The metal matrix composites market was valued at USD 331.59 million and is expected to grow at a CAGR of 6.35% during the forecast period (2021-2026). Increasing demand for lightweight materials in the aerospace & defense industry and superior properties of metal matrix composites over metals are the major factors driving the demand for market studied. On the flipside, the declining automotive industry and the impact of COVID 19 are expected to hinder the growth of the market.

- Growing use in the locomotive industry and increasing adoption of electric vehicles are expected to provide new opportunities for the market studied.
- North America accounts for the highest market share in 2020. However, Asia-pacific is projected to dominate the market through the forecast period.
- Among the end-user industries, automotive and locomotive accounted for the highest market share and is also expected to dominate the market studied during the forecast period.

Key Market Trends

Automotive and Locomotive Segment to Dominate the Market

Metal matrix composites for automotive applications are based on aluminum and its alloys. Generally, MMC’s are used in the production of automotive engines is to lower the mass of reciprocating parts and hence generate less noise and vibration. Compared to other light metals, such as titanium and magnesium, lightweight and low cost are the main reasons for the large use of aluminum and its alloys in the automotive industry. The piston crown, where the increased hot strength of the MMC enables a lighter element to be used, is the most widely attacked feature of the engine.

Toyota and Honda are among the largest car firms that have commercially begun using MMCs based on aluminum in their engines. In its diesel engines, Toyota has used MMC pistons and Honda has used steel wire reinforced aluminum connecting rods and Al-Si matrix MMC for car cylinder blocks. MMC's are commonly used in the manufacture of valve train parts and lightweight brake calipers due to increased wear resistance, durability, and thermal properties. After a prolonged tenure of growth during the past decade, the momentum of the automotive sector has slowed down in recent years. Sales of new vehicles are going down in various parts of the world, including Europe and the United States, as business models and markets are changing, and so is the competitive landscape. Nowadays, as a result of the boom of smartphones and convenient cab services, such as Ola, Uber, Lyft, GoCatch, GrabTaxi, Hailo, etc., are taking over the transportation market.

Another important factor contributing to the decline in vehicle sales across big cities is traffic. A large volume of car sales is driven by young, upcoming professionals with growing income levels and fewer liabilities. However, even if these individuals have the money to buy a car, they will likely spend a lot of their time driving it in congested traffic or looking for a suitable parking space. The stress of maintaining the car and the cost of ownership further complicates the issue. The automotive industry is focused on innovation, and the onboard technology is turning them into computers on wheels. Most of the new-generation vehicles are equipped with cutting edge connectivity features, which help in generating reams of data at high speed, allowing people to drive safely.

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The automotive industry has seen slowdown from couple of years. According to the International Organization of Motor Vehicle Manufacturers (OICA), the automotive production witnessed a 5.2% decline from 96,869,020 unit in 2018 to 91,786,861 units in 2019. Also, the sales of the automobiles has declined in 2019 by around from 95.06 million units in 2018 to 91.29 million units in 2019. Asia which is the largest automotive manufacturing hub has witnessed a decline of 6.4% in 2019. The major countries like China, Japan, India, South Korea, Thailand and Indonesia have registered negative growth in the production. This is majorly due to factors like decline in domestic demand, increasing labor costs and implementation of new vehicle norms (BS-6 vehicles in India). Furthermore, the slowdown in the manufacturing sector, due to the economic slowdown and lockdowns due to COVID-19 outbreak, is expected to have a negative impact on the growth of the automotive industry in short to medium term, in all the regions. This factor is likely to have an adverse impact on the demand for metal matrix composites in coming years

China to Drive the Market Growth

In the Asia-Pacific region, China is the largest economy in terms of GDP. The country witnessed about 6.1% growth in its GDP during 2019, even after the trade disturbances caused due to its trade war with the United States. Although China was the first country affected by COVID-19 and its related lockdown, it was the first country to come out of the lockdown. However, the country has been witnessing recurring cases of COVID-19, leading to brief lockdowns occasionally. The manufacturing sector in the country has taken a major hit in Q1 2020, subsequently leading to a 6.8% drop in GDP, the lowest ever witnessed in years. However, the country has been focusing on several measures, such as tax breaks and other incentives to enhance economic recovery. Overall in 2020, China’s GDP has recorded a growth rate of 1.9%, indicating signs of a V-shaped recovery.

The Chinese aerospace policy represents one of the most comprehensive attempts to enter the top levels of aerospace development and production. China is expected to be the world’s largest single‐country market for civil aircraft sales, over the next 20 years. Under the plan ‘Made in China 2025’, it is expected that China is likely to supply over 10% of home-made commercial aircraft to the domestic market by 2025. This is expected to propel the demand for metal matrix composites market in aerospace sector during the forecast period. According to COMAC, it has received 815 orders from 28 airlines. Like with the ARJ21, these are initially Chinese airlines, but COMAC will undoubtedly start to target further afield once the aircraft is proven. Moreover, there are other aircrafts also which are manufactured with aim to compete with the high-standard Airbus and Boeing commercial aircrafts. These developments in the domestic aircraft manufacturing is expected to propel the demand for the market studied in the country. Furthermore, Boeing predicted that China may purchase USD 1.1 trillion worth of new aircraft by 2036, after the company announced that it made a sales of USD 37 billion in the country.

The Chinese automotive manufacturing industry is the largest in the world. The industry witnessed a slowdown in 2018, wherein the production and sales declined. Similar trend continued, with the production witnessed a 7.5% decline during 2019. The production vehicles in 2019 was 25,720,665 units. According to the China Association of Automobile Manufacturers (CAAM), automotive production has declined in 2020. The performance of the automotive industry was affected by the economic shifts and China's trade war with the United States. In 2020, the manufacturing facilities has been shutdown and halted production in the country due to the COVID-19 pandemic and lockdown. This, is expected to hamper the automobile production in the country in 2020. However, the manufacturing plants has resumed operations. The manufacturing activities are picking up pace, thus, driving the demand for the market studied.

China has the world’s largest electronics production base. Electronic products, such as smartphones, TVs, wires, cables,, portable computing devices, gaming systems and other personal electronic devices recorded the highest growth in the electronics segment. The country serves not only domestic demand for electronics, but also exports electronic output to other countries. In China, with the increase in the disposable income of the middle-class population and the rising demand for electronic products countries importing electronic products from China, the production of electronics is projected to grow. With the growing electronics and construction industry, the demand for the market studied is expected to increase. Although, current COVID-19 outbreak in the country is expected to hamper the growth of the electronics market in the country during 2020-2021.

Competitive Landscape

The global metal matrix composites films market is partially fragmented in nature with the presence of a large number of global and local players in the industry. The major players in the market include GKN Sinter Metals Engineering GmbH, Materion Corporation, 3M, Sumitomo Electric Industries, Ltd., and CPS Technologies Corporation, among others.

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