Global Automobile Industry Impacting Economy Growth.

The global automotive industry is the major contributor to the global manufacturing industry. It is one of the world's largest industries by revenue. It is also the industry with the highest spending on research & development. For many decades US has led the production market of the automotive industry. But with time almost all regions and countries GDP is highly dependent on the automotive industry of the nation. In 2021, 79.1 million motor vehicles were produced around the world, an increase of 1.3% compared to 2020.The overall vehicle production of passenger cars increased in the year 2021 by 2% as compared to the year 2020. Asia-Pacific region saw an increase in production by 7%, Africa by 8%, but North America and Europe saw a fall in the production of passenger vehicles by 10% and 7% respectively in the year 2021.

COVID-19 Impact: The COVID-19 restrictions that resulted in a double-digit decline in sales due to the suspension of vehicle production and sales worldwide also had a significant negative impact on the automotive industry. Later in 2020, the market was also negatively impacted by supply chain disruptions, which are anticipated to persist into 2021. However, the auto industry is recovering faster than expected, partly due to consumer trends favoring personal mobility over shared and public transit.

Impact of Russia Ukraine War: The ongoing Russian-Ukrainian situation has caused neon gas costs to increase tenfold, which may have an effect on Asia-Pacific automakers' ability to produce vehicles. In addition, the supply of palladium needed to make autos will be restricted by the sanctions placed on Russia. The production, sales, and delivery of autos are then expected to increase as a result.

Further Key Findings

• Artificial Intelligence:  Artificial intelligence (AI) application in automobiles enables drivers to improve safety. Several contemporary vehicles, such as the 2022 Toyota Tundra, use this technology and automatically turn on their lights when it is dark. Headlights fade when they detect approaching vehicles. This is because automatic beam control is made feasible by artificial intelligence. It aids in enhancing a driver's field of vision while driving, improving traffic safety.

• Growing Middle-Class Population: Global middle-class population is on a significant rise since 2016 with the major contribution by Asian countries including India and China. Approximately half population of the world lies in the middle class, and stood at 5.85 million people in 2020, according to the World Bank estimates. With the high growth in the middle-class section of the population, the global consumption level is also expected to increase since two-thirds of the consumption level belongs to the middle class only. This will result in an increased demand for motor vehicles in the coming years.

• Increasing Demand for Small Car segment: Covid-19 has changed the real meaning of mobility. Carmakers are noticing an increase in requests for smaller four-wheelers as more consumers seek personal automobiles as their main means of transportation. With sales dropping 6% to just under 20 million vehicles, China remained the world's largest and best-performing single country in the small car market.

• Increasing Demand for Electric Vehicles: The new trend in the global automotive industry is moving towards the increased production and sales of electric vehicles and hybrid vehicles across all regions. The rise In Innovative Subscription-based Vehicle Usership (Not Ownership) Models has also become a key trend in the global automotive industry. New car sales might be in trouble during boom times for used cars in 2021. Growth will be helped along by the rising appeal of online used car retail.

Makreo Research has published a study on the Automobile industry, a report titled “Global Automobile Industry Production and Demand – Regional Trend Assessment” is a detailed study that covers regional assessment also. The report offers production and sales facts and analyses market trends and future prospects. It is imperative to understand the shifts happening in the automobile industry after series of events for instance: the US-China trade war, COVID-19 outburst, Russia-Ukraine War, Inflation in the US, and semiconductor chip shortage.

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