Buying Trends–Automotive LEDs

Aug. 22, 2016
Automotive pushes the LED lighting market ahead.

Boasting low energy draw, high lumen output, and instant on-off capabilities, light-emitting diodes (LEDs) have become extremely popular with automotive manufacturers over the last few years. In fact, the auto industry was the bright spot for LED makers in 2015 and remains a stalwart proponent of these electronic devices as we push into the third quarter of this year.

“LED manufacturers had an especially tough year in 2015. Despite rising LED lighting market demands, and large-scale replacements of traditional luminaires, the oversupply situation in the market caused average sales prices of LEDs to plunge 30 to 40%,” according to LEDinside’s Top 10 LED Market Trends in 2016. After incurring losses, several manufacturers exited the LED market completely. Even through this market turmoil and price decreases, LEDinside’s Roger Chu sees LEDs playing a part in the “automotive lighting revolution” that’s in full force.

The LED Advantage

LEDs are semiconductor diodes, or electronic devices that permit current to flow in only one direction. LED lights are up to 80% more efficient than traditional lighting such as fluorescent and incandescent lights, with 95% of the energy in LEDs converted into light and only 5% wasted as heat (versus fluorescent lights, which convert 95% of energy to heat and only 5% into light). LED lights also draw less power than traditional lighting; a typical 84-watt fluorescent can be replaced by a 36 watt LED to give the same level of light.  

These and other advantages have pushed automakers to incorporate more LEDs into their vehicles—starting with higher-end models and slowly moving into mid-priced cars. “LED automotive lighting developments have gradually shifted from high-class car models to mid- to high-class car models,” Chu points out, noting that laser lights are expected to fill the void left by LED lights in the high-class car model sectors, but since automotive laser supplies are only available in small volumes it{?} will be applied in specific car brands and car models. “It is hoped the proliferation of laser car lights will spread to more car models, following the entry of more suppliers in the market.”

Forward Motion

Despite the pricing challenges, some manufacturers are plowing ahead in the automotive LED market. In July, for example, Osram expanded its specialty lighting business by acquiring Novità Technologies, a U.S. manufacturer of automotive LED modules used in tail lights, fog lights, and daytime running lights.

Osram sees growing demand for complete systems and modules rather than for the pure light sources. For the Ford F-150, for example, the manufacturer has developed a complete LED-based front lighting system that comprises low and high beams, turn indicators, parking lights, and a control module. 

“The purchase of Novità Technologies is an outstanding addition to our project and system business,” said Hans-Joachim Schwabe, CEO of Osram's Specialty Lighting business unit, in a company press release, “and at the same time strengthens our position on the important U.S. market.”

More to Come

In Chain Lightning: Charting the Evolving Automotive LED Value Chain, research firm McKinsey says that of the total market for automotive lighting ($19 billion USD at the fixture level today), LED products already make up about $4 billion of the total. Furthermore, the automotive LED market continues to develop rapidly on a content-per-car basis despite the economic downturn, McKinsey reports, with vehicle interior applications leading the way.

For example, LEDs are already found in about 70% of interior indicator lights and 25 percent of instrument display backlights. Currently, the largest exterior applications are center high-mounted stop lamps (CHMSLs) at 20% penetration, and brake and taillights at about 10% each. “The automotive LED supplier landscape remains highly fragmented at the module level and dealing with modules will likely have significant impact on the value chain,” according to the report’s authors.

“LED market penetration will be uneven…with new applications (e.g., headlamps and daytime running lamps) growing rapidly from very small bases,” McKinsey reports, “while CHMSL and indicator light growth will slow as LEDs become the dominant solution in these applications.”

Going forward, Chu sees adaptive driving beam headlights incorporated in the LED headlight as a growing trend. These adaptive headlights allow a particular lighting beam area to be shut off and prevent the “glaring” issue from oncoming vehicles. “Adaptive driving beam headlights allow both high brightness and security at the same time,” Chu writes, “and has become one of the main highlighted developments for [LED] manufacturers.”

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