Automotive OEM Market Size, Share, Trends, Growth, Forecasts, 2034

Automotive OEM Industry Prospective:

The global automotive OEM market size was worth around USD 39.39 billion in 2024 and is predicted to grow to around USD 61.16 billion by 2034, with a compound annual growth rate (CAGR) of roughly 4.50% between 2025 and 2034.

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Automotive OEM Market: Overview

An automotive original equipment manufacturer (OEM) is a company that produces all parts of a vehicle in-house. The vehicle brand is responsible for manufacturing automotive parts such as engine, outer body, internal components, and other components. OEMs are responsible for all processes involved in innovating, designing, and manufacturing a vehicle component.

According to the market study, vehicular parts obtained from original equipment manufacturers offer higher superiority compared to third-party vendors.

In addition, OEMs also include companies that produce certain parts of a vehicle and sell them to car manufacturers, ensuring delivery of high-quality components.

During the forecast period, the demand for automotive OEM is expected to grow, driven by an increasing number of vehicle owners across the globe. In addition to this, the increased demand for durable and high-performance automotive parts will promote the market expansion rate.

In the coming years, the surge in electric vehicle (EV) innovation will open new opportunities for future growth. However, the industry is expected to face tough competition from aftermarket automotive part sellers as well as the high cost involved with undertaking services from OEMs.

Key Insights: 

• As per the analysis shared by our research analyst, the global automotive OEM market is estimated to grow annually at a CAGR of around 4.50% over the forecast period (2025-2034)
• In terms of revenue, the global automotive OEM market size was valued at around USD 39.39 billion in 2024 and is projected to reach USD 61.16 billion by 2034.
• The automotive OEM market is projected to grow at a significant rate due to the increased demand for advanced features in vehicles.
• Based on the components, the powertrain segment is growing at a high rate and will continue to dominate the global market as per industry projections.
• Based on the distribution channel, the distributors segment is anticipated to command the largest market share.
• Based on region, Asia-Pacific is projected to dominate the global market during the forecast period.

Automotive OEM Market: Growth Drivers

Increased demand for advanced features in vehicles to drive  market value during the forecast period

The global automotive OEM market is expected to be driven by the rising demand for advanced features in vehicles. One of the key components of modern vehicles gaining extreme popularity is integrating advanced safety features alongside infotainment components.

For instance, advanced driver assistance systems (ADAS) have become integral to novel safety measures in all modern vehicles. In addition, several regional governments are mandating the installation of ADAS in new automotives.

In 2022, the European Union launched the  General Safety Regulation 2 (GSR2). It requires ADAS to be installed in all newly registered vehicles starting July 2024.

In addition to this, new mandates under GSR2 include the installation of in-cabin systems for managing driver distraction, drowsiness, and detection of driver readiness. Infotainment systems in novel vehicles are also gaining higher traction. Recent trends indicate that automotive OEMs are largely focusing on using advanced Artificial Intelligence (AI)-based solutions as well as integrating smartphone technology to cater to the changing consumer preferences.

In a recent event, Mercedes-Benz announced the integration of Chat GPT into MBUX and NIO and released NIO Link for hassle-free integration of smartphones.

Growing stringency over harmful emissions and environmental pollution from the automotive industry to propel market revenue

The automotive sector across the globe is witnessing extreme pressure from environmental regulatory bodies and governments to curb the emission of harmful gasses and reduce environmental pollution. This, in turn, is encouraging automotive original equipment manufacturers to invest in innovation aimed at improving fuel efficiency in vehicles and reducing the release of toxic contaminants in the ecosystem.

The global automotive OEM market players are increasingly shifting toward experimenting with more compact engines, particularly hydrogen fuel cells that can power advanced vehicles with ease.

In January 2024, Tata Motors announced the launch of a highly sophisticated and indigenously developed engine for powering Tata trucks in the range of 19-42 tonne across categories.

Automotive OEM Market: Restraints

High cost of OEM parts to limit market expansion rate in the future

The global automotive OEM industry is expected to be restricted by the high cost of the parts obtained from OEMs. Original equipment manufacturers do not compromise on part quality and performance. They use extensively researched technologies to ensure optimal performance of the automotive component.

In addition, all OEM components meet regulatory and safety standards which further contributes to higher prices of the services and products offered by OEMs. The rising inflation rate worldwide and growing cost of living can severely impact demand for OEM-based automotive parts.

Automotive OEM Market: Opportunities

Growing investments in electric vehicles (EVs) worldwide to create new opportunities for market players

The global automotive OEM market is expected to generate growth opportunities due to the rising investments in the EV sector. A growing number of EVs are being introduced and sold in the commercial market across the globe. The growth in EV demand is further facilitated by coherent investments in charging infrastructure and research & development (R&D) of more powerful or long-lasting batteries.

In July 2024, AIM, a leading Japanese technology company focusing on automotive R&D, including powertrains for electric and internal combustion applications, announced that it will debut the AIM EV Sport 01 at the Goodwood Festival of Speed. The new launch is the company’s first concept vehicle made using a PM200 electric motor with a configuration of dual-motor rear-wheel-drive.

In December 2022, Vauxhall, one of the UK's oldest vehicle manufacturers, announced the launch of 100% electric Astra Sports Tourer Electric and Astra Electric, which was launched in the regional market in 2024. The surging rate of innovation in electric batteries, including advancements in lithium-sulfur (Li-S) batteries in replacing lithium-ion batteries for EVs, may act as a game-changer for the market players during the forecast period.

Automotive OEM Market: Challenges

Intense competition from aftermarket brands to challenge industry expansion trends

The global automotive OEM industry is expected to be challenged by the intense competition the market faces from aftermarket brands. Automotive components offered by companies aftermarket services are relatively more affordable and deliver higher value for money.

Additionally, aftermarket service providers are increasingly investing in innovation to improve product performance and meet customer expectations, further helping the segment thrive.

Automotive OEM Market: Report Scope

Automotive OEM Market: Segmentation

The global automotive OEM market is segmented based on components, vehicle type, distribution channel, and region.

Based on the components, the global market segments are chassis, powertrain, car interiors, electronics & electrical solutions, and external body. In 2024, the highest growth was listed in the powertrain segment. The component is considered the most essential part of the core components of automotive vehicles. OEMs invest heavily in developing powertrain systems designed internally as the technology reflects brand core intelligence. The Bugatti Chiron Super Sport 300+ delivers an energy of 1,600 horsepower showing the OEM’s commitment toward excellence.

Based on vehicle type, the global automotive OEM industry is divided into electric cars, passenger vehicles, and commercial vehicles.

Based on the distribution channel, the global market segments are wholesalers, retailers, and distributors. In 2024, the highest demand was listed in the distributor's segment, as they are a crucial point of contact for service centers and OEMs. Most distributors buy OEM components in bulk and have access to some of the most exclusive vehicle parts, which helps them stand out from other forms of distribution channels. O'Reilly Automotive, a leading OEM distributor, was reported to make a sale of over USD 4 billion in the second quarter of 2024.

Automotive OEM Market: Regional Analysis

Asia-Pacific poses the most lucrative growth opportunities, according to market research

The global automotive OEM market is expected to be led by Asia-Pacific during the forecast period. The strategic and quick expansion of the Chinese EV sector across the globe is expected to reshape the region’s automotive original equipment manufacturer sector.

China is currently the leading producer of EVs, offering a range of electric variants for passenger and commercial purposes. The country is also welcoming international vehicle manufacturing brands to open highly advanced manufacturing facilities across Chinese regions.

In December 2024, Audi FAW NEV Company announced that it had begun the production of all-electric vehicles for the Chinese market. The company is a joint collaboration between Audi and FAW and has invested in constructing a state-of-the-art manufacturing facility in China.

Similarly, the Indian and Japanese markets are expected to deliver exceptional revenues since the demand for high-performance automobiles is on the rise.

The growing government support for the development of more automobile manufacturing facilities across major Asian countries, along with surging investments in research for the deployment of superior OEM-produced automotive parts, will promote exceptional growth in the regional sector.

Automotive OEM Market: Competitive Analysis

The global automotive OEM market is led by players like:

• Ford Motor Company
• Toyota
• Nissan
• Volkswagen Group
• Mercedes-Benz Group
• Hyundai Motor Group
• BYD Auto
• Stellantis
• Renault Group
• SAIC Motor
• BMW Group
• General Motors
• Changan
• Honda
• Suzuki

The global automotive OEM market is segmented as follows:

By Components

• Chassis
• Powertrain
• Car Interiors
• Electronics & Electrical Solutions
• External Body

By Vehicle Type

• Electric Cars
• Passenger Vehicles
• Commercial Vehicles

By Distribution Channel

• Wholesalers
• Retailers
• Distributors

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa