Global Motor Vehicle Outlook

Global Motor Vehicle Outlook

Global retail sales of motor vehicles are forecast to increase 4.3% annually to 104.8 million units in 2026, while motor vehicle production is expected to advance 5.3% annually to 104.9 million units. Both new sales and production will rebound from the declines of the previous period when the industry was affected by:

• COVID-19-related lockdowns, temporary factory closures, and economic contraction in 2020
• shortages of parts and materials (most notably semiconductors) in 2020 and 2021, creating challenges for the automotive supply chain

Gains in both sales and production will be supported by:

• rising demand for electric and hybrid vehicles that comply with increasingly stringent emissions regulations and mandates in many countries
• rising income levels
• resolution of many supply chain issues

China & India Will Drive New Motor Vehicle Sales & Production in the Asia/Pacific Region
The Asia/Pacific region will account for the largest absolute gains in new motor vehicle sales and production, driven by the large Chinese and Indian markets:

• Rising income levels, coupled with the expansion of suburban areas away from cities, will encourage new vehicle purchases in China as travel by car becomes more convenient than public transportation in many cases.
• Like China, increasing incomes will make vehicle ownership more affordable in India. In addition, significant spending on the country’s infrastructure will boost sales of medium and heavy vehicles used for these construction projects.

Light Vehicle Production Boosted by Demand for Electric Vehicles

Light vehicle production will outpace production of medium and heavy vehicles due in part to growing demand for electric and hybrid passenger vehicles in the wake of stricter emissions regulations and government-mandated phase-outs of gas-powered vehicles. A number of OEMs are planning new electric light vehicle plants in the coming years, with many of them to be based in North America and Western Europe.

Medium & Heavy Vehicle Gains Will Be Aided by E-Commerce & Tourism
Growth in medium and heavy vehicles will be bolstered by rising e-commerce sales, which will stimulate demand for and production of increasing numbers of freight haulage and delivery trucks. In addition, healthy gains are expected for motor coaches and other buses as global tourism expands after the severe travel restrictions of 2020 and 2021.

Most Supply Chain Issues Will Fade, But War in Ukraine Will Cause Shortages
Vehicle component shortages caused by the pandemic are expected to be resolved in the near term, with a number of OEMs reporting in 2022 that their supply of semiconductors was beginning to normalize. However, Russia’s war in Ukraine is expected to cause additional short-term supply chain disruptions, as a significant amount of vehicle wire harnesses and neon – used in semiconductor manufacturing – is sourced from Ukraine.

Study Description

This Freedonia industry study analyzes the 85 million unit motor vehicle market. It presents historical sales, production and vehicle parc data (2011, 2016, and 2021) and forecasts (2026 and 2031) 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).
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