Luxury SUV Market size was over USD 5 Billion in 2023 and is expected to reach USD 16 Billion by the end of 2036, growing at around 12% CAGR during the forecast period i.e., between 2024-2036. In the year 2024, the industry size of luxury SUV is estimated at USD 7 Billion.
The reason behind the growth is the increasing production of automobiles across the globe, leading to more options in the luxury SUV landscape. According to the International Organization of Motor Vehicle Manufacturers (OICA), the estimated world vehicle motor production in the year 2023 was approximately 93546599 units. Global auto sales, on the other hand, grew significantly in 2023, and future growth is expected as a result of heightened consumer interest, new government regulations, and industry support.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
12% |
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Base Year Market Size (2023) |
USD 5 Billion |
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Forecast Year Market Size (2036) |
USD 16 Billion |
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Regional Scope |
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Sales Channel (Franchised Dealer, Independent Dealer)
Franchised dealer segment is estimated to dominate luxury SUV market share of over 77% by 2036. The segment growth can be attributed to the increasing rate of franchised dealerships. The franchise dealership business model has significantly impacted global auto sales during the last century and has continued to be a significant economic cornerstone since these companies are authorized and permitted to sell automobiles as a major automaker's direct representatives.
Expert mechanics at franchised dealerships are capable of providing a special combination of advantages that meet a variety of customer needs to distinguish themselves in the luxury SUV market with their assurance of authenticity and quality as well as their extensive assistance and customer care.
Franchised dealers sell new automobiles such as luxury SUVs since it is a profitable business model for manufacturers, local communities, and customers. Moreover, they offer financing and leasing options in addition to a large selection of new and used cars and provide unmatched dependability and quality assurance for their vehicles, which customers can rely on.
Luxury car brands are elevating their exclusivity game, making them more reliable. The franchise dealer business model has grown in popularity as a means of purchasing and maintaining automobiles, leading to an increase in the number of brand dealerships worldwide. The BMW brand is represented by over 4,400 dealers in 150 countries.
Furthermore, due to their minimal overhead, independent used automobile dealers frequently provide the cheapest deals available, which only sell used automobiles as they do not have the overhead costs involved with franchise dealers, and may cause lesser operating expenditures than other dealers, which could lead to lower prices.
Fuel Type (Gasoline, Diesel, Hybrid/Electric)
The hybrid/electric segment in the luxury SUV market is set to garner notable revenue in the coming years. The growth of the segment can be propelled by the increasing launch of hybrid variants. Sales of battery-electric, plug-in hybrid, and hybrid luxury SUVs have surged in recent years as the future belongs to electric vehicles, and manufacturers are introducing more of them to their portfolios every year to reduce pollution.
For instance, Hyundai Motor Co. announced the introduction of hybrid vehicles under its premium brand Genesis, which includes the GV60, GV70, and GV80 sports utility vehicles in addition to the G70, G80, and G90 sedans to boast lower pollutants and better economy and to increase their profit margins more than other vehicle types.
Product (Mini, Compact, Mid-Size, Full-Size)
By 2036, the mini segment is predicted to witness significant luxury SUV market share owing to the rising introduction of new models. In November 2023 Toyota introduced a compact SUV in India, the Land Cruiser 250 series with its choices for an electric and hybrid drivetrain, and is expected to pose a serious threat to Thar and Jimny.
Our in-depth analysis of the luxury SUV market includes the following segments:
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Fuel Type |
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Sales Channel |
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Product |
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Application |
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APAC Market Statistics
Asia Pacific in luxury SUV market is poised to account for around 45% revenue share by 2036. The region’s luxury sector is flourishing, since a growing number of new automobile purchasers are selecting luxury SUVs due to rising personal disposable income. The region's economy is predicted to increase modestly in the coming years, with consumer spending shifting toward discretionary items. In real terms, the total disposable income is expected to double between 2021 and 2040, quicker than in any other region, according to a report released by Euromonitor International.
The luxury SUV market has expanded in China as a result of the country's robust economic growth and increased disposable income. For instance, in 2023, the disposable income per capita of Chinese citizens rose by more than 6%.
The South Korean automotive business has undergone extraordinary growth, with Korean SUVs emerging as showcases models, resulting in increased sales. SUVs have recently gained popularity in the country, accounting for more than 65% of local passenger car sales in 2022.
Japan is known for being a global leader in the production of automobiles because it is home to automakers such as Daihatsu, Mitsubishi, Mazda, Suzuki, Subaru, Honda, and Nissan, as well as a large number of companies that manufacture motors, motorbikes, ATVs, cars, electric vehicles, and construction vehicles. As a result, there is increased demand in the area for luxury SUVs. As per the statistics, the number of passenger cars produced in Japan increased to over 7 million in 2023 from around 6 million the year before.
North American Market Analysis
North American luxury SUV market revenue is anticipated to cross USD 276 Billion by the end of 2036, owing to the increasing popularity of luxury SUVs in this region.
Luxury SUVs are especially well-liked by people with busy lifestyles and families in the United States, driven by several variables, such as the need for status and prestige, cutting-edge technological features, and exceptional performance. Moreover, customers in the US place a high value on luxury vehicles since possessing a luxury vehicle is regarded as a status symbol, and they value the enhanced performance and driving pleasure that luxury automobiles provide.
In Canada, premium and luxury car sales are anticipated to increase in the online space, where luxury manufacturers such as Mercedes-Benz, Audi, BMW, Jaguar, Ford, Bentley, Land Rover, Maserati, Nissan, Lexus, Toyota, Volvo, and Porsche have established a notable presence by providing a varied selection of sedans, and luxury SUVs, to suit a wide range of tastes.
The luxury SUV market is dominated by key market players who are gaining traction in the market by adopting several strategies including mergers and acquisitions.
Author Credits: Saima Khursheed
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