Automotive & Transportation Market Research
The transportation industry is extremely important in the manufacturing sector, contributing about 4% of global GDP. Transportation market research shows that the contribution by this sector to the global revenue stands at USD 507.78 billion by 26 countries as of 2019. The total research and development investment in this sector is nearly USD 100 billion. The global automobile production was nearly 92 million in the year 2019. The transportation market size in the same year was USD 2 trillion. The automotive and transportation industry is estimated to grow at a compound annual growth rate of 20.78% by 2028. Global sales of automobiles fell in 2020 due to the global COVID-19 pandemic.
Commercial vehicles and passenger cars are the two most significant segments of the auto industry. China is one of the world’s largest auto markets, both in terms of sales and production. In 2018, China’s car sales fell for the first time; the market crashed in February 2020 but is now showing signs of recovery.
OEM profit was projected to expand by 50% by 2020, but the global influence of Covid-19 has changed the entire scenario. The pandemic has forced OEMs to adjust to regional supply and demand for automotive goods. Regional supply chains would become more common to meet customer demands on time. In this pandemic scenario, the global rising movement toward electric and autonomous vehicles has opened several venture opportunities to resolve the financial crisis.
The automotive industry has been the most responsive to new technology over the last decade. Vehicle manufacturing, maintenance, and operation have all been redefined because of technological advances. Automakers around the world are using the hybrid, battery, and solar energy systems to replace gas-fed vehicles along with internal and external combustion engines to protect natural resources and reduce environmental effects.
The automotive industry is still one of the world’s largest manufacturing industries, but it suffers from a technology-driven culture and a short-term outlook. The industry and its consultant and analyst supply network place little focus on the wider social and economic impacts of automobility and the business that provides it.
Automotive industry in North America
As per automotive market research, this industry in the United States is one of the largest in the world. This industry accounts for at least 3% of the country’s total Gross Domestic Product (GDP). In 2019, the United States produced approximately 10.88 million vehicles, a decrease of about 3.7 percent from the previous year. The drop in manufacturing is primarily due to rising production costs and shifts in the car industry’s supply chains. However, the North American automotive industry is projected to grow at a CAGR of 7.22% during 2020-2025.
Automotive market research reports reveal that a total of around 17.58 million vehicles were sold in the United States. SUVs accounted for the largest share i.e., 46% of the total vehicles sold. Passenger vehicles and light commercial vehicles accounted for nearly 32% and 19%, respectively. Medium and heavy commercial vehicles accounted for the minimum share of only 3%. The United States holds a major share of around 80% in the global automotive industry as of 2019. This is due to the high vehicle sales volume in the region.
Automakers have been moving their vehicle output toward vehicle electrification as pollution regulations have become more stringent. One of the major factors driving market growth in the territory is the increasing demand for commercial vehicles from the logistics and e-commerce industries. As of June 2019, the bulk of the 270 million vehicles, trucks, and buses in the United States were powered by gasoline or diesel-fueled internal combustion engines. With the rise of electric cars, the government has offered a variety of tax incentives to encourage people to buy them.
The automotive industry’s focus has turned to electric vehicles as a means of minimizing vehicular emissions, which is driving the demand. Governments and environmental agencies are enacting strict pollution norms and laws in response to increasing environmental concerns, which could drive up the cost of producing electric drive trains and fuel-efficient diesel engines in the future. Over the last five years, North America has seen unparalleled demand for electric vehicles. Electric vehicle sales in the United States, for example, increased from 194,479 in 2017 to 361,307 in 2018. In 2018, revenues in the region increased by as much as 81%. However, EV sales fell marginally in 2019, with 329,528 units sold in the same year. While sales of electric vehicles fell in 2020 because of the COVID-19 pandemic, the long-term outlook for EV sales remains positive.
However, the global COVID-19 pandemic and the adoption of the US-Mexico-Canada trade agreement in 2020 are two key factors that are likely to restrain demand growth during the forecast period. Mexico has established itself as one of the region’s most important auto manufacturing hubs. Due to the numerous incentives provided by Mexico, including low production costs and low tariffs, American automakers have built manufacturing facilities there.
Some of the major players in the North American automobile industry are Ford, General Motors, and Fiat-Chrysler. Previously, these big three companies dominated the American auto industry. These companies are currently losing market share to newer players such as Tesla and other international automakers based in Japan, South Korea, and Europe. Foreign automakers are expected to integrate into the mainstream automotive industry in the United States to increase their market share, especially in the SUV segment.
FCA, Ford, Toyota, General Motors, Mazda, Honda, and the Volkswagen Group dominate the Mexican automotive industry. Automotive market research reports suggest that tier 1, 2, and 3 suppliers have discovered new ways to supply components to these OEMs while lowering overall costs.
European Automobile industry
The automotive industry is critical to Europe’s economic development. The automotive industry employs 13.8 million Europeans directly and indirectly, accounting for 6.1% of total employment in the EU. Direct production of automobiles employs 2.6 million employees, accounting for 8.5% of all manufacturing jobs in the EU. The automotive industry’s revenue accounts for more than 7% of the European Union’s gross domestic product (GDP). The European automobile industry is a global player that exports high-quality ‘Made in Europe’ goods. Automotive market research indicates that for the EU, the sector produces a USD 85.48 billion trade surplus. Europe has the most self-driving vehicle patents in the world, accounting for 33.3% of all applications.
The EU is one of the world’s largest manufacturers of automobiles. The automotive and transportation industry is the largest private investor in research and development. The European Commission promotes global technological coordination and provides funds for R&D. These steps improve the competitiveness of the EU automotive industry and maintain its global technological leadership. The vehicle manufacturing industry is important in the EU. This sector manufactures around 18.5 million vehicles per year. In the European Union, automobile manufacturers run approximately 226 vehicle manufacturing and assembly plants.
The cars, vans, buses, and trucks manufactured by Europe are the safest, quietest, and cleanest in the world. Europe leads the way in environmentally friendly manufacturing, using less water and energy to produce a car. They also ensure that the process produces less CO2 and waste. The automotive and transportation industry has far-reaching economic consequences, sustaining a large supply chain and generating a wide range of business services. It is critical for both upstream and downstream industries, such as steel, chemicals, and textiles, as well as ICT, repair, and mobility services.
Around 80% of the growth in the automotive sector is expected to occur outside the European Union. The EU should concentrate its energies on completing and implementing preferential trade and investment agreements. These would make it easier for European firms to enter third-party markets and continue to reap the benefits of economies of scale.
Automotive industry in the Middle East
The economies of the Middle East are undergoing significant transformations. This is due to the evolution of sustainability policies, the rise of emerging technology, and shifting customer ownership preferences. Almost every sector, including the automotive industry, has been transformed by new business models, increased automation, and digitization. These factors have also sparked a few technology-driven disruptive developments in the automotive industry. Autonomous driving, electrification, diverse mobility, and networking are among them. In the Middle East today, the market is suitable for disruption, and most players believe that recent developments will gain traction and strengthen one another. Various trends expected to shape the future of the automotive industry include the rise of advanced sensor technologies, machine learning, and the rapid redistribution of profits from sales to new profits.
Some Middle Eastern automakers, especially newer firms, are taking a fresh approach to the industry. The forerunners, on the other hand, are acquiring, establishing facilities, and investing in new technological advancements. W Motors, a Dubai-based car manufacturer, will relocate its luxury hypercar production center from Italy to the emirate in 2020.
Some of the automakers in the Middle East, particularly newer companies, are bringing a different approach to the industry, while forerunners are acquiring, setting up facilities, and investing in new technological developments. For instance, W Motors, a Dubai-based car manufacturing company, will move its luxury hypercar center for production to the emirate from its facility in Italy in 2020. To ensure the occupants are awake, this car is fitted with facial recognition cameras, integrated drones, and driver behavior cameras. Some of the key players in the automotive sector in the Middle East include Kuwait Automotive Imports Co., Goodyear Middle East, and JATO Dynamics.
Automotive industry in Rest of the World
By 2026, India is projected to be the third-largest automotive market in the world in terms of volume. India holds a powerful position in the international heavy vehicles field as it is the largest tractor manufacturer, second-largest bus manufacturer, and third largest heavy trucks manufacturer in the world.
Between 2020 and 2027, the electric vehicle industry is projected to rise at a CAGR of 44%, with annual sales reaching 6.34 million units by 2027. By 2030, the electric vehicle industry would have generated five crores of direct and indirect employment. In 2030, a USD 50 billion demand for EV financing has been identified. This accounts for roughly 80% of the current size of India’s retail vehicle finance industry, worth USD 60 billion currently.
During the forecast period, 2019-2024, the South American automotive market is expected to grow at a CAGR of 4.79%. Transportation market research indicated that lower interest rates and improved consumer trust were the primary factors driving growth in passenger car sales and demand. The automobile industry in South America, however, is extremely vulnerable to changes in social and political policies. Countries such as Venezuela are seeing a decline in economic development, which has had a significant effect on the country’s automotive industry. Brazil has seen a growth in vehicle demand and sales as the economy has improved. The credit availability has increased to support the country’s light-vehicle industry, increasing investment in the country, and strong export demand.