Passenger Cars Industry Earning Revenues of Around USD 2,675.92 Billion By 2032

Published Date : 24 Apr 2023

The passenger cars industry size was worth USD 1,549.22 billion in the year 2022. The industry is projected to grow at a CAGR of 5.62%, earning revenues of around USD 2,675.92 billion by the end of 2032.

The passenger cars industry growth is driven by the increasing disposable income of the population, the growing adoption of advanced technologies, increasing government initiatives and rapid growth in the automotive sector.

A passenger car is defined as a vehicle designed and constructed for the carriage of persons and comprising not more than eight seats in addition to the driver's seat, and having a maximum mass not exceeding 3.5 tons. Automobiles come in a wide variety of styles, including sports, prestige, family-friendly, compact, and sport utility vehicles. In developed nations, cars for passengers are one of the most popular forms of transportation. The adoption of cutting-edge technologies, like advanced driver assistance systems (ADAS), has dramatically increased in recent years across passenger cars. 3.87 million passenger cars in China had ADAS in the first eight months of 2021. L2 ADAS installations rose by 43.2% annually in 2021. (Y-o-Y).

Report Highlights:

  • By fuel type, the electric segment is expected to grow at the fastest rate during the forecast period. One of the most popular methods for lowering air pollution is electric vehicles (EVs). To encourage the adoption of electric cars, governments all over the world are offering subsidies on their purchase. For instance, the Canadian government offers buyers of battery electric and plug-in hybrid electric cars a subsidy of up to USD 3,700. Due to rising fuel costs, the use of electric vehicles has increased in several nations. In place of gasoline and diesel engines, electric cars use lithium-ion batteries that provide a hybrid charging system. The goal of many ride-hailing businesses is to replace their fleet of internal combustion engines with electric vehicles. By the end of 2021, Uber India, for instance, wants to have about 3,000 electric cars in its fleet. Thus, this is expected to drive segmental growth over the forecast period.

Passenger Cars Industry Report Scope:

Report Coverage Details
Market Size in 2022 USD 1,549.22 Billion
Projected Forecast Value in 2032 USD 2,675.92 Billion
Growth Rate from 2023 to 2032 CAGR of 5.62%
Largest Market Asia Pacific
Base Year 2022
Forecast Period 2023 to 2032
Regions Covered North America, Europe, Asia-Pacific, Latin America and Middle East & Africa

Regional Insights:

The Asia Pacific is expected to dominate the largest industry share during the forecast period. The regional growth is attributed to the growing disposable income of the population and the increasing automotive industry, especially in the countries like China and India. For instance, according to the India Brand Equity Foundation (IBEF), the industry for passenger cars in India was valued at US$ 32.70 billion in 2021, and by 2027, it is anticipated to have grown to US$ 54.84 billion, with a CAGR of over 9%. By 2025, it is predicted that India's electric vehicle (EV) industry will be worth Rs. 50,000 crores (US$ 7.09 billion). According to a CEEW Centre for Energy Finance study, India could see a US$206 billion industry for electric cars by 2030. This will require investing US$ 180 billion in infrastructure for car production.

In addition, the growing investment from several manufacturers will be anticipated to drive industry growth during the forecast period. For instance, Maruti Suzuki India stated in November 2022 that it intended to spend close to Rs. 7,000 crores (US$ 865.12 million) on several projects this year, including the construction of its new plant in Haryana and the launch of new models. Besides, China is the largest country in the world for the production of the passenger. According to the China Association of Automobile Manufacturers, from 1397000 units in January 2023, China's car production rose to 1715000 units in February. Thus, these facts support the industry growth in the region over the forecast period.

Europe is expected to grow at a significant rate during the forecast period owing to the massive demand for passenger cars in Germany, the United Kingdom and others. With a strong final surge, the German passenger car industry finished the year 2022. 314,300 new passenger vehicles were registered in December. In comparison to the same month last year, this represented an increase of 38%. Thus, the passenger car industry began to improve just before the year came to a close, and it finished 2022 with a modest growth rate of 1%. 2.65 million brand-new passenger cars entered the road. 

Additionally, the growing demand for electric vehicles along with the increasing support from government bodies is expected to flourish the industry expansion. Only electric vehicles can be held responsible for the industry's robust development in December. 174,000 all-electric and plug-in hybrid vehicles were newly registered in the final month of 2022, an increase of 114%. For the first time, electric vehicles made up more than half of all new automobiles sold in a single month. (55 percent). There was, as anticipated, a significant rush at registration offices in December because of the impending reduction in the environmental bonus for all-electric vehicles and the total elimination of plug-in hybrids.

Market Dynamics:


Increasing EV subsidies and emission standards

The demand for zero-emission passenger vehicles is increasing as a result of strict CO2 emission standards. To promote the sale of electric passenger cars, governments are providing a variety of incentives and subsidies. According to the International Council on clean transportation, compared to comparable internal combustion engines (ICEs) registered in the same year, an EV registered in India in 2021 was expected to emit 34% less carbon dioxide equivalent (CO2e) throughout its working life. Electric passenger cars, which emit no emissions, are also growing in popularity for eco-friendly public transportation all over the globe. Thus, this is expected to drive the growth of the industry during the forecast period.


The high price of SUVs

SUVs have many advantages over sedans and hatchbacks, which is why more consumers are shifting towards this vehicle type. However, despite having many advantages and benefits, SUVs are more expensive than small and mid-size cars, especially full-size SUVs. The cost of mid-size SUVs is in the middle, making them unaffordable for many people in Asia and Africa who live in emerging nations. 


Increasing charging infrastructure for EV

The increasing electric vehicle charging infrastructure is expected to provide a lucrative opportunity for industry expansion over the forecast period. The growth in the charging infrastructure is primarily driven by the significant investment by private and government support in the various region including Asia and the Middle East. For instance, over the next five years, Tata Motors will invest more than $2 billion in its electric vehicle (EV) company after raising money from private equity firm TPG. The company will make investments in brand-new models, specialized platforms for battery electric vehicles, infrastructure for charging, and battery technologies.

Recent Developments:

  • In April 2020, a contract was signed by BYD Company Ltd. and TOYOTA MOTOR CORPORATION to create BYD TOYOTA EV TECHNOLOGY CO., LTD. The recently established business carries out BEV research and development.
  • In October 2022, BYD Auto Co., Ltd. introduced the Atto 3, an electric sport-utility vehicle, as part of its entry into the Indian passenger car industry. (SUV). According to BYD Auto Co., Ltd., 340 Atto 3 electric sport-utility vehicles were shipped in January 2023. The top EV manufacturer in the world has set a goal of selling 15,000 electric SUVs in India with current 24 dealership showrooms with partners and further targets to capture 40% of India's EV industry by 2030.

Major Key Players:

  • General Motors
  • Volkswagen
  • Toyota
  • Hyundai
  • Ford
  • Nissan
  • Peugeot S.A.
  • Tesla
  • Honda
  • Mercedes
  • Audi
  • TATA Motors
  • Kia Motors
  • Renault
  • Suzuki Motor Corporation

Market Segmentation:

By Fuel Type

  • Petrol
  • Diesel
  • Hybrid
  • Electric

By Vehicle Type

  • Hatchback
  • Sedan
  • Compact-SUV
  • SUV

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