Global automotive silicone market forecast at $3.1 billion by 2027

Dublin, Ireland – The global automotive silicone market size is projected to grow from USD 2.2 billion in 2022 to USD 3.1 billion by 2027, at a CAGR of 7.1% between 2022 and 2027. Increasing demand for automotive silicone from emerging markets and growth in transportation industry are driving the market according to Markets and Markets.

The WHO declared the outbreak of the novel coronavirus or COVID-19 as a pandemic. The outbreak of the virus wreaked havoc on the global economy. China was severely affected by COVID-19, and the government called the lockdown of 21 provinces. Wuhan and Hubei provinces are the leading manufacturing centers and trade hubs, which were under lockdown. This affected the supply chain of the silicone market. Later, the European and North American countries were affected by the pandemic. The global economy has recovered since 2021 and the trend is expected to continue in the upcoming years. However, the lockdowns and closure of international borders and the shutdown of economic activities across countries to prevent the spread of COVID-19 have impacted the automotive industry.

The automotive industry in Asia Pacific is growing rapidly due to the growth in population, increasing income level, improving standards of living, and increasing consumer preferences for high-performance vehicles. As Asia Pacific is a rapidly developing economy, many foreign investors, and automotive manufacturers are establishing their production plants in the region. This surge in the automotive production is boosting the demand for automotive components in which silicone is used. The automotive production volume is high in APAC, which makes it a prime automotive silicone market.

The automotive industry continues to grow in the Asia Pacific region owing to the significant demand for automotive silicone from developing countries, such as China, India, Japan, and South Korea, which will, in turn, boost the growth of the automotive silicone market.

The growing adoption of electric vehicles, especially in the developed economies of Europe and North America is restricting the growth of automotive silicone market. Major players are expanding the production of electric vehicles to meet their rising demand. The electric vehicle models are becoming more affordable, which, in turn, fuels the adoption of these vehicles. The infrastructural developments related to electric vehicle charging stations have also been increasing and are often supported by local governments. This shift to the use of electric vehicles significantly impacts the growth of automotive silicone as the demand for engine components and drive transmission parts is reduced. The automotive silicone manufactures are negatively impacted by the introduction of electric vehicles as the focus shifts from engine management, emission control, and fuel efficiency to battery-driven vehicles. Therefore, the increase in the adoption of electric vehicles is a major restraint in the growth of the automotive silicone market.

The automotive silicone market is expected to be driven by the rapidly expanding transportation industry. The product is being increasingly used in automobiles in gaskets, hoses, connector seals, fuel system valves, diaphragms, and others. The increasing automobile production, especially in developing economies such as China, India, and Thailand, is fueling the demand for silicone. The growing middle-class population, coupled with the rising disposable income, has increased the number of vehicle owners in developing countries. These factors are expected to boost the demand for silicone in the transportation industry during the forecast period.

he key challenge in the global automotive silicone market is the continuous fluctuation of raw material and energy prices. The sharp increase in prices of raw materials, such as methyl chloride and silicon metal, from 2016 to 2018 indirectly reduced the profit margins of silicone producers. This subsequently led to an increase in the price of the overall silicone products. The rising raw material costs are expected to have a negative impact on the global automotive silicone market. Owing to the increased raw material prices, the margin for automotive silicone producers has decreased, and the prices of automotive silicone and the subsequent end products have increased. Producers continue to cope with high and volatile feedstock costs and are expected to pass on the price rise to end users. For example, the major players in the silicone market, such as Wacker and Elkem, recently increased the prices of their silicone products to adjust for the high raw material and energy costs.

The interior & exterior material segment dominated the automotive silicone market, with a share of 34.8% in terms of value, of the overall market in 2021. The increase in the demand for automotive silicone in interior & exterior components, such as airbags, exhaust hangers, headlamps, hoses, and shock absorbers is projected to drive its use in these applications. The silicone anti-vibration rubber used in exhaust hangers act as a countermeasure to heat damage. Reinforcing agents like silica are also injected into rubber to increase the rubber’s anti-vibration affect

Based on application, the engines segment accounted for the second fastest growth at a CAGR of 7.2% during the forecast period. Automotive silicone is used in sealing, potting & bonding; filtration, gaskets, vibration dampening, and radiator seal in the engines application. The major automobile manufacturers are using RTV silicone rubber for bonding and sealing material as they exhibit superior high- and low-temperature resistance, good electrical properties and high adhesiveness. The automobiles of this generation contain more than 250 connection points between wire harnesses and E/E devices. For long-term functionality, silicone elastomers are used for sealing.

APAC is expected to be the fastest-growing market during the forecast period. Based on region, Asia Pacific is a key market for the production of automotive silicone and is projected to grow at a CAGR of 8.2% in terms of value during the forecasted period. The availability of low-cost raw materials and labor, coupled with increasing domestic demand for automobiles, makes the region an attractive investment destination for automotive silicone manufacturers.

Major players operating in the global automotive silicone market include The Dow Chemical Company (US), Wacker Chemie AG (Germany), Momentive (US), Shin-Etsu Chemical Co. Ltd. (Japan), Elkem ASA (Norway), Evonik Industries AG (Germany), Gelest Inc. (US), Henkel (Germany), Primasil Silicones (UK), and Siltech Corporation (Canada).