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According to the International Organization of Motor Vehicle Manufacturers, light vehicles include passenger automobiles and light commercial vehicles. Due to the growing acceptance of electric vehicles and advancements in modern metal alloys, there has been an increase in demand for light vehicle production in recent years resulting from the automotive industry's constant search for cutting-edge materials to help reduce vehicle weight and achieve fuel efficiency and carbon emission targets.
A premium car is one that offers more comfort, equipment, amenities, quality, performance, and prestige for a greater price than a standard car. The global market for premium vehicles has grown dramatically in recent years, owing to a shift in customer tastes from sedans to SUVs and rising consumer disposable incomes. The global light vehicle market production is likely to reach 91.76 million units in 2023, progressing at a CAGR of 10.20%, during the forecasted period. In addition, the global premium vehicle production is forecasted to reach 11.31 million units in 2023, witnessing growth at a CAGR of 8.28%, during the projected period.
Segment Covered
By Vehicle Type: On the basis of type, the report provides the bifurcation of global light vehicle market by production into two segments: passenger cars, and light commercial vehicle. The passenger cars segment is the fastest growing segment with a significant CAGR during forecast period, due to attributes like their small size, stylish design, and affordable prices.
By Segment: In terms of segment, the report identifies two segments of the global light vehicle market production: Mass and Premium segments. The dominant share of global light vehicle market production was being held by mass, followed by premium, owing to its popularity among the middle-class population due to its affordable prices. Further, the premium vehicle market production can be segmented on the basis of vehicle type (SUV, Sedan, and Hatchback), and fuel type (Gasoline, Diesel, and Electric segments). The SUV segment held almost half of the share of the global premium light vehicle market production.
Geographic Coverage
According to this report, the global market production can be divided into four major regions: Asia Pacific, Europe, North America, and Rest of the World. The countries covered in North America region are the US, Mexico, and Canada, while Europe includes Germany, Spain, France, UK, and rest of Europe. Moreover, China, Japan, India, and Rest of Asia Pacific are included in the Asia Pacific region. Asia Pacific accounted for the largest share in the global light vehicle market production. The production for light vehicles in Asia Pacific has recently been predominantly driven by higher labor productivity and the supply and low cost of skilled labor. Moreover, the increased development, commercial and government investments, as well as FDI involvement, would help the region to boom even further. While, for the global premium light vehicle market, Europe accounted for the maximum share, owing to Europe's larger base of luxury brands such as BMW, Audi, Porsche and Mercedes-Benz, and the growth of safety technology, which are making luxury vehicles safer and more dependable on the road.
Top Impacting Factors
Growth Drivers
- Rising Number of High Net Worth Individuals (HNWIs)
- Shift in Technological Advancements
- Increasing Use of Solar Automobiles
- Rising Demand for SUVs
Challenges
- Increase in Prices of Materials
- Difficulty in Maintenance of Light Weight Materials
Trends
- Involvement of Artificial Intelligence
- Upsurge in Use of Electric Vehicles
- Increase in Use of Light Weight Material
- Integration Of Big Data And Business Analytics with Automobile Industry
Driver: Rising Number of High Net Worth Individuals (HNWIs)
The increase in the density of millionaires was accompanied by a significant increase in the number of adults in the wealthiest classes. As a result of this increase, high-net-worth individuals are more focused on purchasing anything that provides them with comfort and security, regardless of the product's price. As a result, the HNWI concentrates on the premium category of the light vehicle, which shows their status and class. As a result, with the rising number of HNWIs, the light vehicle market, in particular the premium cars would grow.
Challenge: Increase in Prices of Materials
Light weighting typically raises manufacturing costs regardless of material costs when compared to heavier metals, due to costs associated with changing production lines to handle light weighting combined with learning curve labor costs when beginning to deal with lightweight materials. Manufacturers are increasingly focusing on light weighing and on premium products. As a result, the cost of light-weight materials would rise. Carbon fiber therein with the highest weight reduction potential but also by far the highest cost. The industrialization of carbon fiber may yield a cost decrease, thereby making it significantly more attractive. Carbon fiber is currently the most discussed lightweight material due to its high potential for weight reduction in certain applications. But current costs are enormous and prohibit high penetration. Over the next two decades, however, a significant cost decline for automotive carbon fiber applications.
Trend: Upsurge in Use of Electric Vehicles
All-electric cars (EVs), also known as battery electric vehicles, store the electrical energy that powers the engine in a rechargeable battery. The vehicle's electric battery is charged by hooking it into an electric power source. Despite the fact that power generation contributes to air pollution, the EPA classifies all-electric vehicles as zero-emission vehicles because they emit no direct exhaust or tailpipe emissions. Electric vehicles, or EVs, are becoming increasingly popular around the world, and they are still evolving. Many of the current manufacturers are looking to the future and are building or planning to produce high-powered electric automobiles that can easily compete with the greatest gasoline-powered vehicles.
The COVID-19 Analysis
The COVID-19 pandemic has had a negative influence on the light vehicle industry, attributed to reduced showroom traffic, supply chain affected by the worldwide lockdown, etc. However, the premium car class may fare better than the mass-market passenger vehicle segment. As purchase decisions for premium vehicles by high-net-worth individuals may have been postponed rather than cancelled.
Analysis of Key Players
The market for light vehicles is largely dominated by automobile manufacturers. They also have an established working relationship with significant composite manufacturing firms. Many OEMs are adding electric vehicles to their model lineups in response to the demand for sustainability and fewer emissions to protect the environment. The industry wants to invest in and create electric vehicles that have the best balance of power and distance between fill-ups. Further, key players of the light vehicle market with focus on premium segment are Tesla, Inc., Mercedes-Benz Group AG, Volkswagen Group, Bayerische Motoren Werke AG, General Motors Co., Toyota Motor Corporation, Ford Motor Company, Aston Martin Lagonda Global Holdings PLC, Exor N.V. (Ferrari N.V.), McLaren Group, Stellantis N.V., and Zhejiang Geely Holding Group Co., Ltd.
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Table of Contents
1. Executive Summary
Companies Mentioned
- Bayerische Motoren Werke AG
- Mercedes-Benz Group AG
- Tesla, Inc.
- Volkswagen Group
- General Motors Co.
- Toyota Motor Corporation
- Ford Motor Company
- Stellantis NV
- Zhejiang Geely Holding Group Co., Ltd.
- Aston Martin Lagonda Global Holdings PLC
- Exor N.V. (Ferrari N.V.)
- McLaren Group
