Automotive Labels Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Automotive Labels Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The automotive labels market is anticipated to register a CAGR of 5.37% over the forecast period (2022 - 2027). Due to the expansion of the packaging and labeling markets across all end-user industries, the automotive labels industry is expanding significantly. Additionally, laws requiring compliance with automotive labeling regulations are emerging as a result of the concurrent growth in the automotive sector.

Key Highlights

• A feature-rich platform, quicker production, and, subsequently, a shorter time to market, and worldwide outreach are some of the key factors defining a product's success in modern marketplaces. Automotive labels typically consist of badging and labels, such as barcode, estimate, and VIN labels, that display component information, a company's name and logo, price, technical information, and other important details.
• Additional factors anticipated to fuel market growth include the increased demand for smart labels, such as RFID and barcodes, and the rising demand for eco-friendly label production methods.
• Moreover, the consolidation of product categories and vendor capabilities in the marketplace has been made possible by mergers and acquisitions. UFP Packaging purchased Advantage Label & Packaging in January 2022. This company offered labels and associated tools, among other things, for the automotive industry. The acquisition, combined with their earlier purchases of Pallet One and T&R Lumber, puts UFP as a one-stop shop for all packaging requirements.
• In addition, the labels' durability can help the cars last longer by allowing them to survive difficult operating circumstances. This characteristic of the automobile labels is anticipated to accelerate market expansion. The markings make it simple for law enforcement to identify and find stolen automobiles. Additionally, the regulatory agencies can verify that the cars follow the relevant legislation.
• Additionally, the automotive labels market is growing due to technological advancements occurring in practically every sector of the economy. The millions of images and videos produced by autonomous driving platforms need to be appropriately categorized.
• However, the high cost of label manufacturing, particularly for small and medium producers, impedes market expansion. The supply of car labels is constrained because small manufacturers sometimes produce small volumes and cannot provide a significant return on investment.
• A rapid decrease in the automotive sector has occurred due to the COVID-19 outbreak and lockdown. As a result, the manufacturing of automobiles has decreased, negatively impacting the labels used in the industry. The market for vehicle labels also shrank due to reduced demand for unneeded goods and services. The COVID-19 pandemic significantly affected the automobile market, which had a severe drought in the first and part of the second quarter of 2020. The situation has led to a decrease in the price of automobile labels. Combined sales of two-wheelers, three-wheelers, commercial vehicles, passenger cars, and tractors decreased by 36.3% in July 2020, according to the FADA (Federation of Automobile Dealers Association).

Key Market TrendsWarning and Safety Labels Expected to Grow Significantly

• The warning and safety labels give drivers and passengers usage and practical operating information, such as safety protocols and details about potential hazards. This knowledge improves security and lowers liability concerns.
• The market for automotive labels may have significant demand during the anticipated period due to the rising need for vehicles among the world's population and increased security and tagging for safeguarding goods from various brands.
• In addition, a labeling error is the same as a defective component, and both situations risk serious harm. Consequently, preventing dangerous circumstances and protecting workers and passengers depend on clear, effective warnings.
• The use of these labels in the automotive industry is expected to increase in part due to the reduction of counterfeiting that the warning and safety labels help to achieve. Vendors offer labels that help protect the brand from tackling the counterfeiting issue.
• Additionally, several reasons, including an increase in the number of comparable items, safety worries, and modifications to branding strategies, are anticipated to fuel market expansion. French Auto Advertisements to Feature Cigarette-Style Warning Labels Promoting Green Alternatives because fossil fuels have replaced cigarettes treating the new smokes as fossil fuels. All automotive advertisements in France will feature cautionary warnings like those for alcohol and cigarettes. The law will become operative in March 2022, consisting of three rotating messages to encourage using more environmentally friendly vehicles: Prioritize cycling or walking for short distances. Consider sharing a lift. Take public transportation regularly.

North America Expected to Grow Significantly

• The automotive labels market in the North American region is predicted to rise significantly due to the considerable technological shifts in the area. Additionally, established and up-and-coming companies are anticipated to promote market expansion.
• Moreover, significant elements fueling the demand for automotive branding include the presence of big manufacturers in the region and their collaborations with small local businesses to improve distribution.
• The rising automotive labels sector in the region is largely attributed to the sharp increase in demand for vehicle labels and the rigorous observance of vehicle labeling requirements. For instance, in January 2022, the SLBS (Saint Lucia Bureau of Standards) noted that the XCEL motor oil 10W-30 API SC in question was formulated for a specific use and wanted to warn the public that when buying engine oils, consumers should make sure that it is suitable for their needs by confirming that the product specification is in line with the requirements of their vehicle or the intended purpose. The SLBS reminds customers how crucial it is to read product labels, especially when their and others' safety is in danger due to improper usage or non-compliance.
• Technology advancements, breakthroughs in the printing and labeling sector in North America, and innovations in adhesive technologies are producing improved automobile labels and, as a result, opening up huge prospects for North American manufacturers.
• Many market players are viewing strategic alliances and partnerships as a lucrative path for expansion. For instance, OPM Group has extended its presence in the United States market by forming a partnership with Syracuse Label & Surround Printing and Macaran Printed Products, both in New York. The cooperation, known as Skylark, will make OPM's patented Thicker Label Closure (TLC) technology for wet wipe products available in the United States. It represents the following crucial phase in OPM's ambitious growth strategy, backed by a sizeable investment in new presses in both the United Kingdom and the United States.

Competitive Landscape

The competitive landscape of the automotive labels market is consolidated due to the presence of few vendors in the market providing the solution having the majority of the market share. Companies are emphasizing investment & expansion to increase their business operations in fast-growing regions like the Asia-Pacific. Since the companies are still investing in R&D to develop products and solutions and deliver to the customers according to the demands, the companies are also viewing strategic partnerships and acquisitions as the most lucrative path to gain maximum market share.

• March 2022 - Avery Dennison Corporation stated that the company had acquired the linerless label technology created by Catchpoint Ltd, a UK business headquartered in Yorkshire, England. Avery Dennison will have intellectual property after receiving Catchpoint that will help us achieve two key 2030 sustainability goals: to produce innovations that promote the circular economy and to reduce environmental impact in operations and technology.
• July 2021 - Resource Label Group, LLC announced the completion of a merger agreement with funds controlled by Ares Management Corporation's Private Equity Group. Previously, First Atlantic Capital and TPG Growth had Resource Label as a portfolio firms. The executive management team at Resource Label Group, led by Apperson, will keep the business on track while focusing on expansion and developing new competencies in the label and packaging industry.

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