Automotive Suspension System Market Analysis

Automotive Suspension System Market (Global, 2024)

Introduction

The market for automobile springs is about to undergo a great transformation. New technological developments and changing preferences of consumers are reshaping the market for automobile springs. In particular, the demand for new suspension systems that improve comfort, driving dynamics and safety is growing as vehicles become more complex. This market comprises a variety of different components, including shock absorbers, struts, springs and control arms, all of which play an important role in the dynamic performance of a vehicle. In addition, the growing trend towards electric and driverless vehicles is putting increased pressure on manufacturers to develop new materials and designs that not only increase efficiency but also reduce weight and increase strength. The market for springs is undergoing a major transformation, and it is vital for companies to be aware of the current trends, challenges and opportunities in this market if they are to maintain a competitive advantage in this dynamic industry.

PESTLE Analysis

Political

In 2024, the market for automobile suspensions will be influenced by a variety of political factors, such as government regulations aimed at increasing vehicle safety and lowering pollution. In Europe, for example, the European Union has imposed a 2024 deadline for new vehicles to meet a strict safety standard. This standard includes a requirement that new vehicles have the most advanced suspensions that improve stability and handling. This regulation is expected to affect the 15 million vehicles produced in Europe each year. And to meet the regulation, automakers will need to invest in advanced suspensions.

Economic

In 2024 the economic picture shows a notable rise in the purchasing power of consumers, accompanied by an estimated increase in income of 5% in the main markets. The average price of a car equipped with a high-tech suspension is now $35,000, up from $33,000 in 2023. The United States alone is expected to have some 1.5 million workers in the motor industry, which will help support the growth of the suspensions market.

Social

In 2024, social trends showed a marked preference for vehicles with enhanced comfort and safety features, including advanced suspension systems. The preference for comfort and safety in the purchase of a vehicle was reflected in a survey indicating that 68 per cent of consumers were looking for such features. As a result, the manufacturers focused on developing new suspension systems. A further trend was the increasing popularity of electric vehicles. In the cities, 40 per cent of buyers wanted electric vehicles with superior suspension systems to improve the driving experience.

Technological

In the year 2024, the automobile suspension system market was undergoing rapid transformation. The emergence of intelligent suspension systems, which use sensors and intelligent control technology, was gaining ground. Companies were investing in R&D, spending over $500 million on the development of active suspension systems, which could be adjusted according to road conditions in real time. This technology would be available in about twenty percent of the new cars on the market in 2024, and would greatly improve both the performance and safety of vehicles.

Legal

The market for car suspensions is increasingly being shaped by legal requirements, particularly those concerning safety and the environment. In 2024, the National Highway Traffic Safety Administration (NHTSA) imposes new regulations on all manufacturers requiring them to test their suspensions under more demanding conditions. The deadline for compliance is December 2024. Fines of up to $1 million per infringement of the regulations are a serious deterrent, and compliance with the law is becoming the most important aspect of the production process.

Environmental

In the field of automobile suspensions, the consideration of the environment is becoming a prime factor as manufacturers strive to reduce their carbon footprint. The goal for 2024 is to reduce the average CO2 emissions of vehicles with advanced suspensions to less than 120 grams per kilometer traveled, a reduction from 130 grams in 2023. The efforts of the manufacturers are being pushed by the pressure of the environment and the consumers, as 55% of the buyers have stated that they would be more likely to buy a car based on its environmental performance.

Porter's Five Forces

Threat of New Entrants

The barriers to entry into the market for automobile suspensions are moderate, due to the need for significant capital investments in technology and manufacturing capacity. In addition, economies of scale and brand loyalty, which benefit the market leaders, may deter new entrants. However, the technological developments in the field of suspensions and the growing market for electric vehicles may create opportunities for new entrants with the necessary innovation.

Bargaining Power of Suppliers

Suppliers of the market for car suspensions have moderate bargaining power. The number of suppliers of the raw materials is not too great, but the specialization of some components gives the suppliers more power. However, the suppliers' power is also reduced by the fact that the car manufacturers often try to diversify their suppliers in order to diversify the risks.

Bargaining Power of Buyers

The buyers of automobile suspension systems, including the car manufacturers and the retailers of aftermarket parts, have great bargaining power. The existence of several suppliers and the availability of alternative products allow the buyers to negotiate favorable prices and terms. Moreover, the increasing demand for high-quality, technically advanced suspension systems gives the buyers additional bargaining power.

Threat of Substitutes

The threat of substitutes in the car-suspension-system market is moderate. In this market, while the well-established suspension systems are firmly established, newer developments such as air suspension and active suspension are providing alternatives. These substitutes’ performance and cost-effectiveness can vary, which affects the rate of their take-up.

Competitive Rivalry

Competition in the market for car suspensions is high, resulting from the presence of several major suppliers and the constant need for innovation. To gain a foothold in the market, companies are competing in the fields of marketing, product development, and price. The rapid evolution of automobile technology, in particular the shift to electric vehicles, is intensifying this competition.

SWOT Analysis

Strengths

• Technological advancements leading to improved performance and safety features.
• Growing demand for electric vehicles driving innovation in suspension systems.
• Established supply chains and strong relationships with automotive manufacturers.

Weaknesses

• High costs associated with research and development of advanced suspension technologies.
• Dependence on the automotive industry's overall health and production rates.
• Limited awareness among consumers regarding the importance of suspension systems.

Opportunities

• Expansion into emerging markets with increasing vehicle ownership.
• Integration of smart technologies and IoT in suspension systems for enhanced functionality.
• Potential for partnerships with electric vehicle manufacturers to develop specialized systems.

Threats

• Intense competition from alternative suspension technologies and materials.
• Economic fluctuations affecting consumer spending on vehicles.
• Regulatory changes and environmental standards impacting manufacturing processes.

Summary

The world market for automobile suspension systems in 2024 will be characterized by strong technological advancements and growing demand for electric vehicles. This is a major opportunity for market growth. However, high R&D costs and competition from alternative suspension systems will be major challenges for the market. In order to take advantage of the current market opportunities, companies need to take advantage of their existing supply chains and enter into new cooperation agreements.