Automotive Market Research Reports

Comprehensive Guide to Global Automotive Market Dynamics

Industry Overview

The global automotive market valuation is above US$3.7 trillion and will grow rapidly over the coming years due to an upsurge in demand for vehicles, especially in emerging economies. This is expected to surpass US$5.8 trillion by the end of 2030 at a CAGR of about 5.4%. This growth is supported by the movement to electric vehicles and the CASE technologies under development, in particular, in the Asia-Pacific and North American area.

Electric Vehicle valued at approximately $480 billion, the EV market is expected to reach $1.3 trillion by 2030 at a CAGR of roughly 18%. Government incentives, proliferating charging infrastructure, and consumer demand for sustainable options accelerate this shift further. The global valuation of the automotive components market was projected at US$114.9 billion in 2024, reaching US$160.3 billion and growing at a CAGR of 5.6%. Improvement in the market demand due to an increase in technologically advanced vehicle functions such as infotainment systems, enhancements in safety, and autonomous driving capabilities, added to ongoing electric vehicle component development, would drive the growth of the market. The global automotive aftermarket includes replacement parts, maintenance, and services and is valued at US$380 billion, which is projected to reach $513 billion by 2030. Growth is driven because the demand for better maintenance of vehicles, especially used and/or ageing ones, is increasing.

Led by China, the biggest market share is contributed by significant growths in both India and Japan. It has a strong underpinning of automotive manufacturing and fast penetration of electrical and autonomous vehicles. The automotive display market in the Asia-Pacific region garners the highest market share due to key markets such as China, India, and Japan. By 2024, it is estimated that the Asia-Pacific automotive market will be valued at about $1.8 trillion, while from 2024 to 2031, the market is expected to exhibit a compound annual growth rate of roughly 4.5% to 5%.

Details for top 10 countries

China

In the year 2023, China holds the leading position in the global automotive market, with a revenue forecasted at approximately USD 750.7 billion by 2023. They are still the most powerful and influential country within the Asia-Pacific automotive sector, benefiting substantially from the strong base in automotive manufacturing into which they have invested, and also significant adoption rates of EVs. While the country has managed to position itself as an automotive powerhouse, government policies and incentives are two other mainstays of this expansion. The incentives have serviced investment in EV technology and enabled the rapid development of the production facilities, commanding China's leadership position in the global EV market.

United States

With the projection for a market size of USD 547.6 billion in 2023, at a CAGR of 7.4%, the United States continues to be on top in the global automotive industry market in 2023. The U.S. market is also seeing an increasing emphasis on electric and hybrid vehicles due to environmental concerns and increased fuel efficiency demand. While internal combustion engines remain dominant for the time being, the growth of the EV segment is gradually changing this, with major automakers like Tesla expanding their range of EVs and companies like Ford and General Motors investing heavily in electric mobility.

India

The Indian automotive market is anticipated to reach approximately USD 308.5 billion in 2023. Increasing income, growing vehicle manufacturing, and extending logistical industries are some of the key growth factors. Besides, the swelling working population and vehicle penetration across the nation are supplementing the demand. The Government of India is providing specific incentives to support this market, especially for electric vehicles, which are gaining traction in the country. Other driving factors include an advancement in manufacturing technologies and a shift to the production of eco-friendly cars.

Germany

The Germany automotive market was valued at $ 291.0 billion in 2023 and is still growing at a CAGR of 7.1 %. Majorly this growth is influenced by the increasing transition towards electric vehicles. With significant declines in EV registrations due to the reduction of government incentives, especially for BEVs, the German market remains set towards transition to more sustainable mobility. Many continue to think that Germany is falling behind, particularly compared to China in terms of EV adoption, also considering China's leading position in terms of production and technology development. German carmakers are only now trying to play catch-up, and most question marks revolve around whether they can fulfill ambitious government targets for electric vehicle penetration.

Japan

Japan represents a leading position in the automotive market worldwide, with a projected market size of approximately USD 257.0 billion, accounting for about 7.3% of the market share by 2023. The automotive industry is anticipated to show steady growth over the coming years, majorly impelled by several factors: innovation potential, robust domestic manufacturing, and export capabilities. The market remains particularly conscious of the electric vehicle and hybrid technologies developments, while major producers like Toyota, Nissan, and Honda have already taken the lead. Besides, Japan's orientation toward state-of-the-art automotive technologies, including autonomous and electric vehicles elaboration, is foreseen to drive further growth.

South Korea

The South Korean position in the global automotive market comes to about 253.7 billion USD in 2023, which grows with a CAGR of 6.5% during the forecast period. Various factors have contributed to this boom in South Korea's automotive market. Among them, increasing consumer awareness, government incentives, and rich improvements in battery technology have driven the growing demand for electric vehicles. The strong infrastructure of electric vehicle charging in South Korea and an increasing focus on sustainability complemented the adaptation of electric vehicles. It is also leading in autonomous and connected vehicle technologies with major automakers and tech companies investing hugely in R&D-research and development-in those areas.

France

France's automotive market is valued at $231.3 billion in the year 2023, exhibiting a CAGR of 6.1%. Increased adoption of electric vehicles in the French automotive sector is one of the major trends witnessed in the region. The government has also been highly instrumental; it provided incentives in the form of monetary gains for purchasing EVs and building charging infrastructure. This, along with ever-growing environmental concerns, has, until very recently, made EVs increasingly popular with consumers and businesses. Electric cars have been at the heart of the evolving state of France's car market. The adoption of electric vehicles is expected to leap well, as consumer demand for friendlier alternatives continues unabated, as does the implementation of very strict emissions laws. Government subsidies and incentives have been key in provoking sales. Additionally, the French government is greatly investing in extending charging infrastructure, thereby making EVs more accessible. Recent reports from the market show that EVs keep taking up an increasing share of new vehicle sales and that more buyers are shifting to green alternatives.

United Kingdom

The value of the automotive market in the United Kingdom is approximately about USD 169.7 billion in 2023. The UK automotive sector is considered one of the most important within the manufacturing economy and export contributions. With ongoing global headwinds, the market share in automotive production is healthy, considering the UK's position in manufacturing volumes, especially for electric vehicles. The UK is considered a huge hub for manufacturing, primarily in electric vehicles, with increasing thought toward greener, sustainable technologies that emit lower carbon. It also boasts solid international trade links, especially with Europe, as well as other global markets. Consumer demand for greener and more sustainable vehicles continues to grow. With electric and hybrid cars the future of the market, car manufacturers in the UK invest accordingly in EV production and infrastructure. The drive for connected and autonomous vehicle innovation remains yet another pathway to new growth opportunities for the sector.

Canada

Canada has a high stake in the automotive market globally, with an estimated market size of approximately USD 207.5 billion in 2023. Over the previous decade, the automotive industry in Canada has posted records of growth due to different causative factors influencing the market positively. Some of these significant causative factors identified include increasing demand for vehicles and strong exports. The market is highly competitive and includes foreign manufacturers such as Honda, Stellantis, and Ford, among others. The highly integrated Canadian automotive sector benefits from its strong integration with the U.S. market and substantial investments in EV infrastructure and manufacturing. Supportive policies and incentives of the government are mainly focused on accelerating EV adoption, such as electric vehicle purchase rebates.

Australia

The valuation of the automotive market in Australia, therefore, is for 156.3 billion in 2023. Buoyed by surging consumer demand, higher production capacities, and large increases in technological advances, the current growth in Australia's automotive industry does indeed appear very strong. The recovery from COVID-19 further supports these factors, which have consequently encouraged the sale of vehicles in both the passenger and commercial vehicle sectors. Favorable government policies, along with infrastructural development in the form of EV charging stations, have also contributed toward increasing this market. Further, Australia's geographical location, supported by a favorable business environment and highly skilled labor, bodes well for its automotive market. The local production of vehicles, particularly those targeted at the middle-income segment, has picked up significantly, and automakers have further invested in the space. This could be expected to maintain the growth momentum going forward on the back of an increase in disposable incomes and consumer confidence.

PESTEL Analysis

Political

Political factors that drive the industry include government policies on trade and taxation, subsidies, and regulation. Policies favouring EVs coupled with strict emission standards drove manufacturers to innovative thinking for greener solutions. The trade agreements or tariffs can be imposed between countries, thereby raising the cost or limiting the availability of automotive parts and vehicles. Political instability, or sudden changes of heads in such places, may cause interruptions in the supply chain or changes in regulations, affecting vehicle manufacturing and sales.

Economic

The economic setting indirectly but fundamentally impacts the nature of the automotive industry. Aspects concerning inflation, interest rates, and economic growth have strong affiliations with consumer purchasing power. During a general decline in the economy, consumers could be reluctant to buy expensive or luxury cars but could be more open to inexpensive ones. However, unstable fuel prices could impact their preference, especially for fuel-efficient or electric vehicles. The global supply chain, in particular for commodities like steel and semiconductor chips, influences production cost and feasibility.

Social

The social trends are becoming pivotal with regard to the automotive industry. More and more, there is a preference of the consumers for eco-friendly and sustainable cars, such as electric and hybrid vehicles, because they are embracing green technologies as well. The demand is also skyrocketing for autonomous driving technology as consumers are becoming safety- and convenience-oriented. In addition, urbanization and changes in lifestyles, such as shared mobility over ownership, have their impact on how automobile firms adapt their products and services, with wide acceptance car-sharing and subscription models.

Technological

There is rapid technological advancement in the automotive industry, especially in the rise of electric vehicles, autonomous driving, and connectivity features. These include advanced driver-assistance systems, AI, and powertrain electrification. Innovation in lightweight material development, efficient batteries, and manufacturing process innovations play an important role in shaping the future roadmap for the industry. Digitalization is one of the vital factors in the operations of automobile manufacturers, right from manufacturing automation to marketing and after-sales services.

Environmental

The drivers of environmental sustainability have turned out to be very significant in the automotive industry. Due to tight emitting norms at both national and international levels, manufacturers are now seriously looking at going green through electric vehicles and hydrogen fuel cell vehicles. The growing alarm for climate change, air pollution, and the reduction of resources have accelerated the shift towards alternative fuels and renewable sources of energy. Moreover, there is growing pressure on the automotive industry to reduce its carbon footprint not only in the vehicles they make but in its extended supply chain, manufacturing, and logistics operations.

Legal

The automotive industry functions within a multi-dimensional legal framework that covers safety standards to emission norms to intellectual property rights. Vehicle safety regulations, such as crash-test standards and airbag requirements, vary by country, and manufacturers must comply with these regulations to ensure their products are market-ready. Intellectual property rights are also vital as automakers increasingly rely on proprietary technologies, such as autonomous driving systems or innovative powertrains. Legal questions related to data privacy and cybersecurity do increasingly emerge with the embedding of connected technologies and smart features within the vehicle itself.

Major companies and their details

Volkswagen Group

Headquartered in Wolfsburg, Germany, Volkswagen Group is the world's one of the biggest car manufacturers, with revenues reaching $355.7 billion in the fiscal year 2023. The company derives significant revenues from its highly diversified automotive portfolio comprising renowned brands such as Volkswagen, Audi, and Porsche. Volkswagen especially enjoys the reputation for producing mid-volume, affordable automobiles, whereas Audi is known for offering a broad lineup of sedans, SUVs, and sports cars in the luxury category. Apart from this, Porsche is well recognized for high-performance cars and gives the company a premium category. A substantial part of Volkswagen's revenue growth comes from the increasingly large stake the company is placing in electric vehicles. The company has been expanding its electric car lineup with models like ID.4 and ID. Buzz lineups while positioning to be one of the leaders to drive the transition to sustainable mobility. Porsche's contributions through its lineup of luxury EVs, such as the Taycan, don't hurt the group's cause in the growing EV market either. Additionally, Volkswagen's continued efforts in hybrid technology and some future EV launches make the company a key driver in the electrification of the automotive industry.

Toyota Motor Corporation

It is one of the world's largest car manufacturers, reaching revenues of $263.3 billion in the year 2023. The company is highly regarded to offer a diverse product line of vehicles, from compact sedans to much larger trucks and SUVs. Arguably, its two most iconic models are the fuel-economical hybrid car called the Toyota Prius and the Tacoma, a very popular midsize truck in many global markets. Early and continuing focus on hybrid technology has indeed been a major contributor to Toyota's success; Prius was one of the first mass-produced hybrid cars worldwide. Over time, the company grew its hybrid portfolio in different segments, embedding environmentally friendly technologies into its mainstream and luxury lines of vehicles. Further, Toyota has invested hugely in hydrogen technology, especially in the line of its cars up to date, such as the Toyota Mirai, which is leading in fuel cell technology. As a company, it remains committed to diversity in the way it addresses sustainable mobility, putting together hybrid and hydrogen powertrains as part of the efforts toward meeting future emissions standards and growing consumer demand for eco-friendly options.

Mercedes-Benz Group

The company’s Headquartered in Germany, Mercedes-Benz Group is one of the most well-acknowledged leaders in the global automotive market. The group generated revenues of approximately $153.9 billion in 2023. The largest contributor to this stream of revenue generated by the group is its core business segment: the manufacture of luxury cars, SUVs, and performance cars with the legendary brand name of Mercedes-Benz. The Mercedes-Benz S-Class and the GLE SUV are examples of models anchoring the brand in the luxury automobile market. These vehicles are famous for their advanced technology, safety, and premium design, and hence attract the premium consumers of different parts of the world. Other than traditional luxury cars, Mercedes-Benz has been one of the serious players in the EV car market. The company's EQ lineup, including models such as the EQC and the EQS, is increasingly contributing to revenue. Mercedes-Benz is positioning itself as a forerunner in the luxury electric segment, placing an emphasis on sustainable and high-performance EVs. The company has been working to expand its EV production capacity as part of its strategic push toward a carbon-neutral future.

Ford Motor Company

Ford Motor Company is among the major automobile manufacturers worldwide. It generated revenues of $151.7 billion for 2023. Most of the revenue stream has been brought in by its solid line of automobiles; among them, the Ford F-Series trucks have been one of the biggest hot-selling items and a cornerstone to Ford financially for years. The F-Series, of which the Ford F-150 is part, has long been one of the top-selling vehicles in the United States, quite appealing to personal and commercial markets alike, because of its performance, robustness, and general utility. Beyond their dominance in truck sales, Ford brings in revenue with a diverse lineup of SUVs and crossovers, like the Ford Explorer and the Ford Escape, to meet the growing demand for family vehicles that are more versatile. The company has placed considerable emphasis on innovation as well, with its electric vehicle segment emerging as a key growth area. The Mustang Mach-E is one of the flagships of Ford's electrification strategy, besides the all-electric Ford F-150 Lightning truck. This is indicative of Ford's continuing commitment to sustainability and competitive positioning in the rapidly evolving EV market.

BMW Group

In 2023, BMW Group generated a revenue of about $139.8 billion, stating its position as one of the largest manufacturers of luxury automobiles worldwide. The major driving factor behind BMW revenue includes leading sedans, SUVs, and high-performance sports cars. The BMW 3 Series, 5 Series, and X5 comprise the top-selling models responsible for giving huge share in the market of premium brands. Another reason for such success is due to the commitment to sustainable mobility, highly supported by electric and hybrid models. Its EVs, like BMW i3 and i8, have already helped place the company in the frontrunners' position within the electrification of the luxury vehicle market. But along with this regular line of luxury cars, BMW continues to invest hugely in developing fully electric models, as part of the firm's strategy in line with environment-friendly automotive solutions. The electric car offerings of the company are part of the large "i" series, including also the i4, iX3, and iX. These new models have gained attention because of their mix of high performance, luxurious features, and friendly-to-nature technology. Besides conventional internal combustion engine cars, this development propels the company into electric mobility and sustainability, thus enabling BMW to reach a wider base of consumers, from conservative high-end car buyers to those seeking a greener alternative.

Recent developments

The new BMW 5 Series Sedan and BMW i5 - developed and built exclusively in China - will come onto Chinese roads from January 2024, which is just a few weeks after their appearance at the Auto Guangzhou 2023 motor show. For the first time, both efficient combustion engines of the latest model and all-electric drive options have been represented in China.

In March 2022, Ford announced its plans for Europe's significant all-electric future movement. This aims to launch three new electric passenger vehicles and four new electric commercial vehicles in the region by 2024. Additionally, it intends to sell more than 600,000 electric vehicles across Europe by 2026.

This center airbag is a safety feature installed between the front seat occupants to decrease head contact in case of a side collision, compared to its predecessors. First launched in October 2022, the refreshed Volkswagen Golf model now boasts a new standard lap belt tensioner for the front seats, further improving overall safety.

Conclusion

The automotive industry market presently goes through a metamorphic phase driven by technological development, changing consumer preference, and shaping environmental policy. Traditional ICEs are increasingly being replaced by EVs, with EVs gaining momentum as environmentally friendly alternatives to traditional ICE-powered vehicles, through government incentives and improvement in battery technology. Thus, the transformation is creating an increasing demand for EVs both in developed and emerging markets, while leading automakers are massively investing in the development and production of EVs. Besides the electrification of vehicles, the automotive industry is currently facing a trend toward sustainability with the use of alternative fuels, lightweight materials, and sustainable manufacturing practices. Sustainability is now at the very heart of automakers' attention, driven by growing consumer and regulatory pressure to reduce carbon emissions because of environmental and climate change concerns.