The passenger car market in the US is one of the largest automotive markets in the world. With the high fuel prices and the world petroleum crisis, the market has become more like the European market with fewer number of large passenger cars on the road and more number of smaller cars. The number of passenger cars models in the US has grown exponentially in the past decade.
Definition / Scope
- Passenger Car market in the US is one of the established markets for passenger cars across the globe
- Although the established markets of the US will not be able to compete with the growth rates of establishing markets, however it will still be one of the most important global sales regions after China
- There will be optimistic annual sales growth rate of passenger cars in the US, however there will only be a slow path of recovery, compared to the sales peaks they attained in the early 2000s
Market Overview
- The passenger car market in the US had a market size of 7.69 million units in 2014, in terms of sales
- The market is expected to grow at CAGR of 7.66% for the next five years 2015-2019
- In 2014, the passenger car unit sales in the US were 11.83%[3] of the total passenger car sales globally
- Small and mid-size passenger cars were the second and third best selling vehicles in the US. On The other hand, large-size passenger were the only segment to see a decline in sales in 2014, from the previous year 2013
- Passenger car weight trend in the US has been flat, however the vehicle power trend is increasing
Market Risks
- Distracted Driving: Digital technology has created a connected culture in the passenger car market in the US. Managing this high end technology in passenger cars is getting difficult (even after developing Driver Focus Design Guidelines). The increasing usages of features such as in vehicle telematics and navigation systems are creating distraction for the drivers, increasing accidents on the road
- Tightened new fuel economy standards will confront end consumer expectations for increased vehicle content at constant prices
- Increasing cost of raw materials such as aluminum, steel, petroleum, and labor
Top Market Opportunities
- Focus on Alternate Fuel Passenger Cars: The passenger car manufacturers in the US are adopting more integrated approach towards vehicles production. For instance, in order to achieve greater energy security, automotive manufacturers are producing advanced diesels, hybrids, biofuel powered vehicles, electricity and hydrogen based vehicles. As a result, consumers in the market also prefer alternative fuel vehicles, including hybrids, clean diesel, flex-fuel models, and electric vehicles
- Catering to consumer needs with more vehicle content, at same price
Market Drivers
- The US has entered into a number of international agreements that are important to the motor vehicle industry:
- United States-Japan Automotive Framework Agreement
- North American Free Trade Agreement
- Korea’s Memorandum of Understanding
- General Agreement on Tariffs and Trade
- Agreement on Global Technical Regulations
- Increasing Passenger Car Fuel Economy: The automotive manufacturers in the passenger car market in the US are inclining towards the production of such vehicles which support fuel economy and carbon dioxide standards to increase fuel economy of vehicles, without negatively effecting on affordability, jobs, auto safety and the range of vehicle sizes
- Adoption of Safety Features in Passenger Cars: The market is inclined towards usage of passenger cars which have greater safety innovations without a government mandate, such as adaptive headlights, anti-lock brakes, advanced collision avoidance features electronic stability control, front passenger safety belt reminder systems, electronic roll mitigation, side airbags and curtains
Market Size and Forecast
Market Outlook
- By 2025, it is expected that smog-forming emissions of hydrocarbons and nitrogen oxides from passenger cars in the US will drop by 99.8%[3] since emissions controls began
- By 2030, passenger cars are anticipated to contribute only 1.2%[3] of all smog-forming emissions
- The increased usage of driverless passenger cars will be the catalyst for transforming vehicular travel in the US in the years to come
Competitive Factors
- The passenger car manufacturers should indulge into development of alternate power trains
- Focus on expansion of innovative product portfolio to meet local demands
- Safety inclination, customization, entertainment, and communication
- Control over cost volatility because of increase in material costs
- Control over position in the increasing competitive landscape
Key Market Players
- The US is home to the three largest vehicle manufacturers in the world: General Motors, Ford Motor Company and Chrysler.
- GM’s domestic automobile offerings – (Chevrolet, Pontiac, Oldsmobile, Buick, Cadillac, GMC Truck, and Saturn) and international automobile offerings – (Opel, Vauxhall, Saab, Lotus, and Isuzu)
- Ford’s brands: Mercury, Lincoln, Explorer
- Daimler Chrysler brands include: Dodge, Eagle, Jeep, and Plymouth
References
- OICA
