The automotive industry occupies an essential position in the market and has seen good growth over the years. The current growth rate is appreciable at a CAGR of 4.8%. This growth is due to multiple reasons, including increasing demand for more safety features and comfort in automobiles.
The pandemic did bring a sort of speed breaker to this growth due to supply chain disruptions and production shutdowns. Automobile sales have dipped considerably, which puts OEMs in a tough spot. But the road ahead looks bright for this sector since restrictions have eased and production is heading towards normalcy. Let us see just how big this industry is.
Market size of the automotive industry
If we consider the market size of the automotive industry by its revenue, it comes out to be close to $104.2 billion in the year 2022. The largest contributor to this market size is the passenger cars segment. These cars are also incorporating fuel systems with enhanced efficiency.
In recent years, customers are getting more disposable income than ever before which has boosted their spending capacity. This has contributed to the growth of the automotive segment. Many countries have witnessed a speedy growth and rapid globalization, which has added to the demand for passenger cars leading to a growth in the automotive industry.
The largest market region in the automotive sector
Currently, the largest market in the automotive sector is of the Asia Pacific. It occupies the biggest share of the world’s share of automobiles. This fact was covered many times by Canada’s main automotive industry news source.
The Asia Pacific region has seen rapid growth due to several reasons. They utilize novel technologies, install new manufacturing sites, and set into action a robust supply chain that operates between the producers and suppliers.
There are many firms that have made good progress in the region. Some of them include Johnson Electric, Mikuni, Mitsubishi, Aisin, Daiki, Hitachi, and Mikuni. The coming years hold a lot for the automotive sector in this region.
The emerging EV segment is also poised to create an increase in the market cap of the automotive industry. These vehicles have started being adopted quickly. The government is also offering catchy incentives to the producers as well as customers to boost the supply and demand of these vehicles.
Opportunity for the automotive industry
Most economies have healed from the dealing blow of the recession in 2008 and are in the healing stage of the blow dealt by the Coronavirus pandemic. The growth rates have been encouraging for the economies of countries such as India and China. There has been a better standard of living in these countries.
The luxury car market of the world has been dominated by industry giants like Audi, BMW, and Mercedes-Benz. Consumer preferences have changed, and they have more money in hand, which makes them turn towards premium cars. This has proven to be a good opportunity for the automotive industry to supply more luxury cars.
The automotive industry is one of the largest industries in the market and is witnessing a good growth figure in developing countries. The largest region for the automotive industry is the Asia Pacific, where the growth is commendable. It is witnessing decent growth in the North American region as well.