The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Euromonitor International’s latest research reveals that global light vehicle sales grew for the sixth consecutive year in 2015. With 86.8 million units sold, this represents a 1.7% increase on demand in 2014.
However, this was the lowest annual growth rate since the recovery from the global financial crisis commenced in 2010 and the new automotive forecast calls for a slower CAGR of 2.7% between 2015 and 2031 compared to a CAGR of 3.4% between 2000 and 2015. The dramatic impact of the financial crisis on sales in mature markets was softened by booming demand across numerous emerging economies, especially China, which became the world’s largest automotive market in 2009. Nevertheless, demand has now even recovered to 2000 levels in the majority of mature markets, with the exception of Japan and some European markets (notably southern European countries such as Italy, Spain and Portugal). Looking ahead, demand growth is forecast to cool in almost all emerging markets and as most mature markets have recovered to pre-crisis levels, they are essentially saturated. Demand will thus be largely replacement in nature and hence growth potential is rather limited.
Source: Euromonitor International/JATO Dynamics
At the segment level, Sports-utility vehicles (SUVs) have been the runaway success story of recent years, with global sales almost quadrupling between 2000 and 2015. To put this into context, global light vehicle sales increased by 64% over the same period. Aside from the defection from traditional saloon cars and sports cars (demand for upper medium cars grew by just 5% and sales of executive cars, luxury cars and sports cars each slumped by more than 30% between 2000 and 2015) to SUVs in markets generally, Euromonitor’s detailed income distribution data also suggest that an increasing number of consumers in key emerging markets such as Brazil, Russia and China will be in a position to trade up from smaller cars to SUVs. As previously forecast, SUVs have now actually overtaken the lower medium cars (vehicles such as the VW Golf and Toyota Corolla) to become the largest single vehicle segment. However, a combination of key social changes such as urbanisation, increased female employment, smaller households and an ageing population, in conjunction with increasing emissions regulations, have boosted the fortunes of the small car segment (vehicles such as the VW Polo, Toyota Yaris and Ford Fiesta) and point to a healthy outlook. Moreover, there is also significant growth potential for entry-level cars in markets such as India and across the ASEAN and MEA regions as rising incomes allow an ever increasing number of consumers to get off a bike and into owning a car for the first time. Overall, Euromonitor predicts that small cars will enjoy a global CAGR of 2.9% between 2015 and 2031 but this is firmly secondary to the projected CAGR of 4.8% for SUVs.