Passenger Vehicles Market Size, Share, Growth, Forecast 2030

Passenger Vehicles Industry Prospective:

The global passenger vehicles market size was worth around USD 1.5 trillion in 2022 and is predicted to grow to around USD 2.5 trillion by 2030 with a compound annual growth rate (CAGR) of roughly 6.5% between 2023 and 2030.

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The report analyzes the global passenger vehicles market drivers, restraints/challenges, and the effect they have on the demands during the projection period. In addition, the report explores emerging opportunities in the passenger vehicles industry.             

Passenger Vehicles Market: Overview

Automobiles or cars, usually referred to as passenger vehicles, are types of motor vehicles developed primarily for transporting people. These vehicles are utilized in personal and family transportation and commute to work and recreational activities. These vehicles come in numerous sizes, styles, and models, used for various needs and preferences including hatchbacks, SUVs, Sedans, and Others. Additionally, passenger vehicles are powered by various types of engines including petrol, diesel, hybrid, and electric. The passenger vehicle industry growth is driven by various factor that includes the growing automotive industry, rising passenger car sales, growing population, rising purchasing power, and simple access to credit and financing.

Key Insights

• As per the analysis shared by our research analyst, the global passenger vehicles market is estimated to grow annually at a CAGR of around 6.5% over the forecast period (2023-2030).
• In terms of revenue, the global passenger vehicles market size was valued at around USD 1.5 trillion in 2022 and is projected to reach USD 2.5 trillion, by 2030.
• The increasing sales of passenger vehicles coupled with the increasing government initiatives are expected to drive the passenger vehicle market growth over the forecast period.
• Based on the fuel type, the electric segment is expected to grow at the highest CAGR over the forecast period.
• Based on the vehicle type, the SUV segment is expected to dominate the market during the forecast period.
• Based on region, the Asia Pacific is expected to hold a major market share over the forecast period.

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Passenger Vehicles Market: Growth Drivers

Increasing demand for passenger vehicles drives the market growth

The increase in demand for passenger automobiles spurred on by the surge in the population of middle-income groups and the improving standard of living in emerging nations are the main drivers of the passenger vehicle market's development. Another factor impacting consumer demand for these cars is the availability of reasonably priced alternatives. The market's demand for passenger cars is expected to rise as a consequence of the expanding passenger transportation and logistics industries. For instance, according to the Society of Indian Automobile Manufacturers, a total of 38,90,114 passenger vehicles were sold overall, up from 30,69,523. In comparison to the prior year, sales of Passenger Cars climbed from 14,67,039 to 17,47,376, Utility Vehicles from 14,89,219 to 20,03,718, and Vans from 1,13,265 to 1,39,020 units in FY-2022–23. Similarly, according to the latest data shared by the Federation of Automobile Dealers’ Association (FADA), India's passenger car market increased by 14% year over year (YoY). Thus, the aforementioned facts support the expansion of the market during the forecast period.

Passenger Vehicles Market: Restraints

The emergence of ride-sharing platforms acts as a major restraint for the market growth

The emergence of ride-sharing platforms is expected to act as a major restraint for the growth of the passenger vehicle industry over the forecast period. A rise in the need for time and money-saving transportation will fuel the ridesharing business. The global adoption of ridesharing services is being influenced by several important issues, including the growing cost of automobile ownership, the need to reduce traffic for environmental reasons, and government regulations that support ridesharing services. American firms including Waze, Carma, eRideShare, and CarpoolWorld believe smartphones and digital networks will dominate the ridesharing industry. Carpooling is a trend that is becoming more popular in Europe; French BlaBlaCar already has 40 million members worldwide. Liftshare is used by over 500,000 individuals in the UK. The demand for ridesharing services will also be influenced by traffic. For instance, the typical commute time in Los Angeles is 53.68 minutes. Britons in Europe had the longest commutes, lasting up to 45 minutes. As a result, ridesharing systems are being promoted by various governments. Bay Area Rapid Transit (BART) in San Francisco has started a new initiative to promote carpooling. Thus, the growing trend of ridesharing is expected to hamper the market growth.

Passenger Vehicles Market: Opportunities

The increasing population coupled with growing urbanization is expected to offer a significant opportunity

The increasing population coupled with growing urbanization is expected to offer a lucrative opportunity for passenger vehicle market growth over the forecast period. The demand for passenger automobiles is rising as metropolitan areas throughout the world expand quickly. Because commutes frequently get longer as cities grow, many people now choose to use their automobiles for transit. For instance, according to the United Nations report, in mid-November 2022, there were 8.0 billion people on the globe, which is up from 2.5 billion in 1950, 1 billion since 2010, and 2 billion since 1998. Moreover, as per the data by UNCTAD, in 2021, 56.5 percent of the population was expected to live in urban areas. In general, it will be greater in developed countries (79.5%) than in developing ones (51.8%) in 2021. The percentage of urban residents in LDCs is quite low (35.3%). Thus, this is expected to offer an attractive opportunity for market growth.

Passenger Vehicles Market: Challenges

Shifting consumer preference poses a major challenge to the market growth

The demand for passenger automobiles may change due to developing mobility patterns and changing customer preferences. Due to financial constraints, environmental concerns, or shifting views about car ownership, younger generations, in particular, may favor alternate forms of transportation like shared mobility or public transit. Thus, the shifting consumer preference of consumer is expected to pose a major challenge to market growth during the forecast period.

Passenger Vehicles Market: Segmentation

The global passenger vehicles industry is segmented based on fuel type, vehicle type, and region.

Based on the fuel type, the global market is bifurcated into petrol, diesel, hybrid, and electric. The electric segment is expected to grow at the highest CAGR over the forecast period. The segment growth is attributed to various factors such as growing government initiatives, increasing investment by key players, and increasing concerns about pollution across the globe. The government initiative includes:

• China increased the expiration date of its NEV subsidy program from 2020 to the end of 2022, despite beginning to reduce base subsidy levels by 10%, 20%, and 30% year (between 2020 and 2022). It also extended the exemption from purchase taxes for NEVs until the end of 2023.
• The American Build Back Better Act, which was drafted in 2021, promotes reorganizing EV purchase subsidies to include an extra USD 4500 for EVs equipped with batteries made by union labor, on top of a USD 7500 basic incentive. Recently, the Inflation Reduction Act was passed, extending tax credits for electric cars that satisfy specific requirements (relating to battery mineral mining and processing and domestic final assembly), as well as expanding incentives to used EVs. Last but not least, California approved a law mandating that all automobiles sold by 2035 be zero-emission vehicles, a requirement that will probably be adopted by many Sections 177 States.

Thus, the growing government initiatives are expected to drive segment growth over the forecast period.

Based on the vehicle type, the global passenger vehicles industry is divided into hatchbacks, sedans, SUVs, and MPV. The SUV segment is expected to dominate the market over the forecast period. The segment growth is attributed to its advantages such as powerful engines and high ground clearance. The International Energy Agency (IEA) reports that worldwide SUV sales increased significantly between 2020 and 2021 by over 10%, making up over 45% of all new vehicle sales globally. In Canada, there is an increasing need for electric SUVs. In 2021, the Hyundai Kona Electric, the country's first compact electric SUV, was introduced. Due to its impressive 415 km all-electric range, this small SUV is recommended as a top option for both extended excursions and regular commuting. Thus, the aforementioned facts support the segment growth over the forecast period.

Passenger Vehicles Market: Report Scope

Passenger Vehicles Market: Regional Analysis

The Asia Pacific holds a major market share over the forecast period

The Asia Pacific is expected to hold a major global passenger vehicle market share during the forecast period. The regional growth is mainly driven by the countries like India and China. The growing demand for passenger vehicles in these markets is owing to the growing disposable income of the population, the rising automotive industry, the growing availability of loans and funding to purchase new vehicles, and many others. For instance, according to India Brand Equity Foundation, the Indian passenger car market had a value of US$32.70 billion in 2021, and it is anticipated to grow at a CAGR of over 9% from 2022 to 2027 to reach US$54.84 billion.

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Similarly, NITI Aayog and the Rocky Mountain Institute (RMI) estimate that by 2030, the Indian EV finance market would likely be worth Rs. 3.7 lakh crore (US$ 50 billion). Moreover, according to research by the India Energy Storage Alliance, the country's EV industry is anticipated to grow at a CAGR of 36% until 2026. Additionally, it is anticipated that within the same period, the market for EV batteries would grow at a CAGR of 30%. Thus, these facts support the growth of the market in the region.

Passenger Vehicles Market: Competitive Analysis

The global passenger vehicles market is dominated by players like:

• Daimler AG
• General Motors
• AUDI AG
• TOYOTA MOTOR CORPORATION
• Ford Motor Company
• Groupe PSA
• SAIC Motor Corporation Limited
• Tesla
• Groupe Renault
• BMW AG
• Hyundai Motor Company
• BYD Company Ltd.
• Continental AG
• Kia Motors Corporation
• Nissan Motor Co. LTD.
• Volkswagen AG
• AB Volvo and Honda Motor Co. Ltd.
• Others.

The global passenger vehicles market is segmented as follows:

By Fuel Type

• Petrol
• Diesel
• Hybrid
• Electric

By Vehicle Type

• Hatchback
• Sedan
• SUV
• MPV

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