Innovative connected, shared, electric and autonomous technologies set to energize market prospects

The global sales of passenger vehicles increased marginally by 400,000 units, with the Volkswagen Group retaining its position as the global best-selling brand. However, trade standoffs and the rapid adoption of new mobility models will result in flat growth of the market this year, finds the Global Automotive Industry Outlook, 2019.

The sale of vehicles in China dipped for the first time in 20 years. This, along with the decline in European sales, hurt industry sentiments in 2018. However, growth in India and in Latin American (LATAM) markets balanced out subdued global sales trends.
A shake up in global trade balance in 2019 is expected to negatively impact new vehicle production and sales, thereby prompting Original Equipment Makers (OEMs) to embark on more alliances and post-purchase offers.

Trade tensions to hit China

For the first time in two decades, vehicle sales fell in China. From about 27.3 million units in 2018, sales are expected to revive marginally to 27.4 million units in 2019. Rapid growth over the past several years will taper off. This will be result of the growing popularity of car sharing and ride sharing applications. For example, in China, an electric car sharing service is available at $70 per week, with a maximum driving range of 500km. Another factor for slowing growth is trade tensions. In 2018, the ongoing tariff war with the U.S. affected vehicle sales in China. Nevertheless, sales are expected to register a slight uptick in 2019, bolstered by the growth in the sales of electric vehicles (EVs).

Volkswagen maintained its market leadership in China, closely followed by GM. Approximately 30% of the LV market was held by Volkswagen (sales up by 2.0%) and GM (sales down by 3.0%). RNMA and Honda registered significant growth in sales.

In 2018, China also became the first country to sell over a million EVs, constituting 55.5% of the global market share of electric vehicle sales. Tesla became the first company to set up a plant in China, which is wholly owned by a foreign entity. It is expected to have a production capacity of 500,000 vehicles and batteries by 2022. China will continue to lead the EV market in 2019 with over 58% global share, followed by Europe and North America.

High unemployment rates, low sales in the U.S.

Higher fleet deliveries and high unemployment rates resulted in 0.6% sales growth in 2018, representing an increase from 17.24 million in 2017 to 17.33 million in 2018. The LV market for Internal Combustion Engine (ICE) vehicles continues to remain saturated. GM dominated with 17.0% of the market in 2018, followed by Ford at 14.3%, Toyota at 14%, and FCA at 13.0%. Despite higher interest rates, more vehicles were financed and leased in 2018. A moderate decline in sales is expected in 2019.

Automakers are formulating strategies to deal with the ongoing shift in consumer preference away from passenger cars, especially ICE sedans. However, some automakers such as Nissan with their Altima are planning to launch semi-autonomous safety functions in an effort to revive falling sedan sales. The United States-Mexico-Canada Agreement (USMCA) will define new, stricter rules of origin and trade in the North American region in 2019. According to its provisions, 75% of the vehicle must be manufactured within member-countries. Earlier, the ceiling was 62.5%.

Strong growth in India

The Indian automotive market saw strong growth, driven by an expanding economy. Light Vehicle (LV) sales increased 6.3% to reach 4.0 million units in 2018. However, demand for cars and SUVs was flat in the last five months of 2018. This trend will persist as 2019 is expected to be a poor year in terms of sales owing to the past eight months of poor sales, the lowest in a decade.

Slowdown in emerging markets

The sales of new vehicles in countries such as Thailand, Turkey and Slovakia are expected to marginally reduce in 2019, owing to increased vehicle costs, stronger public transport networks, and more mobility options. In other emerging markets such as Argentina and Mexico, new car sales will rise slowly. Sales in emerging economies are projected to account for 8.1% of the global LV market in 2019. Eastern Europe will continue to be a strong contributor to this volume.

Electric start for the sector

About 2 million EVs were sold globally in 2018, recording a market growth of 57.3% compared to the previous year. Of this, 68.7% were battery electric vehicles (BEVs) and 31.3% were plug-in hybrid EVs (PHEVs). China retained its market leadership for the 5th consecutive year with a 55.5% share, selling approximately 1.1millon EVs (75% of which were BEVs and 25% PHEVs).

Approximately 2.4 million hybrid EVs (HEVs) were sold globally which includes both mild and full hybrids. APAC accounted for 60.3% of these sales, followed by Europe with 22.0%. The growth of EVs is expected to increase further owing to new model launches and more stringent government regulations. More than 43 models are confirmed to be launched in 2019, of which 25 will be BEVs and the remainder PHEVs.

The Tesla Model 3 is expected to be a top ten best-selling car in the U.S. For the first time, it emerged as the market leader with the launch of Model 3. Tesla sold the highest number of cars constituting to 11.8% of the total China market closely followed by BYD with a11.3% market share.

There are more than 270 EV start-ups around the globe, with NA and Europe hosting the highest number of them. Electric mobility options are expected to become more popular, especially in ride sharing and micro-mobility solutions. Basic autonomous technology offering closed environment services are also expected to penetrate this domain.

In 2018, most Latin American countries consolidated important incentive programs and regulations to promote the deployment of EVs. This incipient market was driven mainly by utility companies and other corporate fleets, e-taxi programs and e-bus programs, some nascent car sharing initiatives and, most importantly, the luxury vehicle segments comprising mostly PHEVs. Mexico leads the electric PV market in the region, with approximately2.6 thousand BEVs and PHEVs sold in 2018, and approximately15.7 thousand HEVs.

Over 2.8 million EVs are likely to be sold globally in 2019 in which 68% will be BEVs and 32% will be plug in hybrids. The EV market will account for 3% of the total passenger car market in 2019.

Autonomous vehicles on fast track

Software powered automobiles are expected to be one of the top trends to watch out for in 2019. Automotive manufacturers, mobility service providers, and autonomous technology companies are working in multiple collaborations with the aim of accelerating the development of autonomous shared transportation. Autonomous shuttle pilots are being actively trialed and deployed in various cities across the world with companies like Navya and EasyMile being some of the key suppliers. Level-3 autonomous technology is expected to peak at 35% of the total autonomous car market by 2026.

Samsung revealed plans for a new Bixby supporting infotainment system while Panasonic announced that it would be bringing Amazon Alexa to its Skip Gen IVI in-car infotainment platform. Garmin’s Speak Plus dash cam, with Alexa integration, will offer hands-free control for in-car navigational and entertainment streaming functions.

Declining sales in the U.S. market and marginal increases in the Chinese market will flatten new car sales globally in 2019. However, technological advances in connected, shared, electric and autonomous technologies will create a sense of continued optimism.

For more information on the Global Automotive Industry Outlook, 2019, please contact Viroop Narla, Team Leader – Automotive & Transportation Practice, Mobility at


Rajalakshmi Rajendran, Content Manager - team

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