It is still about 20 years away, but eventually there will be no incandescent lighting found on modern automobiles.
In its place will be light-emitting diodes – computer chips programmed to produce light powerful enough for use as headlamps and turn signals, as well as inside the cabin.
For the aftermarket, which makes most of its money in replacing damaged headlights, taillights and burned-out bulbs, that requires a dramatic technology shift in how its products are designed, produced and marketed. Leading manufacturers such as Philips and Osram Sylvania are well on their way to transitioning their businesses.
Frost & Sullivan forecasts aftermarket sales of lighting components to remain flat over the next 5-7 years. Manufacturer-level revenues for headlights, taillights, auxiliary lighting, bulbs and accessories will total slightly more than $1 billion this year and increase by 0.1 percent annually through 2016.
However, the impact of LEDs plays only a minor role in the sluggish sales of automotive lighting. Vehicle collisions, the main driver for high-priced replacement parts, have declined substantially over the past decade – from 6.8 million in 1997 to 5.8 million in 2008, the last year for which data is available from the National Highway Transportation Safety Administration. Advanced vehicle safety systems like anti-lock brakes, tire-pressure monitoring systems and adaptive cruise control have a major impact on lighting sales by reducing the number of automobile crashes.
There is some good news for aftermarket suppliers. Sales of aftermarket headlights and taillights are growing faster than OE replacement parts. Original equipment parts still represent a large majority of revenues – in part because they cost twice as much as an aftermarket component. But major retail chains and warehouse distributor groups have raised the profile of these products by carrying them as a low-priced alternative to dealer parts. Prospects for future growth are strong in an environment of slumping new auto sales and an aging vehicle population.