The automotive fuel tank market was valued at USD 25.08 billion in 2023 is projected to reach USD 38.04 billion by 2032, expanding at CAGR of 4.74% during the forecast period.
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The COVID-19 pandemic significantly impacted the global economy, with the automotive industry facing severe challenges due to lockdown measures and supply chain disruptions. Despite these setbacks, the market is anticipated to recover gradually in the forecast period.
The automotive fuel tank market is witnessing growth driven by the adoption of self-sealing fuel tanks, especially in aviation and increasingly in automobiles. Originating from World War II, this technology prevents leaks by using multiple layers of materials and rubber that expand upon contact with fuel, sealing punctures effectively. Major automakers are investing in this technology to enhance vehicle safety, anticipating rising consumer demand for safer fuel tanks in the future.
Efforts to reduce vehicle weight and emissions have led automotive OEMs to explore innovative materials, with plastic water tanks replacing traditional metal ones due to their advantages in weight reduction and customization. High-density polyethylene (HDPE) plastic fuel tanks offer flexibility and meet OEM specifications, making them increasingly preferred in passenger vehicles and light commercial vehicles.
The automotive fuel tank market is poised for growth due to factors like increased demand for fuel-efficient vehicles, urbanization, and expansion in the commercial vehicle sector driven by the printing, construction, and e-commerce industries. However, challenges such as the rising popularity of electric vehicles and fluctuating base metal prices, notably aluminum, may hinder market growth in the future.
Manufacturers worldwide are transitioning to plastic fuel tanks to enhance fuel efficiency and meet customer demands, particularly in heavy vehicles. Plastic fuel tanks offer superior benefits compared to other materials, making them the preferred choice in the automotive fuel tank industry.
This growth is attributed to car manufacturers' introduction of new models with larger fuel tank capacities, catering to the rising demand for vehicles suitable for long-distance travel. Additionally, the placement of large fuel tanks in previously unused space on vehicle chassis enhances stability and power distribution, particularly as vehicle weight increases. Compact cars typically feature 45-liter fuel tanks, while sedans commonly have capacities ranging from 45 to 70 liters. SUVs, on the other hand, require tanks exceeding 70 liters. The segment with capacities between 45 and 70 liters is expected to dominate the market due to increased demand for sedans in countries such as Japan, China, India, Germany, France, and Spain. Meanwhile, the demand for SUVs and other commercial vehicles is prominent in the US, China, and Germany, driving growth in the 70+ liter segment.
In terms of materials, the automotive fuel tank market is segmented into plastic, metal, and aluminum. Plastic holds the largest market share, accounting for 45% of total revenue. To meet evolving customer demands and increasing market requirements, numerous organizations worldwide have transitioned from metal to plastic fuel tanks. High-density polyethylene (HDPE) is the primary material used in manufacturing plastic fuel tanks. These tanks offer advantages such as reduced weight and enhanced moldability, allowing for the production of customized tanks tailored to meet OEM specifications.
During the forecast period, Asia Pacific is anticipated to achieve the fastest Compound Annual Growth Rate (CAGR) of 4.74%. This growth is primarily attributed to the expanding automobile market across both developed and developing countries within the region, driven by increasing demand for passenger cars. China and India notably contribute significantly to automotive sales in the Asia-Pacific region.
In 2020, China emerged as the dominant force in the regional market, commanding a market share of 64.12%, followed by Japan and India. China stands out as one of the largest automotive markets globally, and the surge in automobile sales within the country is poised to stimulate the fuel tank industry. Despite the adverse effects of the pandemic, China's auto sales reached 25.31 million units in 2020, experiencing only a marginal decline of 1.9% year-on-year.
India is expected to play a substantial role in the overall market, driven by the increasing sales of small and medium-sized vehicles. In 2020, India's automobile sales were estimated at 2.77 million units. Meanwhile, Japan has witnessed a steady increase in domestic automotive production over the past decade, attributed to factors such as the depreciation of the yen and the robust global automotive industry. The total number of cars sold in Japan in 2020 surged to 4,598,615 units.
The automobile fuel tank industry is characterized by a handful of dominant players, collectively holding over 70% of the market share, owing to their product offerings and extensive production networks.
Manufacturers in this industry have made substantial investments in Research and Development (R&D) to enhance their product offerings, thereby fostering the growth of the automobile fuel tank market. Significant business strategies encompass new product development, contractual agreements, acquisitions, mergers, increased investments, and collaborations with other organizations.
To thrive in an increasingly competitive market, companies in the automotive fuel tank industry must focus on developing lucrative products. Adopting a strategy of local manufacturing to reduce operational costs has emerged as an effective business approach, aiding both customers and businesses in expanding their operations.
Recent developments in the automotive fuel tank industry have yielded noteworthy outcomes. Major players such as TI Fluid Systems and Plastic Omnium are actively responding to market demands by intensifying their R&D efforts.
TI Fluid Systems, for instance, plays a pivotal role in guiding automakers as they navigate the development of innovative fluid storage, transportation, and technology solutions. With a workforce of 25,600 employees across 98 manufacturing facilities in 28 countries, TI Fluid Systems excels in innovation, surpassing fuel economy and emissions regulations. In collaboration with global partners, TI Fluid Systems is poised to introduce next-generation fuel tanks capable of meeting the stringent requirements of hybrid electric vehicles (HEVs). These plastic fuel tanks, initially deployed in Volkswagen China's Passat and Magotan plug-in hybrid vehicles (PHEVs), are anticipated to be adopted across various global platforms.
Similarly, smaller players like Martinrea are also leveraging innovations in data and design to drive business growth, catering to the needs of both large-scale manufacturers and small businesses alike.
Automotive Fuel Tank Market Leaders
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By Material Type
By Geography
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