Automotive Global Industry Overview

November 2023

This briefing examines how the automotive industry is performing globally and in the largest countries in terms of automotive output. The report also provides data for production, market size, imports, exports, industry costs, industry profitability and number of companies. The industry and market overview provide benchmarks against other countries in the region.

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This report comes in PPT.

Key findings

Industry forecast to experience slower growth by 2027

The global automotive industry is forecast to recover from the supply shocks experienced over 2020-2022, but will experience slower growth over the period to 2027 compared to 2017-2022. Slower global economic growth, weaker consumer demand for new vehicles in the largest markets, and continuing cost pressures will continue to impact the industry.

Cost pressures are expected to persist

The industry is forecast to continue to feel significant cost pressures because of rising labour costs and the switch to electric vehicles. Ageing populations and low unemployment rates in the largest economies will continue to increase operating costs, while the production of electric vehicles will require higher investment and R&D costs.

Supply chain review remains among the top priorities for the automotive industry

Supply chain optimisation efforts are expected to continue, as a result of rising geopolitical tensions. Car manufacturers are anticipated to create smaller networks of semi-independent suppliers to reduce risks. In addition, car manufacturers are expected to increase vertical integration efforts and collaborate more with mining, chemical and technology companies.

Consolidation in the industry expected to increase

Rising operating costs and the need for large-scale investment in electric vehicles are expected to continue to drive consolidation in the automotive industry. To share investment costs, companies are expected to form alliances, and intensify acquisitions of smaller component suppliers.

 

Scope
Key findings
Industry to show slower growth over the forecast period
China and the US to drive the global automotive industry’s expansion
Rising commodity prices and shift to electric vehicles add to the rising cost pressures
Global automotive profits lifted by the US and emerging markets
Weaker global demand impacts automotive exporters
Increasing production of electric vehicles to support growth in imports
Key future trends in the automotive industry
Global macroeconomic trends
Toyota and Volkswagen remain the largest automotive companies globally
Number of companies decline as industry consolidation continues
Consolidation and structural changes continue to increase concentration in the industry
China: Industry to show slower growth amid maturing domestic demand
Electric vehicles production and exports to support industry’s growth
US: Industry forecast to maintain growth thanks to stable domestic demand
Stable economic outlook and investment in electric vehicles to support industry’s growth
Germany: Industry to recover, but long-term challenges remain
Weaker demand in export markets and structural changes put pressure on the industry
Japan: Industry forecast to recover but production outsourcing continues to constrain growth
Electric vehicle segment provides long-term growth opportunities for the industry
Mexico: Export boom continues to support the industry’s growth
New investments and sustained exports boom to drive industry’s growth
South Korea: Exports are forecast to drive industry growth
Investment in electric vehicle technologies and exports to drive expansion
India: Industry forecast to see growth accelerate thanks to the expanding domestic demand
Domestic demand growth and large export potential to benefit the industry
France: Production relocation continues to hurt industry growth
Production relocation slows growth, but batteries could emerge as a bright spot
UK: Industry forecast to recover but show subdued long-term growth
Industry expected to recover from supply chain shocks, but long-term challenges remain
Spain: Industry forecast to maintain stable growth over the period to 2027
Investment in production capacity expansion and electric vehicles to support growth
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