The global passenger vehicles market size was accounted at USD 1.74 trillion in 2022 and is projected to hit around USD 3.44 trillion by 2032, growing at a CAGR of 7.06% during the forecast period from 2023 to 2032.
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In developed nations, passenger vehicles are the most used mode of transportation. A lot of cutting-edge technologies, such as the advanced driver assistance system (ADAS), have been adopted recently. The demand for passenger cars is being fueled by the adoption of electric vehicles. The number of passenger cars is rising in developing nations in tandem with the rise in per capita income. Because a nation's passenger automobile market heavily depends on its present economic situation, the sector suffered during the recession in the US and Europe. In order to keep up production in a weak economy, many passenger car manufacturers, notably General Motors, Ford, and Chrysler have had to apply for sizable loans. One of the major worries in the passenger automobile sector is the increase in raw material prices. Recently, the cost of steel and plastic has increased significantly, which has raised the price of passenger automobiles for consumers. The passenger automobile market heavily relies on R&D, and in order for it to compete, its goods must satisfy real-time consumer demands.
Report Scope of the Passenger Vehicles Market:
|Market Size in 2023
|USD 1.86 Trillion
|Market Size by 2032
|USD 3.44 Trillion
|Growth Rate from 2023 to 2032
|CAGR of 7.06%
|Fastest Growing Market
|2023 to 2032
|By Type, By Body, By Application and By Fuel Type
|North America, Europe, Asia-Pacific, Latin America and Middle East & Africa
High demand for passenger vehicles
The primary factors propelling the market's expansion are the rise in demand for passenger vehicles brought on by the surge in the population of middle-income groups and the rising quality of living in emerging nations. The availability of affordable alternatives in these vehicles is another factor influencing consumer preference for them. The market's demand for passenger vehicles is anticipated to increase as a result of the growing logistics and passenger transportation sectors.
The development of the passenger car sector is significantly influenced by government policies and regulations. In the future years, it is anticipated that these initiatives and norms will both expand and stay the same. Market expansion would be aided by the availability of better prices and more options, as well as by the booming urban population. Additionally, it is projected that increasing disposable income and an increase in population growth will benefit the passenger vehicle industry in the next years. Due to the expanding global popularity of leisure and travel-related activities, there has been a surge in the demand for Special Utility Vehicles (SUVs).
Insufficient EV charging station
Over the past ten years, scientific improvements and the mass manufacture of electric vehicle batteries have led to a decrease in the price of EV batteries. As EV batteries are one of the most expensive parts of the car, this has resulted in a fall in the price of EVs. A typical EV battery cost about USD 1,100 per kWh in 2010. However, by 2020, the cost had decreased to around USD 137 per kWh, and by 2021, it had fallen all the way to USD 120. In China's electric vehicle business, these batteries can be purchased for as little as $100 per kWh. This is brought on by the declining costs of making these batteries, the lower cost of cathode materials, increased production, etc. By 2030, the cost of EV batteries is anticipated to drop to around USD 60 per kWh, which would result in a huge decrease in the cost of EVs, making them more affordable than traditional ICE vehicles.
Market expansion is accelerated by the rise in technological developments, such as the incorporation of all-EV charging station systems with Internet of Things (IoT) and real-time information solutions. The technologies find nearby charging stations and offer real-time data on the number of open places. The market's expansion is accelerated by the rise in demand for heavy and upscale vehicles as well as an increase in cars powered by diesel engines. Additionally, a rise in passenger car sales brought on by consumer desire for affordable vehicles aids in market expansion. Moreover, the market for passenger automobiles benefits from the expansion of the automotive industry, a rise in investments, and rising disposable income.
Impact of COVID-19:
The pandemic of COVID-19 affected the domestic production of passenger cars owing to the shutdown of manufacturing facilities during lockdowns. With the stringent social distancing norms and nationwide lockdowns, the production units of different OEMs were completely shut down, and the raw material transport was halted, directly or indirectly affecting thousands of dependent workers and the entire industry. Since the movement of people was reduced, the requirement for an automobile was reduced exponentially. Also, due to job loss or salary cuts, the buying power of the end user also decreased substantially.
In Ireland, the car market declined by 18% due to the uncertainty prompted by the COVID-19 pandemic. As per the data from the United Nations World Tourism Organization (UNWTO), international tourist arrivals all over the world in 2021 were around 421 million, 4.6% more than that of 2020 but lower by 71.3% as compared to 2019. Reduction in the number of tourists reduced the requirement for commercial passenger vehicles. As per the Society of Indian Automobile Manufacturers, the automobile sector in India witnessed negative growth in sales of all vehicle categories in FY21 with a 20.77% fall in sales of commercial passenger vehicles. From the second quarter of 2022, the demand for passenger vehicles started rising as the economy began to open.
Fuel Type Insights:
the global passenger car market is segmented into petrol, diesel, hybrid, and electric. The electric segment is estimated to dominate the market during the study period. In integration with the private sector and in cooperation with related government agencies, Saudi Arabia’s Ministry of Energy disclosed the regulations for the rollout of electric vehicle charging stations in the country in August 2022. The development of charging infrastructure in numerous countries is fuelling the demand for passenger electric vehicles. As of July 2022, 40% of all new passenger vehicles registered in the European Union (EU) were running on petrol, while diesel accounted for 19.6% of total registrations. By July 2022, 18% of new passenger vehicles in the European Union were electrically-chargeable (9.1% battery electric and 8.9% plug-in hybrids), while hybrids accounted for 19.6% of total vehicle sales. Petrol and diesel-powered vehicles are anticipated to be replaced with hybrid and electric vehicles in the coming years.
The passenger market is segmented into hatchbacks, sedan, compact SUV, and SUVs. The compact-SUV segment is anticipated to dominate the market during the forecast period. Powerful engines and high ground clearance are the crucial factors that are supporting the compact-SUV segment over the forecast period. According to International Energy Agency (IEA), global SUV sales grew considerably by over 10% between 2020 and 2021, accounting for over 45% of all new vehicle sales globally. The demand for electric SUVs is growing significantly in Canada. The Hyundai Kona electric, Canada's first subcompact electric SUV was launched in 2021. Owing to an outstanding all-electric range of up to 415 km, this compact SUV is proposed to be a preferred choice for both longer adventures as well as daily commutes.
The passenger vehicle industry is divided into four geographic segments: North America, Europe, Asia Pacific, and the rest of the globe. The region with the largest market share worldwide is anticipated to grow further as a result of the automotive industry's quick adoption of cutting-edge technologies.
The major contributors to the global automobile market are both developing and developed nations including India, China, Japan, and South Korea. Additionally, the demand for and sales of passenger automobiles have been rising as a result of the rapid urbanisation of cities in nations like India, China, and the ASEAN nations. Demand for passenger automobiles is rising as consumers' disposable income rises. The second-largest share was registered by the European region. The expansion of electric vehicle charging infrastructure is assisting in maintaining the second-largest market share. The passenger automobile market in this region is growing as a result of the presence of significant key players there and the increasing use of cutting-edge technologies. The passenger automobile market is expected to develop moderately in North America.
Key Market Players
Segments Covered in the Report:
By Fuel Type
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