Luxury Car Market - Growth, Trends, and Forecast (2019 - 2024)
The luxury car market (henceforth, referred to as the market studied) is anticipated to register a CAGR of about 5.83% during the forecast period (2019 – 2024).
A rise in tangible luxury offerings in vehicles, shifting consumer preferences from sedan to SUVs, and increasing disposable incomes of consumers have been propelling the demand for luxury cars around the world. However, there are a few factors, such as an increase in import tariffs, which are expected to hinder the growth of the luxury car market. For instance: the US President-elect may increase the import tariffs on German luxury cars. The BMW and other Germany luxury car manufacturers may have to face a 35% import duty for cars not manufactured in the United States.
The growing trend of electric luxury vehicles across the regions is fueling the demand for luxury cars. With the growing environmental concerns, the governments, and environmental associations across the world are tightening the emission norms. As a result, major luxury car manufacturers are launching electric variants of their vehicles, which is expected to accelerate the growth of the luxury car market over the forecast period.
Some of the major players in the market studied are Mercedes-Benz, BMW, Lexus, Audi, Volvo, Land Rover and Jaguar, and Tesla. In 2018, Mercedes-Benz dominated the luxury car market, with a market share of approximately 16%, followed by BMW. The other players in the market studied include, Ferrari, Lamborghini, and Porsche, among others.
Scope of the Report
The global luxury car market covers all the latest R&D initiatives, investment done by the governments, and vehicle manufacturers across the world. The scope of the report includes
Key Market Trends
IC Engines Expected to Witness Slow Growth Rate
The IC engine segment of the market studied is currently leading the market studied, however, it is anticipated that the demand for IC engine vehicles may slow down over the forecast period. At present, major players, such as Mercedes-Benz, BMW, and Audi cover a significant percentage of share in the drive type market segmentation in the global luxury car market.
With the growing environmental concerns, owing to rising exhaust emissions, the governments and environmental associations across the world are tightening the emission norms. As a result, the demand for sustainable and environment-friendly transportation, such as EVs, is increasing, with governments offering higher incentives and subsidies to the owners of these vehicles.
For instance, China registered the highest number of new EV registrations in FY 2017-2018.
However, North America is expected to lead the luxury EV sales, owing to high disposable incomes and the availability of EV infrastructure in the region. The growing demand for style, power, and advanced telematics is also expected to continue to propel the demand for luxury EVs.
Additionally, luxury car component manufacturers are focusing on the development of next-generation smart mobility technologies, such as autonomous driving, personal voice assistance, and retina recognition, which are also expected to boost the sales of luxury EVs.
The Asia-Pacific Region is Expected to Witness the Fastest Growth Rate
The Asia-Pacific region is expected to witness the fastest growth rate during the forecast period.
Currently, China is one of the largest markets for luxury cars among all developing countries in the luxury car market. The premium car manufacturers, such as Audi, Mercedes-Benz, BMW, and Lexus, have always maintained positive growth in the Chinese luxury car market. In 2017, luxury cars in the country accounted for more than 9% of the overall passenger cars sales. With the growing business opportunities in the country, the market for luxury cars is expected to witness moderately fast growth.
Mercedes and BMW have dominated the luxury sedan segment of the Indian Market. In 2017, Mercedes India registered 16% growth compared to 2016. C-Class and E-class are the majorly sold models by the company.
Some of the key players of the luxury car market are Daimler AG, BMW, Volvo, Volkswagen Group, and Aston Martin. The market studied is highly driven by the factors, like advanced technology, more comfort, growing investment in R&D projects, and a growing standard of living of people around the world. To provide more luxurious experience to the people, major luxury car manufacturer are entering into joint ventures with technology providers. For instance: In February 2019, Daimler AG and BMW AG have agreed to cooperate on developing self-driving cars. Both the manufacturers have signed a memorandum of understanding (MoU) to jointly develop the next generation of autonomous-driving technology, which should be market-ready by the middle of the next decade.
Mercedes Benz, which is a top manufacturer of luxury cars, brings in a range of new technologies, in order to increase its footprint in India. The company may be upgrading its IC engine vehicles to battery-powered electric vehicles and plug-in hybrids.
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