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The global luxury car market size was USD 449.7 billion in 2019 and is projected to reach USD 655.0 billion by 2027, exhibiting a CAGR of 9.3% during the forecast period.
At present, the luxury car market as a whole is undergoing social changes such as the modern lifestyle and the adoption of the latest technologies. Luxury brands seem to have a lower degree of remoteness, differentiation, and exclusivity towards the improvement of the quality of life. As a result, competition between these brands has intensified for gaining a higher brand identity. With enhancements in product standards, people’s perception of the car’s brand image plays a crucial role in their purchasing decision. High-end brands such as BMW, Mercedes-Benz, and Lexus must form attributes and values that would reflect the ever-changing social values, which would further affect the buyer emotionally.
COVID-19 Pandemic to Decline Growth Backed by Consumers’ Focus on Saving More
The COVID-19 pandemic has had a drastic impact on the globally integrated automotive industry. Industry experts project that as compared to the mass car segment, the market will face greater resistance because customers will save cash and reduce purchases in the future. Potential luxury vehicle buyers will first focus on establishing and getting their business back on track, and then they may buy cars in the short term.
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Introduction of Electrified and Autonomous Cars is a Crucial Trend
Rapid advances in several fields, such as artificial intelligence and machine learning have subsequently led to advances in autonomous vehicles. The growth in research and development of the electrification of vehicles is one of the leading trends in the luxury vehicle industry. This factor is likely to augment the growth of this market. Additionally, the rapid development of various features, such as personal voice assistance, autonomous driving, and retina recognition, is also expected to promote the sales of luxury vehicles.
Rising Adoption of the Electric Luxury Cars to Drive Growth
With the increasing concern for the environment and environmental protection, governments all over the world are tightening the emission standards for vehicles. As a result, the demand for environmentally friendly and sustainable transportation, such as electric vehicles is rapidly growing. Governments of various countries are also providing higher subsidies and incentives to these car owners.
Also, owing to the increasing disposable income and high net wealth of individuals, the preferential shift of end-users to choose luxury brands is gradually surging.
Increasing Demand for Pre-owned Luxury Cars to Aid Growth
According to car dealers, the demand for pre-owned luxury vehicles is continuously growing because these cars are frequently sold after one or two years of usage by owners for the reason of getting better models and upgrades. In order to meet the growing demand, the used luxury vehicle market is becoming more systematized, with easy access to financing, lower entry prices, and annual maintenance contracts.
All these factors would lead to the widespread adoption of luxury cars.
High Product Cost May Hinder Market Growth
As compared to conventional vehicles, luxury vehicles are very expensive in nature owing to their luxurious and advanced features, such as high-quality parts and expensive materials. Additionally, the cost of manufacturing cars with luxurious features and options is higher than the cost of manufacturing them with universal features. In addition to this, as the sales of luxury cars are very low, a large part of the selling price is used to pay for their development, making these types of cars more expensive. Therefore, the high cost of luxury vehicles is expected to hamper the market growth.
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Sedan Segment to Hold the Largest Share Fueled by Its High Production & Sales
Based on the vehicle type, the market is segmented into the hatchback, sedan, and sport utility vehicles. The sedan segment accounts for a major share in the global market owing to the high sales and production of luxury sedan. The sport utility vehicle segment is also expected to show exponential growth in the market over the forecast period owing to the rising demand for luxury SUVs among consumers.
ICE Segment to Dominate Stoked by High Demand for These Vehicles
Based on the propulsion, the market is segmented into ICE and electric. The ICE segment holds the largest share in the global market owing to the rising demand and sales of these luxury vehicles globally. However, the electric segment is also expected to experience an astonishing growth in the market owing to the surging inclination of consumers towards luxury electric cars due. This is occurring because of the rising deployment of stringent emission regulations by governments.
Asia Pacific Global Luxury Car Market Size, 2019 (USD billion)
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The market size in Asia Pacific stood at USD 231.8 billion in 2019. The region is likely to maintain a dominant position over the forecast period. At present, China has the highest growth potential amid all the developing countries in this market. Luxury vehicle automakers such as BMW AG, Audi, Lexus, Mercedes-Benz, and Volvo have upheld positive growth in the Chinese market. It is also projected that the market in North America will show considerable growth owing to the increasing demand for comfort and luxury in vehicles. It is estimated that Europe will exhibit significant growth in this market. This region is home to many vehicle manufacturers who often develop vehicles equipped with the latest technology.
Daimler AG is the Top Player Owing to its Ability to Provide High-end Automobiles
Daimler is one of the largest commercial vehicle manufacturers and the world's largest manufacturer of high-end automobiles, with operations all over the world. The company provides financing, leasing, insurance, innovative mobility services, and fleet management. It owns Mercedes-Benz vans, cars, Daimler buses and trucks, and mobility divisions.
An Infographic Representation of Luxury Car Market
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The global luxury car market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD Billion) & Volume (Million units)
By Vehicle Type
By Propulsion Type
Fortune Business Insights says that the global luxury car market size was USD 449.7 billion in 2019 and is projected to reach USD 655.0 billion by 2027.
In 2019, the Asia Pacific luxury car market value stood at USD 231.8 billion.
The luxury car market is projected to grow at a CAGR of 9.3% in the forecast period (2020-2027).
The ICE segment is expected to lead this market during the forecast period.
The rising adoption of electric luxury cars is expected to drive market growth.
Daimler AG is the major player in the global market.
Asia Pacific dominated the market in terms of share in 2019.
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