Automotive TIC Market Dynamics - Analysis of Supply and Demand through 2025


Posted July 22, 2021 by ctom7000

US is major market for periodical technical inspection services in North America

 
The global automotive TIC market is expected to grow from USD 16.5 billion in 2020 to USD 20.4 billion by 2025; it is expected to grow at a CAGR of 4.3%.

COVID-19 Impact on Automotive TIC Market

Due to the spread of the Coronavirus, manufacturing units around the world have been shut down, footfall in showrooms has fallen sharply, and vehicle sales have taken a huge hit. Major automotive players such as Fiat Chrysler Automobiles, Ford, PSA Group, Volkswagen, Ducati, Tesla, BMW, Rolls-Royce, and General Motors are among the global automotive manufacturers who have suspended their production due to the COVID-19 pandemic. With economic and industrial activity largely put on hold, it is expected that there will be a severe demand-side impact leading to a sharp decline in vehicle sales volumes. The scenario is expected to affect the market, as the growth of this is directly related to the production of vehicles. However, COVID-19 is accelerating the trend of digitalization in the automotive TIC market. Automotive TIC companies are now relying on software solutions to conduct audits, damage assessments, and certifications. For instance, Bureau VERITAS has launched specialized digital tools for a variety of sectors to support remote operations.

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Automotive TIC Market Dynamics
Drivers: Rising focus of governments to impose strict regulatory standards on the automotive industry

The global automotive industry is subject to various government regulations pertaining to passenger safety, as well as environmental concerns (emission levels, fuel economy, noise, and pollution). These regulations/standards directly impact and influence vehicle component designs. Strict government laws compel automakers to add safety features, such as seatbelts, airbags, and crumple zones, in an automobile. Major regulatory bodies impose tariffs and other trade barriers to penalize and discourage manufacturers from flouting emission and safety norms, for example, continued use of defective equipment. This forces automobile manufacturers to develop fuel-efficient vehicles with much lower emissions and also add safety features such as anti-skid braking systems (ABS); electronic brake-force distribution (EBD); airbags; and emission control systems, such as catalytic converters using turbochargers; and exhaust gas recirculation (EGR) systems.

Restraints: Varying regulations/standards across regions

With globalization in trades and businesses, distinct local regulations and standards are likely to create barriers for the acceptance of products internationally. This creates conflicts between the local and international standards, thereby hindering the market growth. Variations in regulatory standards across different regions lead to discrepancies in tax rates, thereby incurring additional costs from companies (hiring local staff to handle tax-related issues, etc.). TIC companies are subject to local laws and have to abide by the regulations and norms of countries in which they operate; this may hamper their efficiency

Opportunity: Mandate of periodic technical inspection (PTI) of vehicles by governments in countries such as the US and Germany

Periodical technical inspection (PTI) is a regulation mandated by respective governments in many countries to ensure vehicles on the road are in good technical condition and conform to safety- and emission-related regulation. To help increase roadway safety, the transportation department of any country inspects passenger and commercial motor vehicles and ensures all parts and components are in good working condition.

Challenge: Declining global vehicle sales

The COVID-19 had a severe impact on the global automotive sector. With production stoppages and lockdowns, both supply and demand for OEMs and auto part suppliers have been heavily disrupted. The lockdown in several countries that has restricted and impacted the production and sales of vehicles. The operations of some crucial companies have also been affected by COVID-19 epidemics. Most of the companies have shut down their vehicle production facilities and shifted their focus towards the manufacturing of personal protective equipment. Thus retail sales of vehicles declined drastically due to the COVID-19 pandemic and subsequent lockdown measures imposed by the different countries to contain the spread of the virus.
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Issued By Tom
Country United Kingdom
Categories Automotive
Tags Automotive TIC Market
Last Updated July 22, 2021