Aluminum Alloy Wheels Market Size, Share & COVID-19 Impact Analysis, By Finishing Type (Polished Alloy Wheel, Two-Toned Alloy Wheel), By Vehicle Type (Passenger Cars, Commercial Vehicles), and Regional Forecast, 2021-2028

The global Aluminum Alloy Wheels Market size was USD 14.23 billion in 2020. The market is projected to grow from USD 16.43 billion in 2021 to USD 30.98 billion in 2028 at a CAGR of 9.5% during the 2021-2028 period. The global COVID-19 impact has been unprecedented and staggering, with the witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a growth of 15.5% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Alloy wheels have a widespread application due to their high resilience and lightweight. Furthermore, aluminum alloy wheels amplify the aesthetic appearance of the vehicle. Automakers are being forced to manufacture lighter, environment-friendly, and safer cars as the amount of carbon dioxide emitted is proportional to the amount of fuel consumption and the size of the vehicle; hence, reducing weight becomes a critical necessity.

Changing consumer lifestyles and shifting inclination toward using light vehicles are expected to provide new opportunities for the market growth. The rapid urbanization, increase in vehicle demand and production, and regulations related to fuel efficiency are expected to further propel the Aluminum Alloy Wheels Market growth during the forecast period.

Lockdowns and Restrictions Due to COVID-19 Might Hamper the Market Growth

Lockdown and economic crisis induced due to the COVID-19 pandemic severely impacted the financials of manufacturers in 2020. The COVID-19 situation created uncertainty in the market, disruptions of the supply chain, decline in businesses, and panic among end-users. However, the market rebounded after the lockdown was released in most countries, and the government affairs returned to normal. Since this industry is dependent on cars, the disruptions caused in the car industry have directly affected the industry. According to the Society of Indian Automobile Manufacturers, the sales of passenger vehicles experienced a decline of 2.24% from April to March 2021. Also, China, one of the major suppliers, faced the heat of COVID-19. In China, during the first six months of 2020, an average of 1.3 million new passenger cars were sold every month, about 23% lower than in the first half of 2019. These trends affected the regional business outlook as it is directly dependent on the car sales in the region.

The outbreak of the COVID-19 pandemic in several countries has led to a global economic slowdown. Strict measures implemented for the containment of coronavirus impacted the market scenario on a large scale. Several factors, including shortage of labor and raw materials led to numerous difficulties in developing and designing new devices, creating a wide gap in supply and demand. Market leaders are focused on catering to the order backlog to sustain a consistent stream of revenues.

LATEST TRENDS

High Demand for Lightweight Vehicles to Set a Positive Trend for Market Growth

Owing to consumer demand, vehicle manufacturers have turned their attention to safe, luxurious, and lightweight options. Lightweight materials and premium interiors are essential factors to provide some of the biggest opportunities in the automotive industry. This means that suppliers will have to develop solutions that help OEMs meet continually tightening regulations and satisfy the widening range of consumers’ tastes.

According to the U.S. Department of Energy, a 10% reduction in vehicle weight can lead to a 6%-8% fuel economy improvement. The weight of a vehicle's body can be brought down to 50% by replacing cast iron and steel components with lightweight alloys such as magnesium alloys, aluminum alloys, high-strength steel, and carbon fiber. This directly reduces the vehicle's fuel consumption. For instance, according to the U.S. Department of Energy, using lightweight components and high-efficiency engines in one-quarter of the U.S. fleet could save more than 5 billion gallons of fuel annually by 2030. Hence, high demand for lightweight vehicles and an increase in the pace of vehicle production are expected to set a positive trend for this market during the forecast period.

DRIVING FACTORS

Increasing Demand for Tough, Appealing, and Monetarily Feasible Wheels for Vehicles Will Drive Market Growth

Increasing demand for lightweight materials from the automotive industry and rising focus on fuel efficiency have tremendously increased the demand for efficient vehicles across the globe. Aluminum alloys are distinguished for their ability to withstand corrosion and rust compared to their steel counterparts. Hence, apart from being lightweight, it also provides longer life, benefiting the customers monetarily. Also, customers' approach while buying cars is shifting toward luxury due to the increase in their buying power and urbanization. This is expected to propel the growth of this market during the forecast period.

Increase in Pace of Vehicle Production Will Fuel Market Growth

The competition in the manufacturing sector has increased rapidly in the past decade, which has forced automakers to adopt new technologies. As of 2017, alloy wheel sales for trucks were up at least 30%. Hence, as with the increasing sales of vehicles, the sale of these type of wheels also increased subsequently. An increase in the sales and production of all types of vehicles in developing and developed countries due to the growing mobility and investment in the transportation sector is expected to augment the revenue growth of the global market.

RESTRAINING FACTORS

High Cost of Aluminum Alloy Wheels to Restrain Market Growth

The price of steel and aluminum varies based on global supply and demand, the availability of iron and bauxite ore, and fuel costs; however, steel is generally cheaper than aluminum. Aluminum is the most abundant metal in the Earth's crust. It is expensive predominantly due to the amount of electricity required in the extraction process. Also, comparing the manufacturing processes, these wheels are more complex than traditional steel wheels. Thus, alloy wheels tend to cost more than their steel counterparts. Moreover, repairing steel wheels could cost way less than alloy wheels. Accordingly, the cost factor may restrain the market growth.

MARKET SEGMENTATION 

By Finishing Type Analysis

The Polished Alloy Wheel Segment Dominates the Market Due to its Low Cost

The polished alloy wheel segment accounts for a major share in the global market. Polished aluminum wheels are polished and not plated. The polishing process involves sanding the wheels' finish so that the alloy wheel surface is completely smooth. After that, the surface is polished with a polishing compound to bring out a brilliant shine. Polishing does not add weight to the wheel, so polished lightweight racing wheels are more common than chromed/toned lightweight wheels. Another benefit of polished wheels is that they can be repolished when the finish becomes dulled and tarnished. The automotive and truck industry has created a growing demand for polished wheels as they are affordable, automatically polished, and buffed to a uniform mirror finish. For instance, in March 2021, Dymag, the pioneer of alloy wheel manufacturing, supplied the SSC Tuatara with its polished ‘20 in wheels’. Dymag’s hybrid of aluminum alloy and carbonfiber weigh 40% less than a manufacturer’s conventional alloys.

The two-tone alloy wheel segment is anticipated to exhibit a higher CAGR during the forecast period. There are two methods by which two-toned alloy wheels are manufactured. A machine process does the first method for painting alloy wheels where the rims get a two-tone surface protected by a clear coat layer. The second method is a diamond cut alloy wheel having a machine turned face over a painted background. This process gives the rims one exact color transition without laboriously masking off or painting. In addition, it also makes the rim extremely resistant and robust. The painting facilitates the user with easier cleaning of the rims. Soil or dust of any kind does not sit so firmly on the surface and can be more easily removed. Two-toned alloy wheels offer drive-by appeal to the vehicle. Subsequently, sales of upscale car brands were appreciated and when this happened with upscale cars, all the auto manufacturers noticed. Thus, this results in the growth of the two-tone alloy wheel segment.

By Vehicle Type

Passenger Cars Segment Will Hold the Largest Market Share

Based on vehicle type, the market is segmented into passenger cars and commercial vehicles.

The passenger car segment holds the largest aluminum alloy wheels market share and is expected to continue during the forecast period. Passenger cars include vehicles such as sports utility vehicles (SUV), hatchbacks, sedans, electric cars (battery electric vehicle (BEV), multi-utility vehicles (MUV), and hybrid electric vehicles (HEV)). The passenger car segment holds a significant share and would continue to lead during the forecast period.

The commercial vehicle segment is expected to project the highest CAGR during the forecast period. Currently, one of the disadvantages of alloy wheels is their durability. These wheels tend to bend and even crack more easily than tougher steel wheels when impacted by the road. As commercial vehicles are exposed to more such loads, steel wheels are preferred over alloy wheels. However, with technological advancements in the manufacturing of alloy wheels and a combination of other materials to make the alloy wheels more tough and durable, it is anticipated to drive the market growth. 

REGIONAL INSIGHTS

The Asia Pacific Market accounted for USD 6.34 billion in 2020. It currently holds the largest market share in the market. A significant factor propelling the growth of this region is the high population in countries, such as China and India, accounting for more than 38% of the global population. This growth is attributed to the increase in urbanization and rising disposable income leading to evolving preferences of the individuals. The automotive industry in South Korea, India, and China is growing mainly due to increasing manufacturing of vehicles. According to the OICA, India produced 4.51 million automobiles, of which 3.62 million were cars in 2019. Also, the International Organization of Motor Vehicle Manufacturers claimed that China was the largest vehicle-producing country; it produced 25.72 million vehicles in 2019, of which 21.36 million were cars. The presence of a robust automotive sector and the increasing number of passenger car manufacturers are the major factors driving the market growth.

Europe is expected to be the second-largest shareholder and could exhibit the highest CAGR in the global market during the forecast period. It can be attributed to the consumers choosing upgraded aluminum alloy wheels over normal steel wheels. According to the market research study published by BVRLA, the size of the car fleet in the U.K. in the first quarter of 2021 grew by 1.5%, following consecutive quarters of decline. In Q1-2021, the car fleet grew by 0.4% to 1.37 million, with growth in the consumers partially declining in the business fleet. In contrast, the van fleet accounted for a 5% increase in the previous quarter, reaching record levels in Q1, with 440,502 LCVs. Also, Germany has 40 alloy wheel manufacturing companies, accounting for a significant number of companies in the European market.

North America holds the third-largest position in the market. The U.S. ranks first in the region as major manufacturers are located there. At present, the U.S. fleet market operates in a low-inflation and low-interest environment and meets the country's economy standards, requiring substantial OEMs investment. Normal steel wheels are more commonly used in the country. Although it costs less, it is on the verge of getting replaced by aluminum alloy wheels. Increasing globalization further propels the market growth in the region.

The rest of the world consists of Latin America, the Middle East, and the Africa. The Middle East is anticipated to contribute significantly to the growth of the global Market. This can be attributed to the socio-economic prosperity of the area. These systems are anticipated to expect high demand in this region.

KEY INDUSTRY PLAYERS

Wheel Pros LLC Focuses on Acquisitions and Mergers to Enhance the Market Share

Randy White and Jody Groce founded Wheelpros in 1994 to distribute aftermarket wheels. Subsequently, the company grew to open its first two distribution centers in Denver and Dallas. In 2019, Wheel Pros acquired its biggest competitor MHT Alloys, and its subsidiaries Fuel Off-Road, Rotiform, Niche Road Wheels, DUB, US Mags, and Foose.

In November 2020, Wheel Pros announced that it had acquired the assets of Performance Replicas, Inc., a leading distributor of replica wheels. Performance Replicas is a known name in the factory reproduction wheel business with long-standing relationships across established national and internet retailers. In December 2020, Wheel Pros announced the acquisition of Just Wheels & Tires Co., TSW, a leading designer and distributor of proprietary aftermarket custom wheels focused on the luxury and offroad markets. Through its acquisitions and mergers, Wheel Pros LLC aims to fuel its market share in the global landscape.

LIST OF KEY COMPANIES PROFILED:

• Status Wheels Inc. (Florida, U.S.)


• Wheel Pros LLC. (Colorado, U.S.)


• Fuel Off-Road Wheels (California, U.S.)


• Citic Dicastal Co Ltd. (Hebei, China)


• Enkei Wheels India Ltd (Pune, India)


• Ronal AG (Härkingen, Switzerland)


• BBS Kraftfahrzeugtechnik AG (Schiltach, Germany)


• Alcoa wheels (Pennsylvania, U.S.)


• MHT Luxury Wheels (California, U.S.)


• Superior Industries (Minnesota, U.S.)

KEY INDUSTRY DEVELOPMENTS:

• March 2021 – Ronal group launched new application wheel Ronal R67. The new wheel design features five narrow spokes and five distinctive double spokes bonded with colorful design elements. The aero-style applications in red (Tornado Red) or anthracite (Track Grey) allow perfect air inlet, offering that extra sporty touch.


• December 2020 – Ronal group presented the world’s first carbon-neutral recycled wheel, the new Ronal R70-blue. The wheel is mainly made of pre and post-consumer material as well as primary aluminum, 100% recyclable, produced from renewable energy sources.

REPORT COVERAGE

The market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, types, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth over recent years.

Report Scope & Segmentation