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Passenger Vehicles Market Size to Surpass USD 3.44 Trillion by 2032

The passenger vehicles market size reached USD 1.74 trillion in 2022 and is estimated to surpass around USD 3.44 trillion by 2032, expanding at a CAGR of 7.06% from 2023 to 2032.

/EIN News/ -- Ottawa, Dec. 04, 2023 (GLOBE NEWSWIRE) -- The global passenger vehicles market size accounted for USD 1.86 trillion in 2023 and is anticipated to hit around USD 2.81 trillion by 2029, According to Precedence Research. North America led the global market and is predicted to maintain its dominance during the forecast period.

The demand for passenger automobiles is rising significantly as a result of an increased presence of foreign automakers and improving customer access to new vehicles. According to estimates, the sale of passenger automobiles in India climbed by more than 8% in January 2023 compared to December 2022. In December 2022, it is projected that over 276,000 passenger cars will be sent from manufacturing to dealerships in India. Compared to the 255,000 passenger car units delivered in 2021, this number represents a significant increase. Passenger cars were discovered to be responsible for 45% of the world's greenhouse gas emissions as of July 2022, which had a negative impact on major cities' air quality.

Switching to electric vehicle batteries (EVB) from diesel and gasoline-powered automobiles is a viable approach to decarbonize passenger transport globally. During the research period, it is projected that demand for and sales of passenger electric cars (EVs) will expand rapidly due to the growing emphasis on lowering exhaust emissions and improving fuel efficiency. The Canadian government has proposed legislation that set zero-emission vehicle (ZEV) sales objectives for importers and manufacturers of new SUVs, passenger cars, and pickup trucks, the Honourable Steven Guilbeault, Minister of Environment and Climate Change, stated in December 2022. According to these standards, at least 20% of new cars sold in Canada by 2026, at least 60% by 2030, and at least 100% by 2035 will have zero emissions.

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Key Insights:

  • Asia-Pacific (APAC) is expected to witness the fastest growth during the forecast period.
  • By Application, the electric segment is expected to contribute the largest market share between 2023 and 2032.
  • By Body, the SUV segment is predicted the highest revenue share between 2023 and 2032.

Regional Stance:

North America held the largest revenue share in 2022 owing to its well-established automotive infrastructure. The regional market is also anticipated to be driven by the growing disposable income, and rising inclination towards compact SUVs. As per the data released by the U.S. Bureau of Economics, Disposable Personal Income (DPI) grew by $2.13 trillion and personal income increased by $1.97 trillion (10.5%) in April 2020. Rising income levels tend to enhance the buying power of individuals substantially. The increasing income level is estimated to support the passenger market growth in the North American region.

The passenger car market growth in Asia Pacific (APAC) countries such as Japan, China, and India can be attributed to the rising demand for vehicles owing to the increasing per capita income of the middle-class population and changing consumer preferences. The total count of new motor vehicle registrations in Japan accounted for nearly 4.20 million units in 2022. Out of these, Japan recorded around 3.45 million new passenger car registrations.

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Report Highlights:

  • By Body, Over the next seven years, a high CAGR is predicted for the MPV/MUV/Van segment. In India, large families frequently employ MUVs/MPVs for transportation of passengers. A small number of significant companies control more than half of the market, and they dominate the category. The ability to transport more than five passengers in one vehicle makes MPVs and MUVs stand out as a popular options for passenger transportation.
  • By Application, Commercial vehicles have a variety of uses for passenger cars. Heavy-duty passenger vehicle alternatives are necessary for commercial trucks to transport cargo over great distances and at high speeds. Large pickup trucks could also require the extra space of a commercial passenger vehicle to transport equipment or freight securely, such as lumber or building supplies that wouldn't fit in the bed without endangering it. Local firms can use a larger commercial passenger automobile to make deliveries across their service region.

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Passenger Vehicles Market Scope

Report Coverage Details
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%
Largest Market North America
Fastest Growing Market Asia-Pacific
Base Year 2022
Forecast Period 2023 to 2032
Segments Covered By Type, By Body, By Application and By Fuel Type

Market Dynamics:

Drivers

Shifting Focus Toward Safer Passenger and Electric Vehicles

Automobile manufacturers are investing in the creation of new technologies and expanding their production capabilities to meet the demand brought on by the rising sales of electric vehicles in India. It is hoped that improved government rules and policies, in collaboration with numerous ministries and departments, will hasten the adoption of electric vehicles in India. For instance, the Ministry of Power made it clear that running EV charging stations in India does not require a licence. The sale of power is not what the government views as the sale of EV charging stations' services. As a result, it is now license-free. For example, Hyundai said in February 2021 that it would devote INR 1,000 crore to the creation of new, reasonably priced EVs.

The car will be produced locally, and the business has already begun discussions with regional suppliers about acquiring the necessary parts. As Kia, Hyundai's sister company, also intends to sell EVs in India, the two companies may want to form a strategic alliance. The business is focusing on the mass market and plans to introduce a more reasonably priced electric automobile for India by 2024. The government has made the decision to play a crucial role in fostering demand and acceptance for EVs, encouraging teamwork in R&D, and facilitating the development of the necessary infrastructure. To achieve the goals of closing the gap in the acquisition price of EVs compared to the standard IC engine vehicles, the government has also chosen to execute a strong EV demand-generating scheme, in terms of size and duration.

Restraint

Rise in Raw Material Cost and Production Cost

Raw resources for crucial components, particularly metals, have recently become much more expensive. Market participants are controlling advertising and marketing costs to maintain the vehicle's affordability and are improving the manufacturing process to counteract rising raw material costs. Due to the rise in petrol prices, the Indian passenger vehicle industry is also experiencing serious issues. It is also anticipated that the Indian passenger car market will grow more slowly in the early years of the forecast period due to supply chain delays and an overall increase in component costs.

Opportunities

Launching new vehicles

New releases, falling gasoline costs, and decreased interest rates are only a few of the main causes for this growth, according to analysts. In fact, the expansion of the Indian market is assisting multinational automakers with an Indian presence to counteract the contraction of other markets. When compared to other major markets, the Indian passenger automobile sector is predicted to grow more slowly due to low vehicle penetration, rising disposable income, and improved road infrastructure.

The number of passenger vehicles is anticipated to rise by 9.4 to 13.4 million units by 2026. According to the Automotive Mission Plan 2016-2026, the Indian automotive sector will expand 3.5 to 4 times from its current worth of US$ 74 billion to US$ 260 billion to US$ 300 billion, making it one of the top three automotive industries in the world. India is already well-positioned in the passenger vehicle and other segments of the automotive industries, and it is only reasonable to anticipate that its standing in the global auto market will continue to strengthen in the near future.

Related Reports:

  • Electric Passenger Cars Market: The global electric passenger cars market size surpassed USD 215.81 billion in 2022 and is anticipated to reach around USD 3,737.49 billion by 2032, registering a CAGR of 33% during the forecast period 2023 to 2032.
  • Hydrogen Fuel Cell Vehicle Market: The global hydrogen fuel cell vehicle market size was valued at USD 1 billion in 2022 and it is projected to hit around USD 69.61 billion by 2032, poised to grow at a CAGR of 52.9% during the forecast period from 2023 to 2032.
  • Small Commercial Vehicle Market: The global small commercial vehicle market size was estimated at USD 482.20 billion in 2022 and is expected to hit around USD 819.74 billion by 2032, registering a noteworthy CAGR of 5.5% from 2023 to 2032.

Recent Developments:

  • A joint venture between Sony and Honda was announced in June 2022. Sony Honda Mobility will sell electric vehicles by 2025 and offer mobility services.
  • In May 2022 Honda Cars India Limited, a renowned producer of premium cars in India, released the much-anticipated New City e: HEV in the country.
  • General Motors and Honda announced a new collaboration to co-develop a line of reasonably priced electric vehicles in April 2022. The new EVs will be built using next-generation Ultium battery technology and a new global architecture.
  • In October 2022, BYD Auto Co., Ltd. announced its debut in the Indian passenger vehicle segment by launching Atto 3, an electric sport-utility vehicle (SUV). BYD Auto Co., Ltd. reported that they delivered 340 units of Atto 3 electric sport-utility vehicles in January 2023. With existing 24 dealership showrooms with partners across India, the world's top electric vehicle producer has set an aim of selling 15,000 electric SUVs in India and further targets to capture 40% of India’s EV market by 2030.
  • In January 2023, Mercedes-Benz reported that it sold 2.05 million passenger cars in 2022. As per Mercedes, the sale of battery-electric vehicles (BEVs) was more than doubled, to 117,800 units in 2022. The highest rise in passenger cars sales for Mercedes-Benz over the year was registered in the U.S. at 4%, while Europe experienced an increase of 1%.
  • In February 2023, as per the data published by the China Passenger Car Association, Tesla sold 66,051 China-made electric vehicles (EVs) in January 2023. This was an 18% rise as compared to December 2022, when the US electric vehicle manufacturer sold 55,796 China-made vehicles.

Key Players:

  • Ford Motor Company (US)
  • General Motors (US)
  • AUDI AG (Germany)
  • Kia Motors Corporation (South Korea)
  • Groupe Renault (France)
  • Groupe PSA (France)
  • SAIC Motor Corporation Limited (China)
  • Tesla (US)
  • Daimler AG (Germany)
  • BMW AG (Germany)
  • Hyundai Motor Company (South Korea)
  • BYD Company Ltd. (China)
  • Continental AG (Germany)
  • TOYOTA MOTOR CORPORATION (Japan)
  • Nissan Motor Co., LTD. (Japan)
  • Volkswagen AG (Germany)
  • AB Volvo (Sweden)
  • Honda Motor Co., Ltd. (Japan)

Market Segmentation

By Type

  • Compact
  • Midsize
  • Premium
  • Luxury
  • Others

By Body

  • MPV
  • SUV
  • Hatchback
  • Sedan
  • Others

By Application

  • Personal
  • Commercial
  • Electric

By Fuel Type

  • Petrol
  • Diesel
  • CNG
  • EV

By Geography

  • North America
  • Europe
  • Asia-Pacific
  • Latin America
  • Middle East and Africa

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