

The on-highway vehicle lighting market faces notable restraints, with two key factors impacting its growth and development. Firstly, cost constraints pose a significant challenge for manufacturers and consumers alike. The integration of advanced lighting technologies, such as LED and OLED solutions, often comes with a higher initial cost. Manufacturers must strike a delicate balance between incorporating cutting-edge technologies and maintaining competitive pricing to cater to a broad consumer base. Additionally, consumers may be hesitant to adopt vehicles equipped with these advanced lighting systems due to concerns about potential repair and replacement costs.

Secondly, supply chain disruptions and global economic conditions represent another significant restraint for the on-highway vehicle lighting market. The industry relies on a complex network of suppliers and manufacturers across different regions. Disruptions in the supply chain, whether caused by geopolitical events, natural disasters, or global economic downturns, can lead to delays in production and increased costs. These uncertainties create challenges for market players in maintaining a stable and efficient supply chain, impacting their ability to meet demand consistently.

On-highway Vehicle Lighting Market Opportunity

The on-highway vehicle lighting market presents compelling opportunities, primarily driven by the increasing focus on electric vehicles (EVs) and the rise of autonomous driving technology. Firstly, the surge in the adoption of electric vehicles creates a significant opportunity for innovation in lighting solutions tailored to the unique requirements of these platforms. As EVs gain traction, manufacturers have the chance to develop lighting systems that are energy-efficient, lightweight, and complement the distinct design features of electric vehicles. This shift toward electrification opens up a new avenue for market players to differentiate their offerings and cater to the evolving needs of the automotive landscape.

Secondly, the ongoing development of autonomous vehicles represents a noteworthy opportunity for the on-highway vehicle lighting market. As vehicles become more autonomous, there is an increased emphasis on communication between the vehicle and its surroundings. Lighting systems play a crucial role in conveying information to pedestrians, cyclists, and other drivers. Innovations such as smart lighting, which can dynamically adjust based on the vehicle's status and surroundings, become integral in enhancing safety in autonomous driving scenarios. The demand for advanced lighting technologies to support the visual communication requirements of autonomous vehicles presents a lucrative opportunity for manufacturers to pioneer cutting-edge solutions in this rapidly evolving segment.

On-highway Vehicle Lighting Market Challenges

The on-highway vehicle lighting market faces notable challenges that impact its trajectory and development. Firstly, stringent regulatory requirements represent a significant hurdle for manufacturers. Compliance with various safety standards such as FMVSS 108 and ECE regulations necessitates continuous adaptation and innovation in lighting systems. The challenge lies in meeting these regulatory standards while simultaneously addressing the evolving demands of consumers for advanced features, aesthetics, and energy efficiency. Manufacturers must navigate this complex landscape to ensure their products not only comply with safety regulations but also align with market expectations.

Secondly, the industry contends with the constant pressure of balancing cost considerations with the integration of advanced lighting technologies. The implementation of cutting-edge solutions like LED and OLED comes with an inherent cost, impacting both manufacturing expenses and the final retail price of vehicles. Striking a balance between providing technologically advanced lighting systems and keeping products cost-competitive is a persistent challenge. Consumers may be hesitant to embrace vehicles equipped with these advanced technologies if perceived costs, including potential repair and replacement expenses, are perceived as prohibitive.

Segments Insights:

Product Insights 

The LED segment dominated the market and captured around 40% of the on-highway vehicle lighting demand in 2023. The segment is projected to register a CAGR exceeding 4% over the forecasted period owing to the growing demand for LEDs for passenger cars, especially in countries such as Germany, China, India, and the U.K. LED lamps can deliver cool daylight color and instant brightness, thereby improving visibility and reducing the light glare ratio compared to the adaptive high beam lights. Furthermore, LED lamps can also be used as Center High-mounted Stop Lamps (CHMSL) and Daytime Running Lights (DRLs). For instance, Cadillac CT6 offers a headlight that includes 16 LEDs that flank the headlight in long vertical lines. The 16 LEDs are used as both DRLs and DRL-integrated turn-signal indicators. 

The LASER segment is anticipated to record the highest CAGR of over 6.8% over the forecast period due to the growing demand for luxury vehicles across the emerging and developed economies. A LASER produces powerful bright light by stimulating gas with a laser beam. The benefit of incorporating LASER technology into vehicle headlamps is its compact size and ability to illuminate a significant stretch of the road compared to other light sources. In general, LASER lights emit around 160-170 lumens per watt, which is much higher than what LEDs emit, i.e., 100-120 lumens per watt. 

Application Insights

The headlight application segment captured over 61% of the on-highway vehicle lighting market share in 2023 and is projected to retain its dominance in the forthcoming years. Headlights form an essential part of an automotive lighting unit. They comprise front headlamps, DRLs and side lamps, and fog lamps. The demand for headlights is driven by the growing production of motor vehicles and changing prices of light sources used in these vehicles, such as LASER, halogen, LED, and HID. Moreover, constant advancements in technology focusing on headlamp designs to offer long-range visibility in low-light conditions are also fueling on-highway vehicle lighting market growth.

The interior lights segment is projected to record the highest CAGR of around 5.3% over the forecast period due to the increasing use of LEDs in internal lights. The declining prices of LEDs and increasing awareness about energy efficiency have attracted more consumers toward ambient lighting. Ambient lighting is the soft illumination around instrument clusters, door handles, dashboards and footwells.

Vehicle Type Insights 

Considering the type of vehicle, the passenger car segment accounted for the largest revenue share of over 40% in 2023 and is expected to maintain its dominance over the projected period. The segment is expected to record the highest CAGR during the forecast period due to the increasing vehicle fleet and vehicle per capita globally. Passenger cars occupied the majority share of over 70% of total vehicle production in 2020. In Europe, according to ACEA, vehicles per capita were recorded at 569 vehicles per 1,000 inhabitants in 2019. Besides, emerging economies such as China and India are expected to further escalate the market in the future.

The heavy trucks segment is projected to expand at the second-highest CAGR around 4.8% from 2022 to 2030. The segment growth can be attributed to the growing demand for heavy trucks across the transportation and logistics sectors. According to OICA, global heavy truck production witnessed a rapid increase of over 5% in 2020, reaching 4.4 million units. Asia Pacific accounted for over 80% of the global heavy truck production in 2020, followed by North America.  

Regional Insights

Asia Pacific accounted for the largest revenue share of over 51% in 2023 and is expected to retain its dominance during the period in focus. It is projected to register the highest CAGR from 2022 to 2030, due to the improved demand for passenger vehicles in various emerging economies such as India and China. As per the data published by the OICA, over 91 million new commercial and passenger vehicles were registered or sold globally in 2019. Of this, over 48% of the global total were sold in Asia. This has led to a substantial increase in demand for on-highway vehicle lighting in the region.

Europe is estimated to register the second-highest CAGR of over 5% over the forecast period. Germany produced over 15% of Europe’s overall motor vehicle production. The country is home to motor vehicle manufacturing leaders such as BMW, Audi, Mercedes, Volkswagen, Ford, and Porsche. Besides, in the U.K., the government has banned the aftermarket sale of HID lighting kits used to covert standard halogen lamps to standard HID xenon headlamps. This has opened prospective opportunities for LED light sources, thereby fueling industry expansion.

Some of the prominent players in the on-highway vehicle lighting market include:

• KOITO MANUFACTURING CO., LTD.
• Koninklijke Philips N.V.
• Marelli Automotive Lighting
• Valeo
• Zizala Lichtsysteme GmbH (LG Electronics)
• TYC Genera
• Spyder Auto
• Maxxima
• Optronics International LLC

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2023 to 2033. For this study, Nova one advisor, Inc. has segmented the global on-highway vehicle lighting market.

Product

• Halogen
• HID
• LED
• Incandescent
• LASER

Application

• Headlight
• Exterior Lights
• Internal Lights

Vehicle Type

• Motorcycle
• Passenger Cars
• Buses
• Light Trucks (Class 1-3)
• Medium Trucks (Class 4-6)
• Heavy Trucks (Class 7 & 8)

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa (MEA)