Global Motor Vehicle Outlook 2023

Global Motor Vehicle Outlook 2023

Global retail sales of motor vehicles are forecast to increase 4.7% annually to 106 million units in 2027, while motor vehicle production is projected to rise 4.5% annually to 106.7 million units. Sales and production gains will be driven by:

• rising income levels, which will increase the numbers of first-time vehicle buyers in developing countries
• resolution of many supply chain issues, including shortages of semiconductors, which plagued the automotive industry from 2020 to 2022

Environmental & Emission Concerns Support Sales & Production of Electric Vehicles

Electric vehicles, most notably battery-electric vehicles, are expected to increase their share of light vehicle sales and production in the wake of stricter emissions regulations and government-mandated phase-outs of gas-powered vehicles. The Asia/Pacific region will account for the largest share of growth, with automakers in China expanding their manufacturing capacity and nascent markets such as India rapidly increasing their adoption of these vehicles. Numerous OEMs expect to open new electric light vehicle plants in the coming years, with many of them based in North America and Western Europe.

Fast Growth in Eastern Europe Results from Improvement in Russian Motor Vehicle Market

Eastern Europe will see the most rapid global growth in new motor vehicle sales and production as Russia’s market rebounds off a depressed 2022 base. Although Russia’s invasion of Ukraine led to widespread sanctions and economic contraction in Russia, domestic production will expand to fill the void left by an exodus of Western brands, and sales will benefit from government efforts to provide favorable loans for Russian-made vehicles. Motor vehicle sales in Russia will also be supported by increasing availability of Chinese-made offerings.

Sales of Medium & Heavy Vehicles Driven by China, E-Commerce, & Rising Tourism

Gains in medium and heavy vehicle sales and production will significantly outpace the light vehicle segment in part due to China, the largest market for these vehicles. After lockdowns related to the country’s “Zero-COVID” policy idled some motor vehicle factories and disrupted the economy, the cessation of this policy has begun to normalize economic and manufacturing activity. This in turn will prompt many businesses to expand their medium and heavy vehicle fleets. Other factors will also support sales of medium and heavy vehicles:

• The continued popularity of e-commerce will bolster demand for medium and heavy freight haulage and delivery vehicles. The pandemic accelerated the trend toward online shopping, and e-commerce will continue to expand its share of total retail sales.
• The ongoing recovery of the tourism industry from pandemic-related lows in 2020 and 2021 will boost sales of motor coaches and other types of buses.

Study Description

This Freedonia industry study analyzes the 84 million unit motor vehicle market. It presents historical sales, production and vehicle parc data (2012, 2017, and 2022) and forecasts (2027 and 2032) by region (North America, Central and South America, Western Europe, Eastern Europe, Asia/Pacific, and Africa/Mideast) and vehicle type (light vehicles; medium and heavy vehicles). The study also includes annual data and forecasts from 2019 to 2026.