The automotive market has only expanded during the course of history, except for the great recession in 2008. In fact, the global automotive industry's projected market growth of USD 3800 billion between 2025 and 2030 by Fortune Business Insights justifies the continuous market growth. Half of the market share is of the EV (electrical vehicle) industry, projected to be USD 1507.21 billion by 2028 at a CAGR of 27.2% between 2020-2028.
The rapid growth of automobile technology and the diversified global demand for sub-sectors of the automotive market are identified as key drivers for this colossal market growth.
Some prominent sub-sectors include automotive electrical and electronic components such as batteries, insulated wires and cables, and even high-precision sensors. The individual market share growth of each of these industries is heavily complemented by the automotive industry's USD 3800 billion market growth.
Although there was a significant drop in Sri Lankan export revenue back in April 2020 due to the Pandemic related challenges, merchandise export revenue grew 20% year over year to US$ 1,208.2 Mn in June 2022, according to data provided by Sri Lanka Customs. Electrical and electronic parts, including automotive batteries, insulated wires and cables, and high-precision sensors, have achieved cumulative profits of close to USD 188.3 million, a growth of 14.6% compared to 2020 and 2021.
Sri Lanka is currently in the process of exponentially conquering the massive global market for electrical and electronic automotive components. The attention to the automotive battery export industry is phenomenal, given the projected market size of automotive or vehicle batteries is USD 65.62 billion by 2030.
In fact, SLINTEC (Sri Lanka Institute of Nanotechnology), in collaboration with Associated Battery Manufacturers (ABM), produced the world's first Graphene-based Lead-acid battery in 2021. Lead acid batteries' charge acceptance improves because of the incorporation of graphene, which also lessens sulfation on the negative plates. Vein graphite, priced under $2, is used for manufacturing instead of regular graphite, which is priced close to $3,000.
SLINTEC has already made its inventions clear and set sights on making extremely efficient batteries with local graphite. The invention was made when the global market value of graphene was expected to reach USD 1 billion by 2027.
Analysing market segmentation by region increases the convenience of identifying high market share regions. For example, Maldives was the main destination for vehicle batteries from Sri Lanka, whose demand is over threefold that of Canada.
The global insulated wires and cables market experienced an unexpected decline in demand from 2021 to 2022. The drop in demand was estimated to be USD 5560 million. The main reason for the decline was the impact of COVID-19 on production and the supply chain.
However, Allied Market Research speculates that the global insulated wires and cables market will reach USD 244 billion by 2027 at a CAGR of 5.3%. The market segmentation of insulated wires and cables has four categories: material, installation, voltage, and end user.
Under the segmentation of materials, the optical fiber segment would grow at the highest CAGR of 7.0% during the forecast period. In the installation segment, overhead installations continue to hold the highest market share, while high voltage dominates the "by voltage" market segment.
Local cable manufacturers have clearly identified the significant surge in demand and are adapting their manufacturing processes accordingly to the present. Proof of the claim is the significant growth of insulated wires and cables exports in the first quarter of 2022 compared to 2021. The statistical data mainly from CBSL shows an 18.8% growth. The corresponding monetary value is USD 41.8 million. The promotion of unhindered exports after the arrival of Dr. Nandalal Weerasinghe, the current Governor of the Central Bank of Sri Lanka, has tremendously affected the boosted influx of exports.
Even during an economic downturn of lacking currency to import raw materials, sophisticated economic policies paved the way to achieve the export quota of insulated wires and cables in 2016, which was approximately USD 44 million, according to Trading Economics.
Sri Lankan exporters in the insulated wiring industry have already identified India as their main export destination. Indo - Sri Lanka Free Trade Agreement (ISFTA) has opened new doors of business opportunities to even middle-scale exporters, which must be utilized to the maximum extent.
Typical high-precision sensors can achieve a measurement resolution of ±0.1 µm and a measurement cycle of 250 µs, placing them at the highest level in the industry. The global market size of high-precision sensors in 2019 was USD 19.29 billion in 2019.
Fortune Business Insights speculates a sustainable growth reaching up to USD 35.56 billion by 2027, with a fast CAGR of 7.2% during the forecast period. Once again, the comprehensive automotive market positively affects this market growth as well.
Sri Lankan sensor design and manufacturing firms have sustained global competition despite limited resources. The strategy revolves around intellectual innovations that cannot be replicated easily, backed by incomparable niche market catering capability. Continuous affiliation with state universities and the patronage of these commercial parties are noticeable.
For example, the University of Sri Jayewardenepura, Sri Lanka produced a prototype ventilator at the height of the COVID-19 pandemic. The undergraduate invention is based on pressure sensors and is currently being developed under the patronage of the Industrial Development Board with a clear understanding of the export potential. Such developments are the cornerstones of acquiring the rapidly growing industrial sensor market.
Sri Lanka continues to explore and invent problem-solvers in market segments such as image sensors, pressure sensors, temperature sensors, level sensors, position sensors, and force sensors. The biggest strength that the Sri Lankan manufacturers and design firms experience currently is the massive, unprecedented state patronage. Thus, it is an open invitation to the interested parties to help Sri Lanka conquer as much global demand for high-precision sensors as possible.
New export strategies are designed to recover from the current economic crisis in a sustainable way. With the current market share and the projected growth, maximum use must be made of the automotive components industry as the country moves forward. With international corporate alliances and market demand, it will not be an unattainable target.