Covid-19 Impact: A Mix of Challenges and Opportunities for Stakeholders in Automotive Variable Oil Pump Market
In the current scenario, the rapid outbreak of coronavirus is leaving the entire automotive supply chain with unforeseen challenges. The major issues include raw material shortages, output reduction, OEM shutdowns, and weakening demand for vehicles. High uncertainty is also noticeable among automotive performance parts manufacturers on business continuity and short-term business outlook. Additionally, the Covid-19 pandemic has had a significant impact on operations of the automotive pumps market in general and the automotive variable oil pump market in particular, due to reduced OEM demand and plant shutdown in the hardest hit countries such as China. Moreover, as the spread of the disease intensifies beyond China, automobile and component manufacturing plants are shuttering and consumer footfalls in showrooms are falling sharply across the globe, thereby creating a hindrance in the current growth prospects of the automotive variable oil pump market.
The automotive industry is on the frontline of pandemic disruption, subjecting the economic outlook into uncertainty. In addition, some of the most affected European and Asian Pacific countries are major production hubs and home to key links in the industry’s global supply chain. With increase in the number of unique challenges, key players in the automotive variable oil pump will need to remain focused and nimble to better navigate the worsening crisis. In the light of uncertain near-term outlook, these players will also need to reaffirm business agility while considering government responses.
In 2019, worldwide sales of automotive variable oil pump surpassed the US$ 1 Bn mark, driven by the need to boost fuel efficiency and power of vehicle’s wheels. However, given consideration to highly affected countries that account for significant share of the global auto manufacturing and supply chain, it is likely to be difficult for market players to recover from the disruptions. On the hand, a glimmer of hope is seen as China reopens their factories while keeping the spread of Covid-19 in check.
Automotive Variable Oil Pump Market – Updating Long-term Forecast
As manufacturers abandon their performance forecast in 2020 and place focus on long-term dimensions, some of the impactful factors will continue to influence the automotive variable oil pump market growth. In line with updates and enforcement of new environmental laws to reduce carbon emissions, vehicle manufacturers are focusing on integration of automotive variable oil pump and automotive oil pressure control valve that reduces up to 50% of CO2 as compared to fix displacement oil pump. Additionally, variable oil pump can supply the right amount of oil in all situations for efficient engine lubrication and piston cooling which is expected to offer tailwinds to the market growth.
Significant advancements in variable oil control technologies are projected to offer improvements in fuel economy, engine performance, emission reduction, and durability of newer models of vehicles. Customization of variable oil pumps to fulfill customers’ specific needs is also emerging as a promising trend in the market. Furthermore, as the demand for reduced energy loss in oil pumps increases and focus on weight reduction of vehicles grows strong, manufacturers are inclined towards downsizing the oil pump rotors that not only aligns with new norms but also reduces friction.
Fuel economy regulations and demand for environmental protection measures are expected to become stricter going forward. Automotive variable oil pump manufacturers are thus hard-pressed to up their innovation game. An embrace of R&D has also been underway to widen the scope of applications, especially to lubricate hybrid-vehicle transmissions and in electric motor-driven oil pumps. However, it is imperative to note that the Covid-19 outbreak and subsequent economic uncertainty is likely to reduce consumer demand leading to slump in sales of new vehicles and deferred spending on regular maintenance and services. This will continue to pose as a potential threat for stakeholders active in the automotive variable oil pump market.