The current state of the global automotive manufacturing market

The global automotive manufacturing sector is one of the largest industries in the world. Each year, 60 million vehicles are produced, which represents around 50% of the world’s oil consumption. The industry also employs 4 million people and even more indirectly through the companies it supports.

Global economic development depends on the activities of the automotive industry due to the wide range of businesses it is integrated into. The automotive industry contributes about 3% of total global GDP output, and this share is higher in emerging markets like China and India, where the automotive industry accounts for 7% of GDP.

Automotive manufacturing is based on three important pillars: industrial development, mobility and people development. Around the world, automotive manufacturing plants are often surrounded by other manufacturing facilities such as steel mills, component makers and glass manufacturers – industries that fuel automotive manufacturing. Automotive manufacturing attracts these other industries, developing clusters that lead to new municipalities in need of infrastructure. Detroit in the United States is a perfect example of how these clusters turn into municipalities, as is Guangzhou Province in China and Chennai in India.

Automotive manufacturing has also had the impact of revolutionizing mobility. With access to automotive products, people and goods now move around the world more easily. This has led to the migration of people and businesses and the establishment and development of suburban areas.

Automotive manufacturing has limited applications outside of the automotive industry. The sole purpose of automobile manufacturing is usually to produce vehicles for commercial, industrial, military, and defense and emergency services.

Hot Topics in Automotive Manufacturing

There are currently two hot topics in automotive manufacturing that are gaining more and more attention around the world. The first is the shift from fossil fuel vehicles to electric. Now more than ever, the world must come together to reduce greenhouse gas emissions and achieve carbon neutrality to prevent the irreversible impact of climate change. As transportation contributes more than a third of global carbon dioxide emissions, switching from traditional fossil-fuel vehicles to electric vehicles has become a key emissions reduction strategy. As a result, automakers have responded and started developing innovative zero-emission electric vehicles, with new technologies emerging every year.

car market, car manufacturing market

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The second major trend that is currently impacting the automotive manufacturing sector is the connected car. The rise of the Internet of Things (IoT) has boosted consumer expectations for connected technologies at all levels. The automotive industry refuses to be left behind and vehicles are emerging with innovative connected features that are both functional and enhance the driver and passenger experience. A particular trend in automotive IoT technology is the sharing of digital data and remote diagnostics to report vehicle health and make predictions to prevent breakdowns.

Current Global Automotive Manufacturing Market

The current global automotive manufacturing market was valued at $2.9 trillion in 2022, and it is currently growing at a CAGR of 3.1% after several years of decline where the market fell by 0.6% between 2017 and 2022. This represented a faster decline. than the decline of the global economy, which has been hit by the Covid-19 pandemic. The industry is expected to continue growing at a CAGR of 3.71% between 2020 and 2030 and will consist of 122.83 million units by the end of the decade, which is a significant jump from 85, 32 million units by 2020. Currently, the automotive manufacturing industry ranks first among all global manufacturing industries in terms of market size.

The market is segmented by vehicle types into major categories of electric vehicles, hybrid electric vehicles, plug-in hybrid electric vehicles, mild hybrid electric vehicles, natural gas vehicles, fuel cell electric vehicles, diesel and gasoline. As the world moves towards cleaner energy, diesel and gasoline vehicles will remain important at least until the end of the decade.

car market, car manufacturing market

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China and the United States are the world’s major vehicle producers, and some of the major players in the industry include Toyota Motor Corp., Volkswagen AG, Daimler AG, Ford Motor Co., Honda Motor Co. Ltd., Bayerische Motoren Werke AG, General Motors Co., Fiat Chrysler Automobiles NV, Hyundai and Nissan.

Future Directions of Automotive Manufacturing

Global economies are currently facing dramatic changes. Digitization, innovative technologies and new business models are driving profound changes across all industries, including automotive manufacturing. These factors are driving four disruptive trends in automotive manufacturing: diverse mobility, autonomous driving, electrification and connectivity, which will shape the evolution of the industry over the next decade.

This change will cause several changes in the industry. There will be a move towards shared mobility, with predictions that one in ten cars sold in 2030 will be used as a shared vehicle. Despite this trend towards vehicle sharing, sales of vehicle units will continue to grow, but at a slower pace than in previous years.

It is also predicted that by the end of the decade, around 15% of all new cars sold will be fully self-driving. However, the industry must first overcome the technological and regulatory issues that currently pose barriers.

The rise of electric vehicles will also certainly impact car manufacturers who will have to adapt their processes to produce these vehicles. The move to electric, while propelled by the urgent need to meet climate change goals, will not be instantaneous, and automakers are likely to shift to electric vehicle production in stages.

Final Thoughts

The automotive manufacturing sector is one of the most important industries in the world, generating billions of dollars in revenue and influencing global economies. In the coming years, the industry will have to meet the demands of climate goals, as well as the growing trend of vehicle sharing and the demand for embedded IoT technology.

More from AZoM: The Global 3D Printing Market – Growth, Trends and Applications

References and further reading

Global Automotive Market Analysis and Outlook to 2030: Electric, Hybrid Electric, Plug-in Hybrid Electric, Mild Hybrid, Natural Gas, Fuel Cell Electric, Diesel, Gasoline [online]. Yahoo funds. Available at: https://finance.yahoo.com/news/global-automotive-market-analysis-outlook-100300546.html (last accessed November 2022)

Global Car and Automobile Manufacturing – Market size 2005-2028 [online]. Ibis World. Available at: https://www.ibisworld.com/global/market-size/global-car-automobile-manufacturing/ (Last accessed November 2022)

Trends shaping the automotive industry in 2023 [online]. SEO pivot. Available at: https://linchpinseo.com/automotive-industry-trends/ (Last accessed November 2022)

By Paul Gao, Hans-Werner Kaas, Detlev Mohr and Dominik Wee. Automotive revolution – perspective towards 2030 [online]. McKinsey. Available at: https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/disruptive-trends-that-will-transform-the-auto-industry/de-DE (last accessed November)

Disclaimer: The views expressed here are those of the author expressed privately and do not necessarily represent the views of AZoM.com Limited T/A AZoNetwork, the owner and operator of this website. This disclaimer forms part of the terms of use of this website.

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