Aluminum Alloy Wheels Market Overview Analysis By Fortune Business Insights Analysis

Market Size & Growth Outlook

According to Fortune Business Insights: The global aluminum alloy wheels market was valued at USD 14.23 billion in 2020 and is projected to grow from USD 16.43 billion in 2021 to USD 30.98 billion in 2028, exhibiting a CAGR of 9.5% during the 2021–2028 forecast period. Asia Pacific dominated the market with a 44.55% share in 2020. The U.S. market is projected to grow significantly, reaching an estimated USD 4,311.2 million by 2028, driven by OEM investments and lightweight wheel adoption.

Alloy wheels have widespread application due to their high resilience and lightweight properties, with aluminum alloy wheels also amplifying vehicle aesthetic appearance. As carbon dioxide emissions remain proportional to fuel consumption and vehicle size, automakers are forced to manufacture lighter, environment-friendly, and safer cars — making weight reduction a critical necessity. Changing consumer lifestyles and shifting inclination toward lighter vehicles, alongside rapid urbanization, increasing vehicle demand and production, and fuel efficiency regulations, are expected to further propel market growth during the forecast period.

The COVID-19 pandemic caused an unprecedented negative demand shock across all regions, though the global market exhibited 15.5% growth in 2020 compared to average 2017-2019 year-on-year growth, with demand and growth expected to return to pre-pandemic levels post-pandemic. Lockdowns severely impacted manufacturer financials in 2020, creating market uncertainty, supply chain disruption, business decline, and end-user panic. Since the industry depends on car sales, disruptions in the automotive sector directly affected the alloy wheel industry — per the Society of Indian Automobile Manufacturers, passenger vehicle sales declined 2.24% from April 2020 to March 2021, while China saw an average of 1.3 million new passenger cars sold monthly during the first half of 2020, about 23% lower than the first half of 2019.

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Latest Trends

High Demand for Lightweight Vehicles: Vehicle manufacturers have turned attention to safe, luxurious, and lightweight options given consumer demand, with lightweight materials and premium interiors representing essential factors for major automotive industry opportunities. Per the U.S. Department of Energy, a 10% vehicle weight reduction can lead to 6%-8% fuel economy improvement, with vehicle body weight reducible by up to 50% through replacing cast iron and steel components with lightweight alloys including magnesium alloys, aluminum alloys, high-strength steel, and carbon fiber. 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 per DOE estimates, positioning high lightweight vehicle demand and increasing vehicle production pace as positive market trends during the forecast period.

Driving Factors

Increasing Demand for Tough, Appealing, and Cost-Feasible Wheels: Rising automotive industry lightweight material demand and fuel efficiency focus have tremendously increased efficient vehicle demand globally. Aluminum alloys are distinguished for corrosion and rust resistance compared to steel counterparts, providing longer product life alongside being lightweight — benefiting customers monetarily. Customers' car-buying approach is simultaneously shifting toward luxury due to increasing buying power and urbanization, propelling market growth during the forecast period.

Increase in Pace of Vehicle Production: Rapidly increased manufacturing sector competition over the past decade has forced automakers to adopt new technologies. As of 2017, truck alloy wheel sales were up at least 30%, with wheel sales increasing subsequently alongside rising vehicle sales. Increasing vehicle sales and production across developing and developed countries, driven by growing mobility and transportation sector investment, is expected to augment global market revenue growth.

Restraining Factors

High Cost of Aluminum Alloy Wheels: Steel and aluminum prices vary based on global supply and demand, iron and bauxite ore availability, and fuel costs — though steel is generally cheaper than aluminum. Despite being the Earth's crust's most abundant metal, aluminum remains expensive predominantly due to the electricity required for extraction, with manufacturing processes also more complex than traditional steel wheels. Alloy wheels consequently tend to cost more than steel counterparts, with repairing steel wheels costing considerably less than alloy wheels — this cost factor may restrain market growth.

Segmentation Analysis

By Finishing Type: Polished alloy wheel accounts for a major global market share, given polished (not plated) aluminum wheels undergo a sanding process creating completely smooth alloy wheel surfaces, subsequently polished with compound to achieve brilliant shine. Since polishing doesn't add wheel weight, polished lightweight racing wheels are more common than chromed/toned lightweight wheels, with the additional benefit of repolishing capability when finishes dull or tarnish. The automotive and truck industry has created growing polished wheel demand given their affordability and uniform mirror finish. In March 2021, Dymag supplied the SSC Tuatara with polished 20-inch wheels — Dymag's hybrid aluminum alloy and carbon fiber wheels weigh 40% less than conventional manufacturer alloys.

Two-tone alloy wheel is anticipated to exhibit higher CAGR during the forecast period, manufactured through either a machine painting process creating two-tone surfaces protected by clear coat layers, or diamond cut alloy wheel processes featuring machine-turned faces over painted backgrounds — creating exact color transitions without laborious masking while making rims extremely resistant and robust. The painting process facilitates easier rim cleaning, as soil and dust don't sit firmly on the surface. Two-toned alloy wheels offer enhanced drive-by vehicle appeal, with upscale car brand sales appreciation driving broader auto manufacturer adoption and segment growth.

By Vehicle Type: Passenger cars hold the largest market share and are expected to continue leading during the forecast period, encompassing sports utility vehicles (SUV), hatchbacks, sedans, electric cars (BEV), multi-utility vehicles (MUV), and hybrid electric vehicles (HEV). Commercial vehicles are expected to project the highest CAGR during the forecast period — while alloy wheels currently face durability disadvantages, tending to bend and crack more easily than tougher steel wheels under road impact (making steel wheels preferred for load-exposed commercial vehicles), technological advancements combining alloy wheels with other materials to increase toughness and durability are anticipated to drive segment growth.

Regional Insights

Asia Pacific accounted for USD 6.34 billion in 2020, currently holding the largest market share. A significant growth factor is high population in China and India, accounting for more than 38% of global population, attributed to increasing urbanization and rising disposable income evolving individual preferences. The automotive industry in South Korea, India, and China is growing mainly due to increasing vehicle manufacturing — per OICA, India produced 4.51 million automobiles in 2019 (3.62 million cars), while the International Organization of Motor Vehicle Manufacturers confirmed China as the largest vehicle-producing country, producing 25.72 million vehicles in 2019 (21.36 million cars). The presence of a robust automotive sector and increasing passenger car manufacturer numbers are major growth-driving factors.

Europe is expected to be the second-largest shareholder and could exhibit the highest CAGR during the forecast period, attributed to consumers choosing upgraded aluminum alloy wheels over normal steel wheels. Per BVRLA market research, the U.K. car fleet grew 1.5% in Q1 2021 following consecutive decline quarters, growing 0.4% to 1.37 million with partial business fleet decline, while the van fleet increased 5% to reach record Q1 levels of 440,502 LCVs. Germany hosts 40 alloy wheel manufacturing companies, representing a significant European market company concentration.

North America holds the third-largest market position, with the U.S. ranking first regionally given major manufacturer presence. The U.S. fleet market currently operates in a low-inflation, low-interest environment meeting national economic standards requiring substantial OEM investment. While normal steel wheels remain more commonly used in the country despite costing less, they are on the verge of replacement by aluminum alloy wheels, with increasing globalization further propelling regional market growth.

Rest of the World — comprising Latin America, the Middle East, and Africa — with the Middle East anticipated to contribute significantly to global market growth given the region's socio-economic prosperity, expected to generate high product demand.

Key Industry Players

Wheel Pros LLC focuses on acquisitions and mergers to enhance market share. Founded in 1994 by Randy White and Jody Groce to distribute aftermarket wheels, the company subsequently grew to open its first two distribution centers in Denver and Dallas. In 2019, Wheel Pros acquired its biggest competitor MHT Alloys and subsidiaries including Fuel Off-Road, Rotiform, Niche Road Wheels, DUB, US Mags, and Foose. In November 2020, Wheel Pros acquired Performance Replicas, Inc. assets — a leading replica wheel distributor known for factory reproduction wheels with long-standing national and internet retailer relationships. In December 2020, Wheel Pros acquired Just Wheels & Tires Co. and TSW, a leading proprietary aftermarket custom wheel designer and distributor focused on luxury and off-road markets — through these acquisitions and mergers, Wheel Pros aims to fuel its global market share.

Other key companies profiled include Status Wheels Inc. (U.S.), Fuel Off-Road Wheels (U.S.), Citic Dicastal Co Ltd. (China), Enkei Wheels India Ltd (India), Ronal AG (Switzerland), BBS Kraftfahrzeugtechnik AG (Germany), Alcoa Wheels (U.S.), MHT Luxury Wheels (U.S.), and Superior Industries (U.S.).

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Key Industry Developments

Key recent developments include Ronal Group's March 2021 launch of the new application wheel Ronal R67, featuring five narrow spokes and five distinctive double spokes bonded with colorful design elements — aero-style applications in red (Tornado Red) or anthracite (Track Grey) allow perfect air inlet for extra sporty appeal; and Ronal Group's December 2020 presentation of the world's first carbon-neutral recycled wheel, the Ronal R70-blue, made mainly from pre- and post-consumer material plus primary aluminum, 100% recyclable, and produced using renewable energy sources.

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