Passenger Vehicles Market - By Propulsion (ICE, Electric, Hybrid), By Vehicle Type (Hatchback, Sedan, SUV, MUV, Vans), By Application (Personal, Commercial), By Drive Type (Front-wheel Drive, Rear-wheel Drive, All-wheel Drive) & Forecast, 2023 – 2032

Passenger Vehicles Market Size

Passenger Vehicles Market was valued at USD 1.45 trillion in 2022 and is anticipated to register a CAGR of over 9% between 2023 and 2032 as it is driven by the escalating environmental concerns and regulations worldwide. As consumer demand continues to grow, manufacturers experience increased sales, contributing to the overall market expansion. According to the Society of Indian Automobile Manufacturers, in 2022, the sales of passenger vehicles rose from 3,069,523 to 3,890,114 units between 2021-22 and 2022-23. This upward trend in passenger vehicle purchases reflects consumer preferences while stimulating innovation and competition among manufacturers, ultimately fostering a dynamic & thriving market for passenger vehicles.
 

Consumer demand, a pivotal factor for the passenger vehicles industry, is witnessing sustained growth. This surge is fuelled by evolving consumer preferences, lifestyle changes, and a desire for personalized transportation solutions. As consumers seek enhanced features, fuel efficiency, and advanced safety measures, manufacturers are compelled to innovate. The dynamic interplay between consumer expectations and industry innovation continues to shape the passenger vehicles industry, making it imperative for manufacturers to align their offerings with evolving consumer needs and desires.
 

Rising fuel prices impede the passenger vehicles industry. As fuel costs escalate, consumers may reconsider their vehicle choices, favouring more fuel-efficient or alternative-fuel options. This shift in preference could affect the demand for traditional Internal Combustion Engine (ICE) vehicles, pressuring manufacturers to innovate in the electric and hybrid segments. Adapting to this change presents both technological and economic challenges, influencing market dynamics and requiring manufacturers to navigate a landscape increasingly shaped by environmental concerns and fuel price volatility.
 

COVID-19 Impact

The COVID-19 pandemic had detrimental impacts on the passenger vehicles market. Disruptions in manufacturing, supply chain constraints, and decreased consumer confidence led to a significant decline in sales. Production shutdowns, coupled with economic uncertainties, resulted in delayed purchases, and subdued demand. The pandemic-induced challenges including lockdowns and restrictions disrupted the industry's operations, creating a negative ripple effect on the market, which struggled to recover amid uncertainties and shifts in consumer behaviour.
 

Passenger Vehicles Market Trends

The introduction of electric passenger cars is a key factor propelling the passenger vehicles industry. As the automotive industry transitions toward sustainable practices, the launch of Electric Vehicles (EVs) addresses environmental concerns and aligns with changing consumer preferences. For instance, in September 2023, Volvo Car India launched the electric C40 Recharge, an electric model, with an initial price of USD 6.4 million plus applicable taxes. This marks Volvo's EV assembled at the company's plant in Hosakote, Bengaluru, Karnataka. The C40 Recharge is equipped with an 11-kW charger. This shift in the market landscape enhances overall industry dynamics, fostering growth and establishing a foundation for the future of the market.
 

The escalating demand for sustainable mobility is cultivating a lucrative growth trajectory for the passenger vehicles industry. As environmental consciousness increases, consumers are actively seeking eco-friendly transportation options. This rise in demand for sustainable vehicles propels manufacturers to innovate in electric and hybrid offerings. Leveraging this shift addresses environmental concerns and positions companies strategically in a market driven by eco-conscious consumers, fostering substantial & profitable expansion in the passenger vehicle sector.
 

Passenger Vehicles Market Analysis

Based on propulsion, the market is divided into ICE, electric, and hybrid. The ICE segment accounted for around 50% market share in 2022. The imminent launch of ICE propulsion vehicles featuring automatic transmission is fuelling segment growth. These vehicles combine traditional combustion engines with modern automatic transmission technology, catering to a broad consumer base. For instance, in September 2023, Jeep India introduced more budget-friendly 2WD versions of the Jeep Compass diesel-automatic. It is equipped with a 2.0-liter multi-jet turbocharged diesel engine sourced from Fiat, delivering 172 HP of power and 350 Nm of torque. This engine is paired with a 9-speed automatic gearbox.
 

Based on application, the market is divided into commercial and personal. The personal segment held around 60% market share in 2022 and is poised to register a significant growth over the forecast period. The segment is driven by a dual emphasis on customization and comfort. Consumers increasingly seek vehicles that offer customization to tailor their driving experience as per individual preferences. Simultaneously, the demand for enhanced comfort and convenience, coupled with advanced infotainment systems, underscores the importance of a seamless and enjoyable driving environment. These factors collectively contribute to the propulsion of the personal application segment, reflecting the evolving priorities of discerning consumers in the market.
 

Asia Pacific held a dominant market with a revenue of USD 713.5 billion in 2022 and is poised for significant growth over the forecast period. The Asia Pacific passenger vehicles industry is propelled by rapid urbanization and robust economic growth. As urban centres expand, there is a heightened demand for personal mobility, boosting the need for passenger vehicles. Concurrently, strong economic growth across the region stimulates increased consumer spending on vehicles. The expanding middle-class population, with rising disposable incomes, further amplifies this trend, creating a favourable environment for sustained market expansion in the Asia Pacific region.
 

Passenger Vehicles Market Share

Major players operating in the passenger vehicles industry are:

• Ford Motor Company
• Geely Automobile Holdings Limited
• Tesla
• SAIC Motor Corporation Limited
• Kia
• Changan Automobile
• BYD Company Ltd.
• Changan Automotive
• SAIC
• Tesla

are few of the companies that hold major market revenue in 2022.  Players in the market are fiercely competing for market share by prioritizing sustainable mobility solutions. They leverage incentives, such as government support for eco-friendly vehicles, and invest in cutting-edge technologies to enhance their offerings, gaining a competitive edge in the evolving automotive landscape.
 

Passenger Vehicles Industry News

• In September 2023, Tata Motors introduced the 2023 edition of the Nexon EV, with prices ranging from USD 1.5 million to USD 2.1 million (ex-showroom, all-India). The updated model is available in three types including Creative, Fearless, and Empowered, offered in either Medium Range (MR) or Long Range (LR) specifications. These types replace the previous Prime spec and Max spec configurations.
   

Passenger Vehicles Market - By Propulsion (ICE, Electric, Hybrid), By Vehicle Type (Hatchback, Sedan, SUV, MUV, Vans), By Application (Personal, Commercial), By Drive Type (Front-wheel Drive, Rear-wheel Drive, All-wheel Drive) & Forecast, 2023 – 2032

Market, By Propulsion

• ICE
  • Petrol
  • CNG
  • Diesel
• Electric
• Hybrid
  • PCEV
  • FCEV

Market, By Vehicle Type

• Hatchback
• Sedan
• SUV
• MUV
• Others

Market, By Application

• Personal
• Commercial

Market, By Drive Type

• Front-wheel drive
• Rear-wheel drive
• All-wheel drive

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia 
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • South Africa
  • Saudi Arabia