Adoption of LED automotive lights has grown over recent years, but traditional halogen and Xenon HID lights still dominate the headlight market, said the company CEO Pierre-Yves Lesaicherre during an exclusive interview with LEDinside at Guangzhou International Lighting Exhibition (GILE), China from June 9-12, 2015.

Since becoming a separate entity and merging the LED components activity with the Philips automotive lighting business in September 2014, automotive lighting now comprises 60% of the company’s sales, while non-Automotive LED components make up the remaining 40%, said Lumileds CEO Pierre-Yves Lesaicherre.

Lumileds CEO Pierre-Yves Lesaicherre. (LEDinside)

Having witnessed fast growth over the last two years, Lumileds has witnessed significant growth in its automotive lighting business. “Lumileds experienced about 30% growth in Automotive lighting in 2014,” said Lesaicherre. “In headlights, auxiliary lighting functions and rear light combinations, but mostly in the front.”

Lumileds is one of the top two leading automotive lighting suppliers in the world, along with German LED competitor Osram. The company has a comprehensive product portfolio comprising of traditional halogen, Xenon HID lamps and LED automotive lights.

“We are in one out of three cars in the world”, said Lesaicherre. We are everywhere.” Lumileds lights can even be found in the most advanced race cars, such as the headlights of the Audi race car that won the Le Mans 24 Hour Race last year. “Almost all the cars in China also have our LEDs in them,” he added.

Although, the automotive lighting segment has shown strong growth, LED lights have not completely penetrated the mainstream headlight market. “LED headlamps are growing, and taking market share from conventional lighting, but conventional is still quite strong,” said Lesaicherre.

Crowds gather at Lumileds booth at Guangzhou International Lighting Exhibition (GILE) 2015. (LEDinside)

Due to the higher price tag, LED penetration in the automotive headlight sector has been growing steadily, but conventional lighting such as halogen and Xenon remains dominant . “LEDs are dominating in the high-end, and steadily penetrating the mid-range,” observed Lesaicherre. “It’s very important in electric and hybrid cars because of power consumption, but it is not penetrating the mainstream headlamp market yet.”

Instead, LED automotive lighting has mostly penetrated mainstream Daytime Running Lamps (DRL), rear lights and stop lights, noted Lesaicherre.

Speaking about the development of LED DRL, in Europe DRL is a mandatory safety regulation, “so in Europe there is no choice,” said Lesaicherre. Some imported European cars eventually made their way into the U.S. car rental market, where it has been perceived as a good safety measure that increases the visibility of cars, and makes it visible to pedestrians. However, the LED industry really has leading car makers to thank for transforming LED DRLs into an automobile styling feature, said Lesaicherre.

Pricing advantages still give traditional car lights a competitive market edge over LEDs. “Halogen is our bread and butter and still dominating in the mainstream (for headlight applications) because halogen technology is still significantly cheaper than LED,” said Lesaicherre.

However, the company has also observed a renewal of Xenon HID lamps in the SUV headlighting market in China and North America, said Lesaicherre. Lumileds has received and won a lot of Xenon HID SUV lamp orders from China and North America from a variety of car brands, said Lesaicherre.

Commenting on the growing interest from competing Asian LED manufacturers in the automotive lighting sector, Lesaicherre observed that the automotive lighting market is still very hard to enter, especially the tier-1 market. “I know that some Asian competitors are trying to get into automotive, but with very little success thus far,” said Lesaicherre.

The reason new LED manufacturers have had difficulty entering the automotive lighting market has mostly been automotive lighting companies’ reluctance to try new and unproved suppliers for lighting products. “Automotive manufacturers do not want to change suppliers just like that or try something that they are not familiar with in terms of product performance, quality, and supply chain performance,” said Lesaicherre.

In addition, LED manufacturers that are vying for the automotive lighting market have to be prepared for a long return on investment (ROI) period. “The qualification process for automotive lighting takes a long time, it is not for a supplier that wants a quick revenue return,” said a Lumileds officer.

(Authors: Roger Chu, Director, Research Division, LEDinside and Judy Lin, Chief Editor, LEDinside)