South America Automotive Forging Market, By Material (Aluminium, Steel, Others), By Component (Gears, Piston, Bearing, Axel, Connecting Roads, Crankshaft, Others), By Vehicle Type (Passenger Cars, Light Commercial Vehicles, Heavy Commercial Vehicles), By Country, Competition Forecast & Opportunities 2020-2030F

Market Overview

The South America Automotive Forging market was valued at USD 9.41 Billion in 2024 and is expected to reach USD 12.47 Billion by 2030 with a CAGR of 4.8% during the forecast period. The South America automotive forging market is experiencing steady growth, driven by rising vehicle production, the recovery of automotive manufacturing post-COVID-19, and growing demand for lightweight, fuel-efficient vehicles. The region's focus on enhancing fuel efficiency and reducing vehicle emissions has led to a surge in demand for forged components, especially those made from aluminum and advanced high-strength steels, as automakers aim to meet stringent environmental regulations. Brazil, being the largest automotive hub in South America, significantly contributes to regional market dynamics with robust manufacturing infrastructure and OEM presence. Technological advancements in forging techniques—such as precision forging and closed-die forging—are helping manufacturers improve product strength and durability while reducing material waste and machining time. Moreover, the growing penetration of electric and hybrid vehicles is reshaping component demand, especially for lightweight and high-strength forged parts to offset battery weight. The aftermarket segment is also contributing to market growth due to aging vehicle fleets and the increasing need for component replacements. Strategic partnerships between global forging companies and regional players are enabling technology transfer and capacity expansion. Additionally, favorable government policies supporting local manufacturing and foreign investments in automotive production are fostering market development. However, market players continue to face challenges such as fluctuating raw material prices and high capital investment requirements for forging equipment. Overall, the South American automotive forging market is poised for growth as manufacturers invest in advanced materials and technologies to meet evolving performance, sustainability, and cost-efficiency requirements.

Key Market Drivers

Rising Demand for Lightweight and Fuel-Efficient Vehicles

One of the primary drivers of the South America automotive forging market is the increasing demand for lightweight and fuel-efficient vehicles. As global climate change concerns intensify and fuel prices remain volatile, regulatory bodies across South America are aligning with global emission standards, prompting automakers to innovate in material usage and design. Forging, particularly using lightweight materials such as aluminum and advanced high-strength steel (AHSS), plays a critical role in reducing the overall weight of vehicles while maintaining structural integrity and durability. Brazil’s National Association of Vehicle Manufacturers (ANFAVEA) reports production of 2.55 million vehicles in 2024, marking a 9.7% increase from 2023—ushering Brazil back into the 8th spot globally. The breakdown includes nearly 1.9 million passenger vehicles and over 485,000 commercial vehicles, representing year‑over‑year growth of about 6–15% across various segments.  Lightweight forged components such as crankshafts, connecting rods, and gears are essential in improving fuel economy and lowering emissions. With governments in major countries like Brazil and Argentina implementing fuel efficiency targets and incentivizing eco-friendly automotive technologies, manufacturers are increasingly turning to forging solutions to meet these requirements. This shift toward material innovation has led to a significant rise in the adoption of aluminum-forged parts in internal combustion engine (ICE) vehicles as well as hybrid and electric vehicles (EVs). The integration of lightweight forged parts not only enhances fuel efficiency but also boosts engine performance and prolongs component life, offering end-users both economic and performance benefits. As consumer awareness of environmental sustainability continues to grow, automakers are compelled to offer greener mobility solutions, thereby strengthening the demand for forging in the region’s automotive value chain.

Growth in Vehicle Production and Aftermarket Demand

The steady rebound in vehicle production across South America, particularly in countries like Brazil, Colombia, and Argentina, is another significant driver of the automotive forging market. Brazil, being one of the top automotive producers in the region, is experiencing a resurgence in manufacturing activity fueled by domestic demand recovery, increased export orders, and policy support for industrial growth. The rising urbanization and expanding middle-class population are further accelerating the demand for passenger cars and light commercial vehicles. As OEMs ramp up production to meet consumer demand, the requirement for forged automotive components such as axles, bearings, and pistons is witnessing a substantial increase. Brazil's sales of electric vehicles (EVs) increased by 90pc to a record 177,360 units in 2024, according to the electric vehicle association ABVE. Additionally, the automotive aftermarket segment is playing a vital role in sustaining forging demand. South America has a large population of aging vehicles still in operation, creating a continuous need for replacement parts and maintenance services. Forged components, known for their superior strength and longevity, are preferred in both OEM and aftermarket channels. Independent garages, auto workshops, and parts distributors are contributing to the growing demand for quality forged parts, especially in regions where vehicle life cycles are extended due to economic constraints. As consumer expectations for vehicle reliability and longevity increase, both OEMs and aftermarket players are prioritizing forged components that offer enhanced durability and performance. This dual push from original production and aftermarket replacement is significantly bolstering the market trajectory of automotive forging in South America.

Technological Advancements and Localization of Manufacturing

Technological innovation in forging processes and the increasing localization of automotive component manufacturing are critical drivers accelerating market growth in South America. Traditional forging methods are being replaced by advanced techniques such as closed-die forging, warm forging, and precision forging, which offer improved accuracy, material efficiency, and mechanical performance. These innovations allow manufacturers to produce complex shapes with tighter tolerances, reducing the need for extensive post-processing and minimizing scrap. Argentina—a major regional partner—saw automakers pledge over US$655 million from Stellantis, US$300 million from Renault, and US$50 million from Toyota in 2024, reflecting confidence in localized industry growth. Furthermore, automation and digital control systems are enhancing productivity and consistency in forging operations, making it easier for regional manufacturers to meet global quality standards. As a result, several global forging companies are partnering with local South American firms or setting up regional facilities to leverage cost advantages, reduce import dependence, and cater to local automotive OEMs more effectively. The localization trend is further supported by government initiatives promoting industrial development and self-reliance, particularly in Brazil. Incentives such as tax benefits, infrastructure support, and favorable trade agreements are encouraging investments in local forging units and supply chains. Additionally, the proximity to end-users reduces lead times and logistics costs, improving competitiveness for regional suppliers. With the rise in electric and hybrid vehicles, the need for innovative forged components such as lightweight transmission parts and electric drive modules is growing, prompting local firms to invest in R&D and collaborate with global experts. Overall, the synergy of advanced forging technologies and localized production strategies is fostering a resilient and technologically advanced automotive forging ecosystem in South America.

Download Free Sample Report

Key Market Challenges

Fluctuating Raw Material Prices and Supply Chain Disruptions

One of the most significant challenges confronting the South America automotive forging market is the volatility in raw material prices, particularly for steel and aluminum, which are the primary inputs in forging operations. The cost of these metals is influenced by global market dynamics, including mining output, international trade tensions, and energy prices. In recent years, geopolitical instability, such as trade disruptions between major economies and sanctions on raw material exporters, has caused considerable fluctuations in input costs. For South American forging companies, which often depend on imported raw materials due to limited local production, such price volatility can erode profit margins and disrupt long-term planning. Compounding this issue are logistical inefficiencies and port delays, especially in countries like Argentina and Brazil, where infrastructure constraints impact the timely import of forging-grade alloys and components. Additionally, the COVID-19 pandemic exposed deep vulnerabilities in global supply chains, including prolonged lead times and unavailability of critical materials, which resulted in production delays for automotive OEMs and Tier 1 suppliers across the region. Although markets have gradually recovered, the forging industry remains sensitive to such disruptions. Smaller local forging firms, in particular, lack the financial and operational flexibility to absorb these shocks, making them more vulnerable to material shortages and cost escalations. Unless regional raw material supply chains are strengthened and diversified, the unpredictability in pricing and availability will continue to hamper the forging sector’s competitiveness and stability.

High Capital Investment and Technological Barriers

Another pressing challenge in the South American automotive forging industry is the high capital investment required to establish and upgrade forging facilities. Forging operations demand heavy-duty presses, hammers, furnaces, dies, and precision machining equipment, all of which involve significant upfront costs. Beyond machinery, the adoption of modern forging technologies—such as closed-die forging, isothermal forging, or automated production lines—requires additional investment in digital infrastructure, skilled labor, and process integration systems. For many small- and mid-sized forging companies in South America, these financial requirements are a substantial barrier to entry or technological upgrading. Moreover, local financial institutions may not always provide favorable lending terms for capital-intensive industrial projects, further limiting innovation and modernization. The lack of access to cutting-edge technologies also creates a technological divide between domestic suppliers and global competitors, reducing the competitiveness of South American players in both domestic and export markets. In contrast, international forging giants benefit from scale, automation, and R&D capabilities, allowing them to produce higher-quality forged parts at lower costs. This puts pressure on local players to either form joint ventures with foreign firms or risk losing business from OEMs increasingly focused on high-performance and precision components. In this environment, companies that are unable to adapt to evolving technological standards may find themselves sidelined, restricting overall market growth and industrial advancement within the region.

Regulatory and Environmental Compliance Pressure

Environmental sustainability and regulatory compliance pose another significant challenge for the automotive forging market in South America. Forging is an energy-intensive process that involves high temperatures and generates emissions, noise, and industrial waste. As South American governments strengthen environmental laws in line with global sustainability commitments—such as the Paris Agreement—automotive and component manufacturing industries are facing stricter environmental standards. Regulations related to greenhouse gas emissions, energy efficiency, waste disposal, and occupational safety are becoming more rigorous, necessitating costly investments in cleaner technologies, pollution control equipment, and compliance systems. For forging manufacturers, this means additional operational costs and a need to revamp traditional manufacturing practices. Smaller and less technologically advanced firms often struggle to meet these standards due to the financial burden and lack of technical expertise, which may result in penalties, plant closures, or loss of business from environmentally conscious OEMs. Furthermore, regulatory inconsistencies across countries in South America can create compliance confusion, particularly for multinational or cross-border suppliers. For instance, Brazil’s regulatory framework is far more developed compared to other countries in the region, creating uneven playing fields and potential trade friction. In the long term, forging companies will need to adopt more sustainable practices—such as using renewable energy, adopting waste heat recovery systems, and switching to cleaner lubricants—to align with evolving environmental expectations. While these efforts can offer long-term benefits, the transition involves a steep learning curve and financial commitment that not all market participants are prepared to undertake.

Key Market Trends

Rising Integration of Automation and Industry 4.0 in Forging Processes

A prominent trend transforming the South American automotive forging industry is the increasing integration of automation, digitalization, and Industry 4.0 technologies. As global forging markets shift toward smarter, more connected manufacturing ecosystems, South American forging firms are beginning to invest in robotics, real-time process monitoring, and computer-aided design (CAD) tools to enhance productivity and consistency. Automation in forging lines—such as robotic handling of billets, automated die lubrication systems, and real-time dimensional inspection—reduces human error, increases throughput, and minimizes downtime. Moreover, the deployment of data analytics and predictive maintenance systems enables manufacturers to optimize energy consumption, reduce scrap rates, and extend the life of critical equipment. While the adoption curve in South America lags behind that of North America and Europe, early movers in Brazil and Argentina are collaborating with global technology providers to upgrade their facilities. These advancements not only boost competitiveness but also help forging firms comply with stricter OEM quality standards and international certifications. The rise of Industry 4.0 is particularly valuable in forging operations, where real-time temperature and pressure control significantly influence product quality. As more forging companies embrace smart manufacturing, the region is likely to see improved efficiency, lower operational costs, and enhanced responsiveness to the evolving needs of automotive manufacturers.

Shift Toward Near-Net Shape Forging for Cost and Material Efficiency

Another notable trend gaining momentum in the South America automotive forging market is the shift toward near-net shape forging. This manufacturing technique allows components to be forged closer to their final dimensions, significantly reducing the need for extensive post-forging machining processes. As automotive OEMs and Tier-1 suppliers push for cost reductions, minimal material wastage, and shorter production cycles, near-net shape forging is emerging as a preferred solution. This process is particularly advantageous for complex automotive components such as crankshafts, gears, and suspension parts, where tight tolerances and high strength are critical. In South America, manufacturers are exploring this technique not only to reduce the cost of raw materials—particularly expensive alloys like aluminum—but also to improve tool life and production speed. Furthermore, near-net shape forging supports the regional drive toward sustainability by minimizing energy consumption and reducing the carbon footprint associated with machining. As machining costs and energy tariffs remain high in countries like Brazil and Chile, the economic and environmental benefits of this technique are driving its adoption. Advanced simulation software and CAD/CAM integration are further enhancing the feasibility of implementing near-net shape processes. This trend is poised to play a key role in enabling South American forging companies to meet the growing expectations of global OEMs for precision, cost efficiency, and eco-friendly production.

Growing Focus on Electric Vehicle (EV) Component Forging

As the electric vehicle (EV) ecosystem slowly expands across South America, the forging industry is witnessing a notable shift in the types of components being demanded by OEMs. Traditional internal combustion engine (ICE) components—like connecting rods and crankshafts—are gradually being replaced or supplemented by EV-specific parts such as rotor shafts, transmission components, and differential gears. Although EV adoption in South America remains at a nascent stage compared to more mature markets, government initiatives and urban mobility reforms are encouraging the introduction of hybrid and electric vehicles in cities like São Paulo, Buenos Aires, and Santiago. In response, forging companies are diversifying their product offerings to include components tailored for electric drivetrains, such as lightweight and high-precision parts that can withstand high torque and operate at lower noise levels. The need for thermally stable and corrosion-resistant forged components in EVs is also driving material innovation, including the use of aluminum alloys and special steels. Furthermore, with the battery pack being the heaviest part of an EV, manufacturers are under pressure to use forged components that reduce overall vehicle weight. This shift is gradually pushing South American forging firms to rethink their design and manufacturing strategies to align with the evolving powertrain landscape. Over the next decade, as regional EV infrastructure improves and consumer acceptance increases, the forging industry’s role in the EV value chain is expected to become significantly more pronounced.

Segmental Insights

Vehicle Type Insights

In South America, the passenger car segment is the largest consumer of forged components, owing to the high production volumes and broad diversity of parts required. Components such as crankshafts, connecting rods, gears, axles, and suspension arms are commonly forged to ensure durability, performance, and safety. With rising consumer expectations for better fuel efficiency and engine performance, there is increased demand for lightweight and high-strength forged components. Technological advancements, such as turbocharging and engine downsizing, are also influencing the material and design specifications of forged parts in this segment. Furthermore, the trend toward hybrid and electric passenger vehicles is creating new opportunities for lightweight forged components, including aluminum and high-strength steel applications.

Material Insights

In South America, steel remains the most widely used material in the automotive forging industry due to its superior mechanical strength, durability, and resistance to deformation under high-stress conditions. It is preferred for critical components such as crankshafts, axles, and gears that demand exceptional tensile strength and fatigue resistance. Forged steel components are integral to maintaining vehicle performance and safety in both passenger and commercial vehicles. The material’s adaptability to heat treatment, ease of welding, and cost-efficiency further enhance its industrial value. Alloy and carbon steels are favored for high-performance automotive applications where enhanced wear resistance and hardness are required. Additionally, the abundant availability of steel and well-established processing infrastructure across South America support its continued dominance in the forging landscape.

Download Free Sample Report

Country Insights

In South America, Brazil is the undisputed leader in the South American automotive forging market, driven by its dominant automotive manufacturing sector, well-developed industrial infrastructure, and significant domestic demand. The country is home to major global OEMs and Tier 1 suppliers, including Volkswagen, Fiat, GM, and Mercedes-Benz, all of which have long-established production facilities within its borders. This robust ecosystem supports a steady demand for forged automotive components such as crankshafts, gears, axles, and connecting rods. Furthermore, Brazil's mature steel and metal processing industries ensure a consistent supply of raw materials necessary for forging operations. Government policies that promote local manufacturing, combined with investments in mobility, road freight, and EV production, bolster Brazil’s leadership in both volume and value terms. The country's focus on flex-fuel and hybrid vehicles is also opening new opportunities for lightweight forged components. In short, Brazil’s strategic position, strong domestic demand, and extensive production capabilities make it the leading country in the regional automotive forging landscape.

Recent Developments

• In 2024, Chinese EV giant BYD officially broke ground on a major automotive complex in Bahia, encompassing three plants, including passenger vehicle production and suppliers’ facilities. The project, built on the former Ford site, spans 4.6 million m² and is expected online by late 2024 or early 2025, with an initial capacity of around 150,000 vehicles per year.
• In 2024, BYD and Brazil’s energy company Raízen Power signed an agreement to deploy 600 high‑power DC stations (18 MW total capacity) by building out a nationwide charging network, supporting BYD’s investment in EV production and enabling infrastructure growth throughout Brazil.
• In 2024, Stellantis revealed its plan to invest US $385 million into its Córdoba plant through 2030, focused on building a new engine production line and launching hybrid‑flex vehicles in Latin America, aligning with its broader South America electrification strategy.
• In 2025, GAC unveiled its “Brazil Initiative” in São Paulo, introducing five vehicles—AION V, AION Y, HYPTEC HT, GS4 Hybrid, and AION ES—and establishing a dealer network of 33 outlets covering over 95 % of the Brazilian market, marking its formal market entry.

Key Market Players

• Nanjin Automobile Forging Co Ltd
• ThyssenKrupp AG
• Bharat Forge Limited
• Meritor Inc
• Aichi Forge USA Inc
• Kovarna Viva
• CIE Automotive SA
• Dana Inc
• NTN Corporation
• American Axle & Manufacturing Inc.

Report Scope:

In this report, the South America Automotive Forging market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• South America Automotive Forging Market, By Vehicle Type:

o   Passenger Cars

o   Light Commercial Vehicles

o   Heavy Commercial Vehicles

• South America Automotive Forging Market, By Material:

o   Aluminium

o   Steel

o   Others

• South America Automotive Forging Market, By Component:

o   Gears

o   Piston

o   Bearing

o   Axel

o   Connecting Roads

o   Crankshaft

o   Others

• South America Automotive Forging Market, By Country:

o   Brazil

o   Argentina

o   Columbia

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the South America Automotive Forging market.

Available Customizations:

South America Automotive Forging market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

South America Automotive Forging Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at sales@techsciresearch.com