Ottawa, March 13, 2023 (GLOBE NEWSWIRE) — The passenger cars market size was accounted for USD 1,549.22 billion in 2022. Passenger cars have gained immense popularity among drivers over the past few years due to the features such as stylish design, compact size, and economic value. Passenger cars are the most common mode of transportation in numerous advanced countries. These cars are increasing in count in emerging countries due to the rising purchasing power of the people.
The rise in the demand for passenger cars is majorly due to the increasing middle-class population and enhancing standard of living in emerging countries. Consumers are also getting inclined toward these vehicles due to the availability of various finance options from banks and financial institutes. Furthermore, a rise in the demand for Sport Utility Vehicles (SUVs) creates profitable opportunities for the market players and acts as a major driving factor for the passenger car market growth across the globe.
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In 2020, around 1.9 million passenger cars were produced in the United States. As per the International Trade Administration (U.S. Department of Commerce), Mexico is the 7th biggest passenger vehicle manufacturer across the world. Mexico manufactures around 3 million vehicles every year. 90% of vehicles manufactured in Mexico are exported, with 76% destined for the United States. Thus, such high production of passenger vehicles is further driving the passenger car market growth during the forecast period of 2023 to 2030.
According to the CEIC Data, the sale of passenger cars in the United Kingdom was reported to be 1,647,181 units in December 2021. This figure is a substantial rise from the previous figure of 909,973 units sold in June 2021. Owing to the pandemic of COVID-19, overall vehicle sales in the US declined by almost 12% in 2020; however, the sales of electric vehicles have been less volatile. The interest in EVs has observed promising growth because of the active involvement in 2021 model releases. For instance, in 2022, General Motors’ hummer EV sold out pre-orders in about 10 minutes. Thus, the demand for fuel-efficient passenger vehicles is growing drastically.
Regional Snapshots
North America and Europe are among the most significant regions in the global passenger car market. The regions are highly focused to increase the battery-powered fleet and decrease the harmful gas emission. Being the center for numerous technological giants, the regions are investing notably by arranging loans and providing required benefits to EV startups as well as established manufacturers.
As of 2019, over 1.1 billion young people aged between 15 and 29 were present in the Asia and Pacific region. Along with the presence of the young population, the tendency of having a personal passenger vehicle is increasing considerably. This tendency is propelling market growth in the APAC region.
Due to low literacy and civil war in African countries, the adoption of passenger vehicles in the Africa region is expected to grow at a comparatively slow rate. With the increasing adoption of electric vehicles and substantial growth in the required infrastructure, the count of electric vehicle charging stations is expected to grow substantially in the Middle East region in upcoming years. The rise in the electric vehicle charging stations infrastructure is estimated to support the manufacturing of new passenger electric vehicles in the Middle East region.
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Scope of the report
| Report Coverage | Details |
| Market Size in 2032 | USD 2,675.92 billion |
| Fastest Growing Region | Asia Pacific |
| By Fuel |
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| By Vehicle |
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| By Region |
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| Key Players | General Motors, Toyota, Hyundai, Volkswagen, Nissan, Peugeot S.A., Tesla, Honda, Ford, Mercedes, Audi, TATA Motors, Kia Motors, Renault, Suzuki Motor Corporation and Others |
Market Dynamics:
Driver: Increasing emission norms and rising incentives for EVs
Stringent CO2 emission norms are enhancing the demand for zero-emission passenger cars. Governments are offering various incentives and subsidies to encourage the sale of electric passenger vehicles. As per International Council on Clean Transportation, an EV registered in India in 2021 was anticipated to have 34% lesser carbon dioxide equivalent (CO2e) emissions over its operational life as compared to relative internal combustion engines (ICEs) registered in the same year. Due to zero-emission, electric passenger vehicles are also becoming more and more popular for eco-friendly public transportation all over the world.
The United States Government is setting strategies to ensure that a minimum 50% of new cars sold in the country by 2030 are zero-emission vehicles. To reach the climate neutrality goal by 2050, the European Union (EU) is taking all the required actions to reduce emissions from cars. As per the proposal all new cars and vans sold in the EU as of 2035 should be zero emission. With a goal to reach net zero carbon emissions by 2060, Saudi Arabia is aiming for at least 30% of its cars to be electric powered by the end of 2030. Such initiatives boost the production of electric passenger vehicles in the LAMEA region.
In South Africa, the incentives amount to $5,306.12 (R80,000) for BEVs, $1,326.49 (R20,000) for HEVs, and $2,652.93 (R40,000) for plug-in hybrid electric vehicles (PHEVs). The government in Saudi Arabia has signed an agreement to purchase 100,000 electric vehicles over a period of 10 years from Lucid Group Inc, an EV manufacturer that the nation’s sovereign wealth fund has a stake in. The financing and incentives involved in this agreement are around $3.4 billion. In August 2022, France was planning to offer a new electric vehicle subsidy that will enable people to lease an EV for €100 ($100.14) per month. Under a subsidy program that is similar to the one introduced by the US Inflation Reduction Act, car buyers in France can get subsidies up to € 6000 ($7,369.44) for electric vehicles that cost less than € 47,000 ($57,727.3).
Restraint: High price of SUVs
SUVs provide numerous benefits over sedan and hatchback cars, and buyers are getting more inclined towards this vehicle segment. However, along with various advantages and benefits, SUVs also come with heavy price tags as compared to small & mid-size vehicles, particularly full-size SUVs. The mid-size SUVs are in the mid-range in terms of price and many people in the developing countries of Asia and Africa are unable to afford these mid-size SUVs.
Many of these full-size SUVs are categorized under the premium and ultra-premium segments and involve heated front seats, improved infotainment touchscreen system, parking assistance, powerful air conditioners for the third row, driver assistance features, and intelligent alerts. In order to sustain competition, OEMs have to adopt these advanced features, which ultimately raises the overall cost of the SUV. Hence, the high price of SUVs is expected to restrain the market growth to a considerable extent.
Opportunity: Growing infrastructure for EV charging
Asia Pacific is projected as the most lucrative region for the passenger car market during the forecast period. In September 2019, it was reported that the South Korean government will be providing around $900 million dollars in subsidies for e-mobility. Out of the total amount, ₩ 738.2 billion ($609 million) is planned to be utilized for the development of EV charging infrastructure in the country. Similarly, in June 2020, Tata Power announced its plan to extend the EV charging network in India to more than 700 stations by the end of the year 2021.
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 (EV) charging stations in the country in August 2022.
As of September 2022, Qatar General Electricity and Water Corporation (Kahramaa) successfully installed 30 fast electric car charging stations in the nation. Kahramaa plans to expand the fast-charging stations network to 600 – 1,000 stations by 2025. Infinity-E and the Egyptian government has planned to set up 6000 new EV charging stations across Egypt through a scheme worth EGP 450 million ($28.5 million).
Key Developments in the Marketplace:
- In March 2021, it was reported that the Luxury British carmaker Aston Martin will be making its fully-electric cars in Britain from 2025, in order to enhance the country’s beleaguered auto sector. Canadian billionaire Lawrence Stroll stated that a battery-powered sport utility vehicle and fully-electric sports cars will be manufactured at Aston plants in Wales and England.
- In August 2022, according to a report from Drive, it was reported that Volkswagen Australia is planning to launch a range of new electric vehicles. ID.4 and ID.5 are expected to be launched in Australia at the end of the current year (2023), followed by ID.3 launch in 2024.
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