Increasing requirement for automotive vehicles in different end-use industries is expected to drive the automotive steel casting market. In automotive steel casting, the steel is heated until it reaches a molten state and subsequently, this liquid steel is used to manufacture various components of the vehicle. In this process, liquid steel is delivered into the hollow mold, which has different shape and size. Once the steel is cooled, it is removed from the mold as a finished product. This steel casting is also called as hot chamber die casting, which is commonly utilized to manufacture complex shapes and structures of the vehicle.
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Key Drivers of Automotive Steel Casting Market
Rise in disposable income of consumers has increased their spending power, which in turn is driving the sales of automotive vehicles and boosting the automotive steel casting market. Moreover, increase in government initiatives for infrastructure development increases the efficiency of transportation and distribution channels, which further propels the market. Rise in demand for automotive vehicles from different industries such as mining, construction, oil & gas, transportation, and logistics increases the need for automotive parts.
Automotive manufacturers are using advanced technology to manufacture vehicles, which decreases their production time and cost, thereby enhances the use of steel casting components. Moreover, manufacturers employ latest technologies to develop durable components, which further improves the quality of the product. Furthermore, rising demand for electrification of vehicles is also driving the market.
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Challenges in Automotive Steel Casting Market
The high cost associated with the automotive die casting process hampers the market. Automotive steel casting is an expensive method as compared to other molding processes. Moreover, the cost required for steel purchase is also high as compared to that of other metals, which in turn retrains the market.
The outbreak of COVID-19 hampered several businesses across the world, while automotive manufacturing was stopped, which further declined automotive sales and hindered the steel casting market. Along with automotive manufacturing, the steel casting industry also witnessed a shutdown, which also hampered the market. Moreover, disruption of global supply chains resulted in shortage of supply of raw material that is required for the production of automotive parts. This supply shortage restrained the automotive steel casting market.
Opportunities in Automotive Steel Casting Market
Steel components are also used in electric and hybrid electric vehicles, which is expected to drive the automotive steel casting market during the forecast period. Demand for electric and hybrid vehicles is rising across the world due to a rise in fuel prices. Increasing government regulations for low vehicle carbon emission further boosts the manufacturing of electric vehicles. Increase in environment regulations prompt manufacturers to opt for fuel-efficient automotive solutions, which in turn is anticipated to drive the steel casting market.
Manufacturing of luxury vehicles and sports cars requires high quality automotive components, while steel is one of the premium quality metals that can be used in luxury vehicles. Therefore, a rise in the demand for luxury vehicles in developed and developing countries is anticipated to propel the automotive steel casting market.
Automotive Steel Casting Market in Asia Pacific to Expand Significantly
The automotive steel casting market in Asia pacific is estimated to expand significantly due to an increase in population, rise in urbanization, aggressive investments by vehicle manufacturers, and initiatives by governments for infrastructural development. Production of automotive vehicles, especially passenger cars and commercial vehicles, is rising due to the easy availability of steel in Asia Pacific. Moreover, increase in number of original equipment manufacturers of automotive parts in Asia Pacific further boosts the steel casting market in the region. Furthermore, the demand for premium vehicles, hybrid and electric vehicles is rising in Asia Pacific, which is estimated to drive the market in the region. Companies in China and other countries in the region are focusing on the development of electric vehicle charging stations, which is projected to increase the sales of EV, HEVs, and PHEV vehicles. Additionally, Europe has large number of automotive manufacturers who are investing in the design of eco-friendly components for their vehicles, which is estimated to further fuel the automotive steel casting market in the region.
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Key Players Operating in Automotive Steel Casting Market
The automotive steel casting market is highly consolidated. A few of the key players operating in the global automotive steel casting market are:
Hitachi Metals Co., Ltd.
Baosteel Group Corporation
HBIS Group Co., Ltd.
Nippon Steel Corporation
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