Advances in technology to result in need for re-engineered aftermarket lighting system

The North American aftermarket is increasingly being impacted by development of new OEM technologies and improvement in component durability, which is reducing demand for some important replacement parts. Aftermarket lighting is one such category that is likely to be impacted by growth of new technologies such as light-emitting diodes (LEDs), organic LEDs (OLEDs) and high-intensity discharge (HID). Even though the migration to LEDs is still in its infancy, another new lighting technology – laser technology — already threatens to take its place.

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BMW, for example, will introduce the industry's first laser headlamp in the 2013 model of its i8 plug-in hybrid. Boasting up to 170 lumens per watt of output, it generates almost twice as much light as today's most advanced LED headlamps. In order to alleviate concerns regarding use of laser technology in on-road vehicles, the laser will first be converted into a pure white light through use of a fluorescent phosphor material inside the headlight. While the emitted light will be more intense than LED, increasing visibility, it will be white in color, thus making it more comfortable to the eye.

In addition, the most recent manufacturer after BMW to announce the use of laser technology for headlights and tail lights is Audi in its electric A2 concept car. Audi’s laser beam tail lights, known as “matrix beams,” will be configured with microreflectors so that they do not face directly towards the traffic. Subsequently, this will make these laser lights more powerful than LEDs, while also making it comfortable to the eye and alleviating safety related concerns.

At the OE level, the advantage of laser technology over LED is reduced energy consumption translating into fuel savings. This is especially advantageous for hybrid and electric cars, as lower energy consumption results in slightly more range or distance that the car travels. Further, the small size of laser diodes opens up innovative design possibilities for integrating the light source into the vehicle. However, at the aftermarket level, such technologies will have a profound impact on replacement demand, especially in the long term.

Laser headlamps are expected to have a service life of almost 10,000 hours. Since headlamps are used in low visibility conditions and for driving at night, laser light technology may result in components that outlast the vehicles on which they are installed. Combined with increased penetration of other long-lasting technologies such as LED, this presents a challenge for aftermarket manufacturers as it restrains sales of most non-collision components. Without sales generated by part failure or expiration, suppliers would be wholly dependent on vehicle collisions and non-collision upgrades to drive their revenues. Between 2011 and 2018, aftermarket revenues in the lighting category are expected to grow at a CAGR of 0.5 percent from $1.04 billion in 2011 to $1.08 billion by 2018. Revenues are expected to be primarily driven by price increase rather than a rise in unit shipments.

Major players in the lighting space such as Philips, Osram Sylvania, Hella, Valeo and Federal-Mogul are already diversifying and developing new products based on these technologies, particularly with LED. In conjunction, it becomes imperative for the aftermarket to develop solutions that are compatible with future automotive lighting systems.

While the replacement rate for standard components may remain low, technicians could upsell customers a premium lighting component based on these new technologies. While this offers technicians the opportunity to increase their revenues, customers benefit from improved visibility and reduced replacement expenditure over the life of the vehicle.