Japan LED Lighting Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2030

Japan LED Lighting Market Trends

Increasing number of households drive the growth of the LED lighting market

• In 2021, the overall population of Japan was estimated to be 125.51 million. Given a rising population boost, a rise in residential space availability is anticipated. Approximately 859,500 houses were built in the country in 2022. Increased government spending, housing program subsidies, and the government's anticipated focus on major infrastructure projects are expected to contribute to Japan's residential market expansion. This is anticipated to lead to higher LED sales in the residential sector. Consequently, more commercial land is expected to be purchased due to the drop in commercial real estate prices, thus contributing to an increased use of LEDs in coming years.
• Around 55.7 million private households existed in Japan in 2020. About 54.2% were nuclear families, and 38.1% were single-person households. In 2021, Japan had 55.6 million homes. In 2021, the indicator showed a 0.6% Y-o-Y growth. The indicator increased by 8.5% from 2010 to 2021. In 2022, there were 2.2 household members on average and an estimated 4.4 rooms per home. The expansion of LEDs in Japan is expected to be fueled by the increased number of households.
• Nearly 46.1% of households in Japan had one passenger car as of August 31, 2020. The number of newly registered motor cars in Japan fell from roughly 4.45 million the year before to about 4.2 million in 2022. In 2022, Japan saw the registration of almost 4.2 million new cars. These registrations exhibit the growing market for LEDs in the automobile sector.

Increasing aging and shrinking population are expected to hinder the growth and demand for real estate

• In 2022, construction for owned housing complexes began at about 253,300 projects in Japan. Owner-occupied home developments fell by 11.3% from the previous year. Though new house constructions are developing yearly, the growth percentage has declined. This suggests that the increase in properties is expected to create more LED penetration for the need for illumination in the country.
• Disposable income in Japan is high compared to other developing nations. For instance, in 2022, India had USD 2301.4, Vietnam 3716.8, and China USD 12,732.5, which resulted in the rising spending power of individuals and affording more money on new residential spaces. Japan's per capita income reached USD 33,911.2 in December 2022, compared with USD 39,916.1 in December 2021. Compared to 2021, the disposable income was reduced because Japan’s economic growth slowed in 2022 compared with 2021, as economic activity was affected by high commodity prices, supply-side constraints, and the impact of the COVID-19 pandemic.
• Japan's population has decreased for the 12th year in a row due to increased deaths and declining birth rates. In 2022, there were 124.49 million people, a decrease of 556,000 from the year before. This suggests that the average household size will decrease in the coming years, and it is further expected that the number of house owners will reach a saturation point.
• The Tokyo Metropolitan Government started a campaign in 2017 to encourage families to switch to LED bulbs to save energy. The campaign encouraged locals to take advantage of the energy-saving features of LED lamps. This program is expected to reduce the nation's electricity consumption and encourage the adoption of LED lighting.

OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT

Segment Analysis: Indoor Lighting

Industrial and Warehouse Segment in Japan LED Indoor Lighting Market

The industrial LED lighting and warehouse segment dominates the Japan LED indoor lighting market, accounting for approximately 69% of the market share in 2024. This significant market position is driven by Japan's sophisticated manufacturing sector, which contributed over JPY 108.1 trillion to the real GDP. The segment's growth is further supported by the Japanese government's allocation of USD 1.62 billion to support Japanese SMEs in upgrading their manufacturing plant equipment and developing digital transaction infrastructure. The expansion of warehouse facilities, particularly driven by e-commerce growth, has also contributed to this segment's dominance. In 2024, the area of class 1 to 3 regular warehouses reached a record high, with multiple industries transforming from utilizing a single facility management outsourcing model to an integrated services model that can meet all customers' core needs on a large scale.

Agricultural Lighting Segment in Japan LED Indoor Lighting Market

The agricultural lighting segment is emerging as the fastest-growing segment in the Japanese LED indoor lighting market, with a projected growth rate of approximately 3% between 2024 and 2029. This growth is primarily driven by the increasing adoption of vertical farming operations and commercial greenhouses in Japan. The country has witnessed significant advancement in automation and artificial intelligence (AI) integration in agricultural practices, particularly in vegetable vertical farming operations. The segment's growth is further supported by Japan's strategic focus on environmental conservation agriculture (ECA) as part of its carbon-neutral initiatives. The expansion of LED grow light technology, exemplified by large-scale LED plant grow factories capable of producing thousands of produce units daily, demonstrates the segment's strong growth trajectory.

Remaining Segments in Indoor Lighting

The commercial LED lighting and residential segments continue to play vital roles in shaping the Japanese LED indoor lighting market. The commercial segment, encompassing offices, retail spaces, and other commercial establishments, benefits from ongoing urban development projects and the transformation of workplace lighting requirements. The retail subsector particularly benefits from Japan's position as the world's third-largest fashion market, while the office subsector adapts to evolving workplace dynamics. The residential segment maintains steady growth through government-led energy efficiency initiatives and the continuous development of smart home integration capabilities, supported by Japan's high disposable income levels and sophisticated consumer base. The use of LED panel and LED tube light technologies is becoming increasingly prevalent in these segments.

Segment Analysis: Outdoor Lighting

Public Places Segment in Japan LED Outdoor Lighting Market

The public places segment dominates the Japan outdoor LED lighting market, commanding approximately 84% market share in 2024. This segment encompasses LED lighting installations in amusement parks, theme parks, airports, and other public venues. The segment's strong performance is driven by Japan's robust tourism infrastructure, with major attractions like Disneyland and Universal Studios implementing advanced LED lighting systems. The total revenue of Japanese amusement and theme parks reached approximately JPY 600 billion in 2024, supporting continued investment in LED lighting solutions. Additionally, as of 2024, Japan maintains nearly 100 airports, including 28 major and 54 regional airports, all requiring sophisticated lighting systems. The segment is experiencing steady growth at around 5% annually through 2029, driven by ongoing renovations of existing facilities and new infrastructure development projects aligned with Japan's smart city initiatives.

Streets and Roadways Segment in Japan LED Outdoor Lighting Market

The streets and roadways segment represents a crucial component of Japan's outdoor LED lighting market, focusing on illuminating the country's extensive road network stretching over 1.28 million kilometers. The Japanese government has implemented various smart street lighting initiatives, including projects that use LED projection to warn drivers of hazardous conditions. Local governments are actively participating in these initiatives, with cities like Osaka launching smart street lighting demonstration projects that incorporate environmental sensors and traffic monitoring capabilities. The segment is benefiting from Japan's "Road Vision 2040" plan, which emphasizes the use of digital technology for road infrastructure enhancement. Additionally, the implementation of vehicle-to-vehicle communication technology, including traffic lights that can communicate with vehicles, is driving innovation in street lighting solutions.

Remaining Segments in Outdoor Lighting

The other segments in Japan's outdoor LED lighting market include specialized applications such as architectural lighting, landscape lighting, and security lighting systems. These segments serve specific niches within the market, catering to the unique requirements of different outdoor spaces. The architectural lighting segment particularly focuses on illuminating building facades and monuments, contributing to the aesthetic appeal of Japan's urban landscapes. Security lighting applications continue to evolve with the integration of smart technologies and motion sensors, enhancing the safety features of outdoor spaces. These segments, while smaller in market share, play a vital role in creating comprehensive outdoor lighting solutions that meet Japan's diverse urban development needs.

Segment Analysis: Automotive Utility Lighting

Headlights Segment in Automotive Utility LED Lighting Market

Headlights continue to dominate the automotive utility LED lighting market in Japan, commanding approximately 47% of the total market value in 2024. The segment's strong performance is primarily driven by the Japanese government's mandate requiring automakers to manufacture vehicles with automated headlamps. The penetration of LED headlights in Japan is notably high, with full LED headlights available in almost every top 10-selling model across most variants. Leading automotive OEMs in the country are actively launching vehicles with adaptive headlight features, with Toyota occupying more than 50% of the market share and achieving over 70% penetration in the headlight segment, followed by Honda. The adoption of LED, DRLs, and laser LED headlights is expected to boost the market value in the frontal lighting segment, while the rapid adoption of advanced technologies like Matrix headlights and the incorporation of cameras and sensors in frontal lighting is projected to propel the market value with increased production for EV vehicles.

Tail Light Segment in Automotive Utility LED Lighting Market

The tail light segment is experiencing significant growth in the Japanese automotive utility LED lighting market, with a projected annual growth rate of approximately 8% between 2024 and 2029. This growth is largely attributed to the increasing adoption of advanced LED technology in vehicle safety systems. The segment's expansion is further supported by Japan's transition to environmentally friendly vehicles, particularly with the government's target of achieving 100% environmentally friendly vehicles by 2035. The implementation of new tax incentives starting in 2024 for EV purchases and the revised vehicle weight tax rules are expected to drive innovation in tail light technology. Major automotive manufacturers are incorporating sophisticated LED tail light systems with advanced features such as adaptive brightness and enhanced visibility patterns. The segment is also benefiting from the increasing focus on vehicle safety and aesthetic appeal, with manufacturers developing more energy-efficient and stylish tail light designs.

Remaining Segments in Automotive Utility Lighting

The automotive utility lighting market in Japan encompasses several other crucial segments including directional signal lights, stop lights, reverse lights, and daytime running lights (DRL). Each of these segments plays a vital role in vehicle safety and functionality. Directional signal lights are essential for indicating turning movements and lane changes, while stop lights serve as critical safety features for indicating braking. Reverse lights aid in nighttime parking and maneuvering, while DRLs enhance vehicle visibility during daytime driving. These segments are experiencing technological advancements with the integration of smart lighting systems and enhanced LED technologies. The development of these segments is closely tied to Japan's stringent automotive safety regulations and the increasing demand for energy-efficient lighting solutions in modern vehicles.

Segment Analysis: Automotive Vehicle Lighting

Passenger Cars Segment in Japan LED Automotive Vehicle Lighting Market

The passenger cars segment continues to dominate the Japan LED automotive vehicle lighting market, commanding approximately 76% market share in 2024. This significant market position is driven by Japan's robust passenger vehicle production capabilities and the high adoption rate of LED lighting technologies across various car models. Major automotive manufacturers like Toyota, Honda, and Nissan have been instrumental in driving this segment's growth through their commitment to incorporating advanced LED lighting solutions in their vehicles. The segment's strength is further reinforced by the Japanese government's push toward environmentally friendly vehicles, with initiatives including subsidies of up to JPY 800,000 for clean energy vehicles. The high penetration of LED headlights and tail lamps in almost every top-selling model, particularly in their premium variants, has helped maintain this segment's market leadership.

Two-Wheelers Segment in Japan LED Automotive Vehicle Lighting Market

The two-wheelers segment is emerging as the fastest-growing category in Japan's LED automotive vehicle lighting market. This growth is primarily driven by the increasing adoption of LED lighting solutions across various motorcycle models from major manufacturers like Honda, Yamaha, Suzuki, and Kawasaki. The segment's expansion is supported by well-developed road infrastructure and government initiatives promoting energy-efficient vehicles. The introduction of new electric scooter models, such as Honda's Commuter Model and Yamaha's innovative mid-drive electric bikes, has further accelerated the adoption of LED lighting solutions in this segment. The market is also benefiting from the relaxation of regulations allowing e-scooter riding without a driver's license, which has contributed to the booming e-scooter and e-bike markets.

Remaining Segments in Automotive Vehicle Lighting

The commercial vehicles segment represents a significant portion of the automotive vehicle lighting market, encompassing trucks, buses, and other commercial transportation vehicles. This segment has shown steady growth driven by the increasing demand for LED lighting solutions in commercial fleet vehicles. The segment benefits from the growing emphasis on vehicle safety and visibility requirements for commercial transportation. The adoption of LED lighting in commercial vehicles is particularly notable in long-haul trucks and public transportation buses, where energy efficiency and durability are crucial factors. The segment is also influenced by the government's initiatives to modernize commercial vehicle fleets and improve road safety standards.

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