The passenger vehicles market includes consumer automobiles such as sedans, hatchbacks, SUVs and crossovers that are utilized for transportation of individuals and small groups. Passenger vehicles provide comfort and easy mobility to the users. Factors such as improving road infrastructure in developing nations, rising living standards and growing disposable incomes have increased the demand for passenger vehicles globally. Eco-friendly electric vehicles are also gaining popularity due to rising environmental concerns pertaining to carbon emissions from gasoline fuelled vehicles.
The passenger vehicles market is estimated to be valued at USD 2.01 Bn in 2024 and is expected to reach USD 3.34 Bn by 2031. It is projected to grow at a compound annual growth rate (CAGR) of 7.5% from 2024 to 2031.
Key Takeaways
Key players operating in the Passenger Vehicles are Toyota Motor Corporation, Volkswagen Group, General Motors, Daimler AG, Ford Motor Company. These players collectively account for over 35% of the global market share.
Growing living standards and rising disposable incomes in developing countries such as India, China, Brazil etc. have increased the demand for passenger vehicles in these nations. The governments are also investing heavily in infrastructure development which is encouraging vehicular ownership.
Major automobile manufacturers are expanding their global footprint by establishing manufacturing plants in high growth markets to cater to the rising local demand. For instance, Toyota plans to invest $10 billion in EV production globally by 2030.
Market Key Trends
One of the major Passenger Vehicles Market Trends witnessed in the passenger vehicles market is the transition towards eco-friendly electric vehicles. Major automakers like Tesla, Volkswagen, GM, Ford etc. are investing billions in electric vehicle production to transition away from fossil fuels. Several countries have also introduced policies to ban/phase out gasoline vehicles in the coming decade to reduce emissions. Declining battery prices and advancements in charging infrastructure are also expected to boost electric vehicle sales globally over the forecast period.
Porter's Analysis
Threat of new entrants: Low barriers to entry due to availability of resources and technology. However, presence of few established players pose challenges for new players.
Bargaining power of buyers: Buyers have high bargaining power due to availability of variety of options across brands. Buyers can negotiate on price and features.
Bargaining power of suppliers: Few large automobile companies dependent on limited auto-parts suppliers leads to suppliers having some negotiating power.
Threat of new substitutes: Public transport is a viable alternative. Yet personal vehicles remain primary mode of commute due to increasing income levels.
Competitive rivalry: Intense competition among existing automobile manufacturers to capture market share through feature-rich offerings, competitive pricing and expanded distribution.
Geographical Regions
North America accounts for the largest share of passenger vehicles market in terms of value, led by high vehicle ownership in the United States. Availability of versatile vehicle options aligned to diverse consumer needs and preferences drives the market.
The Asia Pacific region is poised to be the fastest growing market for passenger vehicles over the next few years. Countries like China and India are witnessing substantial increase in discretionary spending capabilities, propelling the demand for personal mobility solutions. Governments in the region are also encouraging domestic automobile manufacturing to boost economic growth.
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