Luxury Car Market Size, Share & Trends Analysis Report By Vehicle Type, By Propulsion Type (Internal Combustion Engine, Electric), By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global luxury car market size was valued at USD 617.36 billion in 2022 and is expected to expand at a CAGR of 6.9% from 2023 to 2030. The increasing number of ultra-high-net-worth individuals and increasing disposal income are driving the market growth. Moreover, the increasing adoption of electric vehicles (EV) offers significant growth opportunities.

The COVID-19 outbreak had a negative impact on the industry. The pandemic and the measures that were implemented to fight it caused the global economy to contract by around 4% in real terms. According to the German Association of the Automotive Industry (VDA), the global car market contracted substantially by around 15% in 2020.

According to the European Automobile Manufacturers’ Association (ACEA), private vehicle registrations in Europe were contracted by 38.1% year-on-year for the first half of 2020. China is one of the most important markets for the luxury car segment. Economic growth was considerably less dynamic in China due to the government’s rigorous zero-covid strategy, regulatory interventions, a more restrictive monetary and fiscal policy, a shortage of energy, and a slowdown of the property sector.

As governments throughout the world tighten emission standards, EVs are anticipated to be a component of their sustainable transportation plan, with greater incentives and subsidies being provided to car owners. Luxury original equipment manufacturers (OEM) focus on next-generation smart mobility technology solutions such as personal voice assistance, autonomous driving, retina recognition, and air gesture recognition. It is also expected to boost sales.

Customer expectations for luxury cars have been evolving rapidly. At present, luxury car buyers look for a highly personalized, exclusive sales & service experience. Many buyers seek a mix of seamless customer experiences that includes omnichannel reach, simplicity, experiential diversity, and customization.

Vehicle Type Insights

Based on vehicle type, the market is segmented into hatchback, sedan, and sport utility. The sport utility segment held the maximum revenue share of 57.6% in 2022 and is expected to register a CAGR of 7.3% during the forecast period. The growth of the segment can be attributed to the greater customer preference for sport utility vehicles owing to several factors such as convenience, perceived safety, practicality, and styling.

The hatchback segment is expected to expand at the second-highest CAGR of 6.8% during the forecast period. The increased disposable income of consumers, the new model launches, and the easy availability of loans are driving the market for this segment. Japanese luxury car brand Acura launched its 2023 Acura Integra sporty compact hatchback in 2022.

Propulsion Type Insights

Based on propulsion type, the market is segmented into internal combustion engine (ICE), and electric. The internal combustion engine segment accounted for the largest revenue share of 70.2% in 2022 and is estimated to expand at a CAGR of 6.5% during the forecast period. Easy availability of IC engine vehicles, low cost of ownership, and high performance are the factors driving growth of the segment.

The electric segment is likely to expand at the fastest CAGR of 7.8% throughout the forecast period. This can be attributed to the government’s efforts to accelerate decarbonization, and policy support such as tax breaks, local subsidies, financial incentives, & exemptions from purchase limitations. According to the International Energy Agency, in Europe, electric car sales continued to grow in 2021 by more than 65% year-on-year to 2.3 million vehicles.

Regional Insights

Europe dominated the market with a share of 39.3% in 2022 and is anticipated to expand at a CAGR of over 6.1% during the forecast period. Factors such as the established automobile market, and the presence of numerous automobile companies are driving the market growth in the region. Moreover, the advanced automotive manufacturing industry along with favorable government policies aiding market growth in the region.

Asia-Pacific is expected to expand at the highest CAGR of 8.2% during the forecast period 2023-2030. The market enlargement across the region can be attributed to growing prosperity and disposal income with changing consumer habits, government incentives for electric vehicles, and increasing corporate profits in the region.

Key Companies & Market Share Insights

The competitive landscape of the luxury car market is concentrated with a few market players dominating the market. The key participants are adopting strategic initiatives such as acquisition, expansion, and product launches.

In March 2021, Volvo Car Corporation announced a joint venture with ECARX for the development of an advanced infotainment system. This joint venture is expected to benefit both companies, as it would enhance technological development and produce a cost-effective infotainment system.Some prominent players in the global luxury car market include:

• Mercedes-Benz Group AG

• BMW Group

• Volkswagen

• Tesla

• TOYOTA MOTOR CORPORATION (Lexus)

• Volvo Car Corporation

• Aston Martin

Luxury Car Market Report Scope

Global Luxury Car Market Segmentation

This report forecasts revenue growth at global, regional, and country levels in addition to provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global luxury car market report based on the vehicle type, propulsion type, and region:

• Vehicle Type Outlook (Revenue, USD Billion, Volume, Thousand Units, 2017 - 2030)

  • Hatchback

  • Sedan

  • Sports Utility

• Propulsion Type Outlook (Revenue, USD Billion, Volume, 000’ Units, 2017 - 2030)

  • Internal Combustion Engine (ICE)

  • Electric

• Regional Outlook (Revenue, USD Billion, Volume, 000’ Units, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa