The automotive assembly market is estimated to be valued at US$ 41,490 Mn in 2022 and is expected to exhibit a CAGR of 5.80% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
The automotive assembly market involves processes of fitting together components of an automobile, including body manufacturing and assembly, engine manufacturing, chassis assembly, and final assembly of vehicles. Key automotive assembly processes involve welding of body parts, installation of powertrain components, wiring harness installation, and quality checks before delivery. Modern vehicles comprise of thousands of individual components sourced globally and require sophisticated assembly lines to systematically fit them together with precision.
Market Dynamics:
Rising electric vehicle sales: Stringent emission norms across regions are prompting automakers to aggressively ramp up electric vehicle production. Additionally, government incentives and subsidies for electric vehicle purchases are fueling demand. This is positively impacting the automotive assembly market as electric vehicles require specialized manufacturing processes compared to internal combustion engine vehicles.
Increasing stringency of government regulations: Regulatory bodies globally are implementing stringent fuel economy and emission standards to curb vehicular pollution. For example, Corporate Average Fuel Economy (CAFE) standards in the US and European Union's fleet-wide emission targets are necessitating upgrades in powertrain technologies. Automakers are compelled to optimize assembly lines to efficiently manufacture advanced drivetrains like hybrid systems and meet compliance. This is driving investments in automated assembly facilities, thereby supporting market growth over the forecast period.
Segment Analysis
The automotive assembly market is segmented into electric vehicles, passenger cars, and commercial vehicles. The electric vehicles segment currently dominates the market due to growing environmental concerns and stringent emission regulations imposed by governments globally. Various government initiatives to promote electric vehicles through subsidies and tax exemptions have also boosted the adoption of electric vehicles.
PEST Analysis
Political: Governments across countries are providing several incentives like subsidies, tax benefits etc. to promote electric vehicles. They are also imposing stricter emission norms to curb pollution.
Economic: Rising disposable income levels have increased consumer spending on personal vehicles. Lower interest rates and easy financing options have also aided sales growth. However, fluctuating fuel prices and economic slowdowns remain challenges.
Social: Increasing environmental awareness among public has driven preferences for cleaner fuel vehicles like electric vehicles. Social media marketing by automakers further attracts younger buyers. Safety features are an important decision making factor.
Technological: Advancements in battery technologies, electric powertrains, self-driving technologies, and connectivity solutions are driving innovation. Integrated mobility solutions are gaining traction.
Key Takeaways
Global Automotive Assembly Market Demand is expected to witness high growth, exhibiting a CAGR of 5.80% over the forecast period of 2023 to 2030, due to increasing investments by automakers in electric vehicles and advancement of self-driving technologies. The market was valued at US$ 41,490 Mn in 2021.
Regional analysis: North America dominates the global market currently due to presence of prominent automakers and supportive policies for EVs. Asia Pacific is expected to witness fastest growth led by China due to large EV subsidies and initiatives to transition to electric mobility.
Key players operating in the automotive assembly market are BMW Group, Daimler, Ford Motor, General Motors, Honda Motor, Hyundai Motor, SAIC Motor, Stellantis, Toyota Motor, Volkswagen Group, and others. Leading players are investing heavily in new product launches, technological advancements and partnerships to gain an edge over competition and benefit from market growth.
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