APAC exhaust and ICE after-treatment market to decline at negative 2% CAGR over 2024-29, forecasts GlobalData

As environmental sustainability concerns continue to grow, electrification has become a key focus for governments worldwide, with the Asia-Pacific (APAC) region at the forefront of this transition.

China, being the largest market for electric vehicles (EVs), is leading the charge, while other Asian nations such as Japan, South Korea, India, and Indonesia are implementing policies to accelerate the adoption of EVs, which may negatively affect the market for the exhaust and internal combustion engine (ICE) after-treatment sector in APAC. Against this backdrop, the APAC exhaust and ICE after-treatment market is expected to record a negative CAGR of 2.0% over 2024-29, according to GlobalData, a leading data and analytics company.

GlobalData’s latest report, “Global Sector Overview & Forecast: Exhaust and ICE after treatment Q3 2024” reveals that the exhaust and ICE after-treatment market is estimated at 143.5 million units in 2024 and is forecast to decrease to 129.7 million units by 2029 in the Asia-Pacific region.

Madhuchhanda Palit, Automotive Analyst at GlobalData, comments: “The increasing stringency of emission regulation laws is compelling key industry participants to direct their efforts towards research and development (R&D) in order to adhere to permitted emission standards. For example, the most recent emission regulation in India, Bharat Stage VI (BS-VI), which took effect in April 2020, stipulates a sulfur allowance of only 10 parts per million. This has significantly influenced the advancement of ICE after-treatment components, such as gasoline particulate filters, which mitigate particulate matter emissions from direct injection engines in vehicles, and selective catalytic reduction systems.”

Driven by the electrification trend that is leading to a gradual decrease in the market of ICE engines, the instances of key players in the sectors announcing the intention to close down automotive exhaust system plants has been seen in recent years. However, due to inadequate charging infrastructure, countries such as Indonesia, and Thailand are still relying on ICE vehicles, where demand for exhaust systems is still growing.

The ongoing transition to electrification within the commercial vehicle sector presents significant economic challenges for fleet owners, thereby impeding the advancement of this transition. Consequently, this situation may lead to an increase in market demand for ICE after-treatment components, particularly for diesel engine vehicles, such as diesel particulate filters (DPF).
Palit concludes: “Although the exhaust and ICE after-treatment market is expected to post a negative CAGR over the forecast period, several challenges in widespread electrification adoption, such as higher price, battery range related concerns, inadequate charging infrastructure, and lack of consumer awareness, may create opportunities for growth in the sector.”