May 22, 2024

Foundry Service Market is Anticipated to Witness High Growth Owing to Rising Demand from Automotive Industry

Foundry services involves metal casting process that produces metal parts by pouring molten metal into molds or casts.These metal parts find extensive application in different industries including automotive, industrial machinery, construction, aerospace and defense. There has been rising demand of metal casting from automotive industry for components like engine blocks, cylinder heads, transmission cases and more. Other key advantages of foundry services include ability to produce complex metal parts with close dimensional tolerances, repeatability of parts and cost-effectiveness for high volume production.

The Global Foundry Service Market is estimated to be valued at US$ 126.27 Bn in 2024 and is expected to exhibit a CAGR of 6.8% over the forecast period 2023 to 2030.

Key Takeaways
Key players operating in the Foundry Service market are Nemak, Waupaca Foundry, Inc., Hitachi Metals, Ltd., Bharat Forge Limited, Alcoa Corporation, Thyssenkrupp AG, General Motors Company, Castings PLC, Metal Technologies, Inc., AAM Casting, Grede Holdings LLC, CIE Automotive, Precision Castparts Corp., Reliance Foundry Co. Ltd., Grupo Antolin-Irausa S.A. These players are focusing on new product development and expansion strategies to gain competitive edge.

There are significant opportunities for foundry services in automotive industry owing to rising vehicle production across the globe and increasing use of metal casting in auto components. Also, growing infrastructure development activities are expected to drive demand for metal casting from construction industry.

Key players are exploring opportunities in global markets to tap the growth potential. For instance, companies are investing in expansions, mergers and acquisitions to strengthen their presence across regions like North America, Europe, Asia Pacific and Latin America.

Market drivers and restrain
The primary driver for the Foundry Service market is rising vehicle production globally. Growing automotive sales especially in countries like China, India, US, Germany is augmenting the demand for metal casting from automotive manufacturers. According to International Organization of Motor Vehicle Manufacturers, around 93 million vehicles were produced globally in 2020 which is expected to grow further in coming years.

However, volatility in raw material prices can negatively impact the profit margins of foundry service providers. Raw materials used in metal casting like iron, steel and aluminum are facing fluctuating prices depending on availability. Any rise in raw material costs puts pressure on foundry players to increase their product prices as well. This acts as a major challenge for market growth.

Segment Analysis
The foundry service market can be segmented by type into gray iron, ductile iron, steel, aluminum, and other types. Ductile iron segment currently dominates the market due to its high strength but lightweight properties which make it ideal for automotive components such as pistons, gears, brake rotors, and axles. Another fast growing segment is aluminum which finds application in engine blocks, transmission casings, wheels, and other under-the-hood components of vehicles due to its corrosion resistance and lightweight nature resulting in better fuel economy.

Global Analysis
Regionally, Asia Pacific currently accounts for the largest share of the foundry service market. The presence of several automotive component manufacturers and strong foundry industry in China, India, and other Southeast Asian countries are driving growth in this region. North America is another major region owing to the large automotive production bases and foundries in the US and Canada. However, Europe is expected to witness the highest CAGR during the forecast period with the growing emphasis on electrified and lightweight vehicles across major European automakers aiming to meet stringent emission norms. The foundry service market is also gaining traction in South America and Middle East & Africa with increasing industrialization and automotive production.

*Note:

  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it