Global automotive manufacturing: industry profile

The global automotive manufacturing industry is very large, with its market valuation sitting at USD $2.6tn in 2025, according to IBISWorld. This impressive market size reflects the industry's fundamental role in the global economy, and its capacity to generate value across multiple geographic regions and product categories.

Data compiled by the International Organisation of Motor Vehicle Manufacturers (OICA) show that worldwide sales of motor vehicles reached approximately 99.8m in 2025, representing a 4.7% increase from the 95.3m units sold in 2024.

Overall production statistics have also seen noteworthy growth of late. OICA figures show that global vehicle production increased from 92.7m units in 2024 to 96.4m in 2025, representing year-on-year growth of 3.9%.

However, as Roland Berger have noted, growth is unevenly distributed by region. Participants also face some noteworthy challenges. These complicating factors are explored in more detail below.

Major automotive players are located across many countries and regions. Currently, however, growth rates and prospects vary considerably from place-to-place.

According to analysis from Roland Berger, Western markets are approaching "peak auto", whilst China and the Global South continue to drive growth.

Production is increasingly concentrated in Asia, with China in particular establishing itself as the undisputed global leader in automotive production, according to S&P Global. This narrative is reinforced by OICA production figures for 2025, which show that production in the Asia-Pacific region rose by 7.6% to around 59.2m vehicles, accounting for more than 61% of global output. China produced 34.53m vehicles over the course of the year – up 10.4% on 2024. India's vehicle production also rose, reaching 6.49m.

By contrast, production in Western nations has been relatively sluggish. According to OICA, vehicle production in Europe was down 0.8% year-on-year in 2025, totalling 17.2m. In the UK, production was down 15.5%, according to the Society of Motor Manufacturers and Traders (SMMT). Production in the US has been somewhat more robust, but at approximately 10m vehicles per year, it still lags behind pre-COVID levels (annual US light vehicle production averaged 11.6m in the five years prior to the pandemic).

In terms of sales, too, there are differing outlooks between regions. There are growing domestic markets in China and in some developing and emerging nations – particularly in Asia. Data compiled by OICA show that sales across Asia, Oceania and the Middle East increased by 7.1% in 2025, to 55.02m units. Vehicle sales in Africa also increased, from 1.05m to 1.29m units. Meanwhile, sales in Western markets have been markedly weaker – new vehicle sales in Europe were down 0.4% year-on-year in 2025, for example. According to Roland Berger, slow economic growth, aging populations and declining population sizes are working to depress sales in Western markets, as well as in Japan and Korea.

Despite the increasing prominence of China and the Global South, however, Europe and North America still offer opportunities – they remain very large markets with potential for growth, particularly at the premium end of the product range. For example, a recent report from Statista states that “the Luxury Cars market in Europe is experiencing significant growth and development”. In addition, Roland Berger note that Western manufacturers benefit from established customer bases, good brand images, and strong production and sales networks across key markets.

In the UK, as in many other regions, the motor vehicle manufacturing industry has shown resilience in rebounding from the disruptions of the COVID era, and there are reasons to be optimistic about its future.

Significantly, in the Advanced Manufacturing Sector Plan published in June 2025, the UK government designated it as a "frontier industry" — one which is set to "shape the future of manufacturing in the UK" as it shifts its focus towards the "next generation of Zero Emission and Connected Automated Vehicles". The plan outlines a number of government initiatives which aim to support growth in this area, including £2bn of automotive capital and R&D funding to 2030, a £500m extension to R&D support under the DRIVE35 programme, and the implementation of the Automated Vehicles Act 2024.

However, as of 2024, the industry's total production output and exports remained below pre-pandemic levels. In this regard its performance broadly mirrors that of many other European nations, as it grapples with the issues described elsewhere in this profile. Some key figures for the period 2019–2024 are set out in the table below.

The shifting geographic centre of gravity in terms of production has been accompanied by some noteworthy shifts in global trade patterns. Though, according to Statista, Germany remains the world’s leading passenger car exporter, some familiar trade patterns have been disrupted.

For example, figures from the ACEA show that there was a marked decline in the EU’s new car exports in the 2024, with export value down 7.3% compared with 2023. The UK has also seen a downturn in its car exports in recent years – according to the UN Comtrade database, their total value stood at $38.6bn in 2019, whereas in 2024 they totalled $35.9bn.

Meanwhile, China’s exports of motor cars have increased dramatically. In 2019, their total value stood at $8.6bn; in 2024 this figure reached $90.2bn (source: UN Comtrade). A significant proportion of these exports are to Western countries such as the UK. According to data from UN Comtrade, the total value of motor cars exported from China to the UK in 2019 was $283.1m. In 2024 the figure was $4.7bn – an increase of more than 1500%. S&P Global note that the market share of Chinese cars in Europe reached 5.8% in 2025, nearly double that of 2024.

Such shifts have altered the trade balances of some key participants. For example, figures from the ACEA show that the EU’s new car trade surplus decreased from €86.6bn in 2023 to €81.5bn in 2024. S&P Global predict that, in the coming years, Europe will transition from being a net exporter of light vehicles to a net importer. China, by contrast, has seen its motor car trade balance swing from a deficit of $38.4bn in 2019, to a surplus of $52bn in 2024 (source: UN Comtrade).

Going forward, the shape of global trade in this sector is likely to be shaped to some extent by tariffs and other trade interventions. The ICAEW Library maintains a separate research guide on tariffs.

Further data on global trade flows can be accessed via the UN Comtrade database.

Analysts have identified a number of trends which look likely to influence the industry’s trajectory going forward. Whilst many of them might be viewed as challenges, they are likely to present opportunities as well as risks.

Some of the key trends currently shaping the industry are outlined below.

Cost pressures are set to remain a defining feature of the industry’s near-term outlook. KPMG’s 25th Annual Global Automotive Executive Survey notes that automotive manufacturers globally are facing mounting pressure from cost inflation, geopolitical uncertainty and fragile supply chains.

These pressures may accelerate consolidation across the industry: Bain & Company argue that automakers and suppliers are increasingly turning to mergers, acquisitions, partnerships and joint ventures to spread R&D costs, reduce overheads and build scale in a low-growth, high-cost environment.

Electric vehicle (EV) adoption continues to grow – globally, electric car sales rose by over 20% year-on-year in 2025 to reach 21m units, meaning one in every four cars sold was electric. This trend is particularly pronounced in China, where electric cars accounted for more than half of all annual car sales for the first time in 2025.

However, experts such as Deloitte, PwC and Simon-Kucher note that EV-rollout momentum has slowed in some markets, due to affordability concerns, range anxiety, and infrastructure limitations. Hybrid and plug-in hybrid vehicles are gaining favour as transitional solutions, offering fuel efficiency without full reliance on charging networks.

For example, data from the International Energy Agency (IEA) show that electric car sales in the United States declined by 2% in 2025.

As the IEA have stressed, sales of internal combustion engine (ICE) cars will not fade quickly, and in fact may well rise in some regions in the short-to-medium term. Manufacturers will likely need to navigate transitions which progress at different speeds.

That said, several countries have lately reaffirmed their commitment to supporting the growth of the EV market. Notably, the UK government recently launched the £2.5bn DRIVE35 capital and R&D funding programme to support zero-emission vehicle manufacturing, and pledged to spend an additional £400m on charging infrastructure.

Analysts such as those at S&P Global and PwC note that Chinese automakers are emerging as formidable global competitors, offering cost-effective, tech-forward vehicles – particularly electric cars.

According to the IEA, as of November 2025 around 70% of electric cars sold worldwide were manufactured in China. Chinese manufacturers are also enjoying strong sales of ICE and hybrid vehicles in key markets — notably, the Jaecoo 7 was the UK’s best-selling new car in March 2026.

Recently, the Economist reported that China is “pulling ahead in the robotaxi race”, with its relatively cheap self-driving cars proving to be a significant advantage.

As Roland Berger have noted, Chinese companies develop vehicles 25–30% faster and at 20–30% lower cost than established Western competitors. Meanwhile, as the IEA have reported, large-scale manufacturing operations and vertical integration mean that producing a small SUV in China is over 30% cheaper than in advanced economies.

With Chinese players being "poised to compete for global leadership", Western manufacturers may need to streamline operations and accelerate innovation in order to remain competitive. McKinsey have argued that North American automotive OEMs need to build around “ARC”: adaptability, resilience, and competitive economics.

Euromonitor note that several manufacturers are attempting to mitigate geopolitical and logistical risks – such as those posed by tariffs and armed conflict – by investing in smaller, more localised supply chains. Some are also increasing their collaboration with mining, chemical, and technology companies to secure critical materials and capabilities for electric vehicle production.

A recent IEA report stresses, for example, the benefits which may arise from investment in the manufacturing of cost-competitive battery chemistries close to car assembly centres.

As noted in a recent PwC report, vehicles are increasingly defined by software rather than hardware. Smartphone integration, infotainment systems, over-the-air updates, and AI-powered features (including autonomous driving) are key – despite some consumer concerns with regard to the latter.

In the UK, the government has affirmed its commitment to supporting growth in the Connected and Automated Mobility (CAM) area, as part of its Advanced Manufacturing Sector Plan. It has pledged £150m to extend the CAM Pathfinder programme, and set out an implementation programme for the Automated Vehicles Act 2024, which will pave the way for self-driving vehicles to be used on British roads by removing the need for a safety driver.

Deloitte report that loyalty to established brands is weakening, with a growing share of consumers — especially in China and Southeast Asia — intending to switch brands. Direct-to-consumer sales and subscription models are gaining traction, particularly among younger buyers.

The top ten automotive manufacturers for the year 2025, as defined by global sales, are listed in the table below.

ICAEW’s Library & Information Service can provide information on UK and Irish participants in the automotive manufacturing industry via its wide range of company information services. This includes:

• Information on company acquisitions in the sector
• Private company transaction multiples
• Company data
• Beta values for companies and the sector
• P/E ratios for companies and the sector

For more information, please contact our enquiry team on +44 (0)20 7920 8620 or at library@icaew.com to discuss your requirements.

The websites of trade bodies in this sector are a useful source of industry overviews, contacts and statistics.

UK

• British Independent Motor Trade Association (BIMTA)
• Institute of the Motor Industry (IMI)
• Society of Motor Manufacturers and Traders (SMMT)

Europe

• European Association of Automotive Suppliers (CLEPA)
• European Automobile Manufacturers' Association (ACEA)

Americas

• Electric Vehicle Association (US)
• Global Automakers of Canada
• Motor & Equipment Manufacturers Association (MEMA - US)

Global

• Alliance for Automotive Innovation
• Automotive Industry Action Group (AIAG)
• International Organisation of Motor Vehicle Manufacturers (OICA)
• Society of Automotive Engineers