Global SUV market is further classified on the basis of region as follows:
Global SUV market is anticipated to register a CAGR of 11.2% over the forecast period 2018-2027. Additionally, the market of SUV sales is projected to reach 53.2 Million units by 2027 from 26.8 Million units registered in 2017. This significant growth of the SUV market can be attributed to rising awareness about the advantages of SUV such as more cargo space, off-road capabilities and others. Further, development and manufacturing of advance light truck vehicle is expected to strengthen the growth of SUV market.
In the regional platform, Asia Pacific is the largest market in the term of market share of overall SUV market. Further, Asia Pacific countries such as China and Japan are expected to continue its dominance over the forecast period. The market of SUV is majorly driven by the rising demand for heavy passenger vehicle in SUVs segments. Asia Pacific is expected to contribute significant revenue to global SUV market during the forecast period. Growing replacement needs are anticipated to generate sustainable demand for SUVs in the upcoming years. Europe SUV market is expected to grow at a significant pace over the forecast period. Further, the market of SUV in North America is projected to grow at highest CAGR during the forecast period. The demand for SUV in North America is expected to get escalated by the ongoing automotive modernization programs. Increasing automotive spending by population is envisioned to positively impact the growth of SUV market. Moreover, rising standard of living in Asia Pacific countries is expected to fuel the demand for SUV during the forecast period.
Increasing demand and sale of the light truck and off road car is anticipated to be the key factor behind the growth of the SUV market. Further, rising disposable income coupled with increasing purchasing power of the population is resulting in more demand of the automotive. This factor is likely to boost the growth of the automotive market over the forecast period. SUV cars market is primarily driven by the adoption of the diesel SUV cars in the populated cities across the globe. In future, electric SUV cars are anticipated to drive the growth of the market. Further, the rapid pace of urbanization and growth in the automotive industry is expected to positively influence the SUV car industry.
There are some countries that showcase the markets where SUVs still have big growth potential. This is particularly the case with Argentina, Malaysia, Turkey, Brazil, Mexico, India and South Africa, where the SUV’s market share is still under 28%, but growth is quite fast. Car sales in these seven markets totaled 10.2 Million Units – or around 10% of the global total SUV sales and SUVs market share was 20.6%, leaving a lot of room for further growth. Moreover, the automotive car manufacturers are trying to cater to the metropolitan ways of life of consumers and are adding appealing features to the cars. Therefore, the manufacturers in order to meet the rising needs of the consumers are diversifying their product portfolio. This factor is believed to growth of the market.
The SUV market is expected to grow at a higher pace in North America, Asia Pacific and Europe. The growing demand for sub-compact SUVs can be attributed to the various advantages offered by the vehicle segment, including greater fuel efficiency than passenger cars due to its small engine, compact body (as compared to full-sized SUVs) and excise duty rebate in a majority of countries. In India, sub-4 meter vehicles have 8% excise duty, compared to 27% for vehicles that are over 4 meters in length. In contrast, high cost of the light truck SUV cars is anticipated to hinder the growth of the global SUV market. On the other hand, lower fuel efficiency is very high as compared to other vehicle and it also burns more gas, which leads many to refer it gas “guzzler”. In many countries SUV cars has also increased the car insurance rates because of increased risk of accidental cases.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.