Luxury Cars Market Size, Share, Analysis & Report 2023-28 (2024)

By Vehicle Type (Sedan, SUV and Hatchback), By Drive Type (IC Engine and Electric Vehicle), By Size of Vehicle (Premium compact segment cars, Entry level luxury/ Compact executive ...cars, Mid-size luxury/executive cars, High end luxury/full size luxury cars, Ultra luxury cars and luxury SUV/ crossover vehicle market, Performance luxury market), By Engine Capacity (Upto 3,000 cc and Above 3,000 cc), By Region ( North America, South America, Europe, Middle East, Africa and Asia-Pacific), By Country (United States, Canada, Brazil, Argentina, France, Germany, UK, Italy, China, India, Japan, UAE, Saudi Arabia, South Africa), By Company (Volkswagen Group, Tata Motor Ltd., Tesla Inc., General motors Co., Ford Motors Co., Audi AG., Toyota Motors, Porsche, Others) Read more

• Automotive
• Mar 2023
• Pages 198
• Report Code AT66003

Market Definition

Luxury cars are vehicles with the most advanced features & applications & exhibit top-quality materials to offer passengers extraordinary comfort & ease. These stand-apart vehicles have superior-quality interiors, leather seats, brilliant suspension, advanced sensors, cameras, & maps, among others, offering optimal safety & service and enhanced overall performance of a vehicle.

Market Insights & Analysis:Global Luxury Cars Market (2023-28)

The Global Luxury Cars Market is projected to grow at a CAGR of around 5.12% during the forecast period, i.e., 2023-28. The growth of the market is likely to be driven primarily by the booming automotive industry worldwide, backed by the burgeoning demand for autonomous vehicles, increasing urbanization, growing disposable incomes of people, and rising safety concerns among vehicle owners. Besides, government initiatives toward promoting the uptake of EVs (Electric Vehicles) as a green mobility option due to the growing environmental consciousness in light of alarming levels of carbon emissions are also instigating consumer inclination toward premium vehicles and, in turn, augmenting the market expansion.

Moreover, the mounting demand for used luxury vehicles is another opportunistic area for the luxury car industry. These cars are being sold frequently after one or two years of usage as owners seek upgrades & better variants. With easy finance options, economical entry prices, & AMCs of such vehicles, the as well as in order to meet the growing demand, pre-owned luxury vehicles are gaining traction and, as a result, propelling the overall market growth.

Market Dynamics

Key Driver: Extensive Rush in the Demand for Comfortable Driving Conditions & Added Premium Features

The expensive vehicles come with capabilities that make driving a better experience, such as intelligent remote entry, satellite radio, and adaptive cruise control. Other than this, contemporary innovations, premium materials, and robust engines are the essential components utilized in the manufacturing of luxury automobiles, making the majority of people inclined toward these vehicles. Besides this, luxury automobiles also have amenities like active suspension, executive rear seats, remote starting, and massaging seats for a better and more pleasant ride.

Furthermore, customers are becoming more intrigued by cutting-edge items offering comfort, such as champagne chillers, reclining seats, etc. Thus, incorporating the most luxurious and comforting features provides luxury brands with a growing opportunity to invest more in innovative variants and witness tremendous growth in the coming years, notably during the anticipated timeframe.

Possible Restraint: High Purchasing Car Value & Exorbitant Maintenance Charges

One of the leading factors that hold the potential to hinder the growth of the market is the high purchasing value and expensive charges spent on maintenance. The financial burden incurred by such cars makes buyers question their affordability over mid-value cars, as luxury cars are equipped with advanced technologies and more premium features, usually associated with royalty. This may result in the sales being restricted to the privileged population, consequently impeding the further expansion of the market for the coming years.

Growth Opportunity: Strengthening Collaborations & Ventures Among Several Car Brands

Over the years, car brands have been competing with each other to dominate the premium car market. Their consistent actions of launching a new car or rigorous modification more often are the crucial elements likely to present the market with more remunerative opportunities for luxury car makers.

Apart from this, the market's significant growth depends on more global audiences fulfilling their ambitions of owning premium cars. As a result, luxury car brands worldwide have ventured along to develop vehicles that can attract car enthusiasts, or offering subsidies, thereby elevating sales. For instance,

In March 2023, the Audi-marque joint venture between China's FAW Group and Germany's Volkswagen, FAW-Volkswagen Audi, shared plans to offer financial assistance to Chinese car dealers to assist them in shifting their inventory. According to the China Association of Automobile Manufacturers, the inventory-to-sales ratio for luxury car brands in China increased to 1.4% in February from 1.3% in January 2023.

Key Trend: Rising Global Prominence of Luxury Electric CarsWorldwide with Favorable Government Initiatives

The rising prominence of luxury electric cars is emerging as the key trend in the market. As a result, a considerable amount of the global population has diverged their interests toward purchasing an electric luxury car worth full of features, paving the way for more models to arrive in the coming years, particularly in developing years. For example,luxury car makers in India are all set to launch several electric vehicles soon as they bet on EVs accounting for up to 25% of their sales in the country in the next couple of years, up from low single-digit shares in 2022. Interestingly, Audi, Mercedes, and other luxury electric cars made it to the top even when priced higher than petrol and diesel vehicles.

Other than this, the benefits offered by the government, such as earning incentives by being a buyer, and the establishment of more charging stations along with Hydrogen fuel stations, have also swiftly elevated the sales of electric variants. Additionally, the more considerable lifespan of the vehicle compared to fossil-fuel cars, zero-emission vehicles through tax rebates and subsidies, and strengthening security features are some of the crucial aspects again encouraging its adoption.

Market Segmentation

Based onVehicle Type:

• Sedan
• SUV
• Hatchback

Here, Luxury SUVs are projected to register a higher CAGR than their peers in the global market during 2023-28. It owes to the perceived safety, convenience, styling, and practicality offered by these cars, coupled with the ever-increased consumer requirements for enhanced safety & comfort due to the growing incidence of road accidents & fatalities worldwide. Luxury SUVs provide a very high degree of safety & security to commuters. To cater to the mounting consumer demand for these cars, more & more automakers are actively working on equipping their product offerings with the latest technologies in terms of both safety & security features. Hence, these trends are making luxury SUVs increasingly popular & in demand globally, which project remunerative prospects for the luxury cars industry in the coming years.

Based onDrive Type:

• ICE (Internal Combustion Engine)
• Electric Vehicles

Here, ICE currently dominates the Global Luxury Car Market. However, the demand for such vehicles is likely to reduce gradually in the future owing to the growing penetration of EVs in light of stringent norms toward curbing carbon emissions across different countries worldwide. As governments & private associations are tightening emission regulations, the need for sustainable & environmentally-friendly transportation like EVs is increasing at a significant pace, where incentives & subsidies are also being provided to buyers. Trends like autonomous driving, advanced telematics, personal voice assistance, and retinal recognition are further infusing EV sales globally, which indicates a lucrative future ahead for the Luxury Cars Market in the EV segment.

Regional Projection

Geographically, the Global Luxury Car Market expands across:

• North America
• South America
• Europe
• The Middle East & Africa
• Asia-Pacific

Asia-Pacific is projected to witness the highest growth for the forecast period, 2023-28, with China as the most prominent and India as one of the fastest-growing countries. It owes to the mounting demand for luxury SUVs as they offer extra space & comfort, the rapidly rising number of high- & ultra-high-net-worth individuals, and the launch of various models with varied price ranges & easy financing schemes across the region.

Moreover, the mounting interest of the Chinese population in buying vehicles with craftsmanship & quality as top parameters, advanced technologies, digital interactions, connectivity, and ADAS, among other features, coupled with the rapidly growing adoption of EVs across the country, are other crucial aspects projected to drive the Luxury Cars Market in Asia-Pacific in the coming years.

Recent Developments in the Global Luxury Car Market

• In February 2023, Tesla Inc. successfully overtook the Bayerische Motoren Werke AG, alias BMW and earned its position as the top-most luxury EV car-selling brand in the United States of America. In general, Tesla Inc. achieved this success with the help of the recent Model 3 EV vehicle, which transcended the sales of the BMW 3 Series and the Mercedes-Benz C-Class.
• In January 2022, Volkswagen Group, a car manufacturer with headquarters in Germany, disclosed information on the development of its ID.5 model, which is based on the Skoda Enayaq iV model. Thanks to its 77kWh battery pack, the car is capable of traveling up to 300 kilometers in a single trip. The car's introductory price is estimated to be between 33 and 35 lakhs and is included in the list of luxury cars.

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