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Aramid Fiber Market - Growth, Trends, and Forecast (2020 - 2025)

·7-min read

The market for aramid fiber is expected to witness a CAGR of around 4% during the forecast period. The major factor driving the growth of the market studied is the increasing defense spending across various countries.

New York, Sept. 23, 2020 (GLOBE NEWSWIRE) -- announces the release of the report "Aramid Fiber Market - Growth, Trends, and Forecast (2020 - 2025)" -

- On the flipside, the availability of alternatives with better properties and the negative economic impacts of COVID-19 is expected to hinder the growth of the market studied.
- Emerging applications in the optical fiber industry are likely to act as an opportunity in the future.
- Europe dominated the global aramid fiber market followed by North America and Asia-Pacific worldwide, with the largest consumption coming from countries, such as United States, Germany, and the United Kingdom, among others.

Key Market Trends
Automotive Segment Dominated the Market

- In the automotive industry, aramid fibers are used in the manufacturing of reinforcement materials for tires, turbocharger hoses, powertrain components, belts, brake pads, gaskets, clutches, seat fabrics, electronics, seat sensors, and hybrid motor materials.
- Additionally, the high thermal resistance of aramid fibers makes them ideal for the manufacturing of heat shields and under the bonnet applications.
- In recent years, there has been a shift toward lightweight automobiles. Owing to this, car manufacturers are designing lighter vehicles by replacing metal with composites, to make them light, tough, and recyclable. The growing demand for lightweight vehicles is favoring the aramid fiber market.
- Aramid fibers find major applications in the automobile racing events. They are becoming a major alternative for fiberglass-reinforced plastic in racing automobiles, as they do not shatter and leave debris in case of a crash.
- However, the global automotive industry has witnessed a downfall in the recent times. According to the International Organization of Motor Vehicle Manufacturers (OICA), the automotive production witnessed a 5.2% decline from 96,869,020 unit in 2018 to 91,786,861 units in 2019. Also, the sales of the automobiles has declined in 2019 by around from 95.06 million units in 2018 to 91.29 million units in 2019.
- Even before the outbreak of COVID-19, major manufacturers such as General Motors, Ford, and Honda cut back production owing to continuous declining sales rate in the United States market.
- Various developed and developing countries across the world experienced a decline in automotive production, in 2019; the countries include Sweden, Switzerland, the United Kingdom, the Czech Republic, Russia, the United States, India and China, among others.
- China the largest automotive producer in the world experienced a decline of -7.5% in its automotive production in 2019. Sales were already expected to drop 2% in the country in 2020, even before the outbreak began. The coronavirus pandemic prompted a 42.4% year-over-year sales slump from January through March as dealerships were shuttered and citizens remained under lockdown. Demand however revived with sales rising 4.4% year over year in April and 14.5% in May, according to China Association of Automobile Manufacturers.
- Even In countries such as India, which has experienced automotive production rise through the years (with the exception of 2019) , registered zero domestic sales in April 2020 due to stringent nationwide lockdown restrictions in India. In May 2020, almost all manufacturers reported a year-on-year slump of 80 to 90% in sales. In June, market leader Maruti Suzuki announced a nearly 54% decline in sales over June 2019 to 57,428 units, while in May, sales stood at 13,539 units.
- With automotive production slowing down and the COVID-19 pandemic further worsening the situation for the industry, the market for aramid fiber is expected to be affected, at least for a short- to medium-term period.

Germany to Dominate the European Market

- The German economy is the largest in Europe and the fifth-largest in the world. In 2019, the German economy grew by about 0.5%, which was its weakest growth rate in the last six years. Stronger private consumption, higher state spending, and booming construction have helped support growth in 2019, as struggling manufacturers dragged on activity. The country is in plans to stop the further downfall of the economy due to the COVID-19 impact by announcing the availability funds (of over USD 600 billion) to ensure growth and smooth functioning in various public sectors in near future.
- According to the recent IMF forecasts, due to the outbreak of the COVID-19, the GDP growth of the country is expected to fall by 7% in 2020 and pick up by 5.2% in 2021, subject to the post-pandemic global economic recovery. The country has been planning to recover the economy from the virus-hit by investing USD 146 billion into stimulus packages.
- Germany leads the European automotive market, with 41 assembly and engine production plants that contribute to one-third of the total automobile production in Europe. Germany, which is one of the leading manufacturing bases of the automotive industry, is home to manufacturers from different segments, such as equipment manufacturers, material and component suppliers, engine producers, and whole system integrators.
- In 2019, the German automotive production recorded a decline of approximately 9%. However, the country accounts for approximately 30% of the total passenger cars manufactured in Europe. Out of the world’s top-100 automotive suppliers, 21 are German companies. The country has been witnessing a decline in automotive production over the past few years. This is mainly due to high costs, shifting of the production base to other countries (like China), and introduction of new WLTP emission control regulations (as numerous manufacturers were unable to register their new products). The decline in automotive production is one of the major factors restraining the growth of market studied in the country.
- Additionally, the impact of COVID-19 is also hampering the growth of the auto market in the country. According to the European Automobile Manufacturers’ Association (ACEA) forecast, the automotive industry of the country is expected to decline from 12.8 million in 2019 to just 9.6 million units in 2020. Additionally, the sales of new cars and SUVs in the EU fell 22.3% in June to 950,000 compared with the same period of 2019, and compared with a drop of 52.5% the previous month. Therefore, this is expected to hamper the growth of the market studied in coming years.
- Germany, being one of the leading manufacturing bases for the aircraft industry, is home to manufacturers from different segments, such as equipment manufacturers, material and component suppliers, engine producers, and whole system integrators. The Federal Ministry of Economic Affairs and Energy lists aerospace as a key industry in Germany, with a strong industrial core and high growth rates expected to be witnessed in the years to come.
- The German aerospace industry includes more than 2,300 firms, which are located across the country, with northern Germany recording the highest concentration of firms. The country hosts many production bases for aircraft interior components, and materials, largely in Bavaria, Bremen, Baden-Württemberg, and Mecklenburg-Vorpommern.
- In Hamburg, Germany, Airbus inaugurated an automated fuselage-structure assembly line for narrow-body aircraft of the A320 family with a new concept for the industrial production network of Airbus in October 2019. This new line is designed to assemble the longer parts for the A321LR and includes 20 robots with a new logistics model, laser-assisted automatic positioning and digital data.
- Additionally, the demand for protective wear and equipment for industrial workers, firefighters and defense personnel is also driving the usage of aramid fibers from this sector in coming years.
- The German economy is estimated to take a major hit due to the ongoing COVID-19 impact, due to expected production halts and decreasing investments due to the ongoing lockdown situation in the country. The aramid fiber market in the country is expected to recovery only after the country shows positive economic growth post 2020.

Competitive Landscape
The global aramid fiber market is highly consolidated, with the top two players. Key companies in the market include DuPont, TEIJIN LIMITED, Yantai Tayho Advanced Materials Co.,Ltd., HYOSUNG, and Kolon Industries, Inc., among others.

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