Global Exhaust System Market Outlook to 2030

Global Exhaust System Market Overview

• The global exhaust system market has reached USD 31.6 billion. The increasing production of automobiles, particularly in developing economies such as China and India, drives the growth of this market. The demand for emission control technologies is also on the rise due to stricter environmental regulations and government mandates aimed at reducing pollution levels. The adoption of advanced exhaust systems, such as selective catalytic reduction (SCR) and diesel particulate filters (DPF), plays a critical role in market expansion.
• The global exhaust system market is highly competitive, with major players such as Faurecia (France), Tenneco Inc. (USA), Eberspcher Group (Germany), Friedrich Boysen GmbH & Co. (Germany), and Benteler Automotive (Germany) leading the market. These companies are continually investing in R&D to develop innovative solutions that meet stringent emissions regulations. Their strong presence across key markets and collaborations with leading automakers gives them a competitive advantage.
• In 2023, Faurecia launched its latest exhaust system technology in collaboration with Hyundai Motor Group. This partnership resulted in the implementation of Faurecias new generation DPF, which significantly reduces nitrogen oxide emissions. This development aligns with the European Unions Euro 7 regulations, scheduled to take effect by 2025, further tightening emission standards for passenger vehicles and light commercial vehicles. This move highlights the industry's efforts to innovate in line with global environmental mandates.
• Cities like Shanghai and Detroit dominate the global exhaust system market. Shanghai, as one of the largest automobile manufacturing hubs in the world, benefits from the rapid growth of the automotive sector in China. Meanwhile, Detroit, home to the U.S. automotive industry, remains a leading center due to its strong R&D in emission control technologies. Both cities play a crucial role in the global supply chain of exhaust systems and contribute to the demand for advanced emission reduction technologies.

Global Exhaust System Market Segmentation

By Product Type: The global exhaust system market is segmented by product type into manifold systems, catalytic converters, and mufflers. In 2023, catalytic converters held the dominant market share due to increasing regulatory pressure to curb greenhouse gas emissions. The introduction of advanced catalytic converter technologies, such as three-way catalytic converters in developed regions like North America and Europe, has contributed to their dominance.

By Region: The global exhaust system market is segmented by region into North America, Europe, Asia-Pacific (APAC), the Middle East & Africa (MEA), and Latin America. In 2023, Asia-Pacific dominated the market, accounting for the largest share due to the rapid industrialization and increasing automotive production Government initiatives promoting eco-friendly vehicles further support this regional dominance.

By Vehicle Type: The market is also segmented by vehicle type into passenger cars, light commercial vehicles (LCVs), and heavy commercial vehicles (HCVs). In 2023, passenger cars held the largest share, driven by the growing consumer demand for vehicles and increased production in emerging markets such as India and China. Stringent emission standards for passenger vehicles, particularly in Europe and North America, have further fueled the demand for efficient exhaust systems in this segment. Automakers have been incorporating advanced exhaust technologies to comply with environmental regulations.

Global Exhaust System Market Competitive Landscape

• Faurecia: In April 2023, Faurecia expanded its production capabilities in India by establishing a new manufacturing facility in Pune. The plant specializes in producing advanced emission control technologies and has a projected annual output of 1 million units. This move comes in response to India's BS-VI norms, aiming to reduce emissions in the automotive sector, thus expanding Faurecias presence in the Asia-Pacific region.
• Tenneco: Tenneco, a leading player in the global exhaust system market, launched its latest SCR exhaust system in September 2023. This system was specifically designed for heavy commercial vehicles to meet Euro 7 emission standards. The new technology can reduce nitrogen oxide emissions by over 90%, positioning Tenneco as a leader in low-emission solutions for the commercial vehicle segment.

Global Exhaust System Market Analysis

Growth Drivers

• Stricter Emission Regulations Across Major Economies: Governments globally have tightened emission standards, driving the demand for advanced exhaust systems in automobiles. In 2023, the European Union implemented its stringent Euro 7 standards, reducing the allowable limits of nitrogen oxides and particulate matter in exhaust emissions. This regulatory push has driven automakers to invest in catalytic converters and selective catalytic reduction (SCR) technologies to comply with the standards. Similarly, India enforced BS-VI norms in 2023, targeting a 50% reduction in NOx emissions from diesel engines, prompting the need for sophisticated exhaust solutions.
• Rising Automotive Production in Emerging Markets: The growth of the automotive industry in emerging markets such as China, India, and Brazil continue to fuel the demand for exhaust systems. China alone produced over 26 million vehicles in 2023, making it the largest automotive producer worldwide. With governments in these regions pushing for cleaner air policies, automakers are increasingly integrating advanced exhaust technologies, such as diesel particulate filters (DPFs) and three-way catalytic converters, to meet both consumer demand and regulatory requirements.
• Growing Adoption of Hybrid Vehicles: Hybrid vehicles, combining internal combustion engines with electric powertrains, have experienced substantial market growth, driving demand for tailored exhaust solutions. In 2024, the global sales of hybrid vehicles surpassed 12 million units, particularly in regions like North America and Europe, where hybrid vehicle adoption rates have been highest. These vehicles still require advanced exhaust systems for their internal combustion engines, increasing demand for emission control technologies like SCR and low-emission catalytic converters.

Challenges

• High Development Costs of Advanced Exhaust Technologies: The development of advanced exhaust systems, such as SCR and DPF technologies, comes with significant costs. Manufacturers must invest heavily in research and development to meet stringent emissions standards like Euro 7 and BS-VI. This challenge is further exacerbated in regions with lower vehicle profit margins, such as Latin America.
• Fluctuating Raw Material Prices: The production of exhaust systems relies heavily on raw materials like steel and platinum, which are used in catalytic converters. Price fluctuations in these commodities create challenges for manufacturers by increasing production costs. This volatility makes it difficult for exhaust system manufacturers to maintain profitability while adhering to competitive pricing in global markets.

Government Initiatives

• Indias BS-VI Phase II Implementation: In 2023, India enforced BS-VI Phase II norms that mandate automakers to reduce tailpipe emissions for both commercial and passenger vehicles. These norms require vehicles to include advanced exhaust after-treatment systems like SCR and DPF, which help reduce particulate matter and nitrogen oxide emissions. This has resulted in increased demand for exhaust systems tailored for Indian climatic and road conditions, fueling market growth.
• Chinas Blue Sky Environmental Action Plan: In 2024, the Chinese government expanded its Blue Sky action plan, which includes strict vehicle emissions controls to curb air pollution in urban areas. As part of this initiative, China has implemented the China 6b emission standards, which require automakers to equip vehicles with state-of-the-art catalytic converters and DPF systems. The government is also offering subsidies for manufacturers that produce emission-compliant vehicles, further driving demand for advanced exhaust systems.

Global Exhaust System Market Future Outlook

The Global Exhaust System Market is projected to grow exponentially in future. This growth will be driven by stricter emission regulations across major economies, rising automotive production in emerging markets and growing adoption of hybrid vehicles.

Future Trends

• Increased Demand for Hybrid and Plug-in Hybrid Vehicle Exhaust Systems: Over the next five years, the market for exhaust systems specifically designed for hybrid and plug-in hybrid vehicles will grow significantly. As these vehicles continue to require exhaust systems for their internal combustion engines, the demand for low-emission exhaust technologies, such as selective catalytic reduction (SCR) systems, will rise substantially.
• Rise in Exhaust System Innovations for Commercial Vehicles: By 2028, the commercial vehicle segment will witness an influx of advanced exhaust systems that cater to stricter emission regulations. Heavy-duty vehicles will require more efficient and durable exhaust systems, particularly in regions like North America, where emissions standards are expected to tighten further. Manufacturers are likely to focus on developing lighter and more efficient exhaust systems that improve fuel economy while reducing emissions.