Global automotive manufacturing: industry profile

The global automotive manufacturing industry is very large, and the sector has lately experienced significant growth, with its market valuation reaching USD $2.8tr in 2024, 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 95 million in 2024, representing an increase from the 92.8 million units sold in 2023. Both 2023 and 2024 sales figures surpassed pre-pandemic levels, indicating the industry's successful navigation through supply chain disruptions, semiconductor shortages, and economic uncertainties that characterised the 2020-2022 period.

Overall production statistics have also recovered following the COVID-19 pandemic. OICA figures show that global motor vehicle production surpassed pre-pandemic levels in 2023 and 2024, with production volume for 2024 almost one million vehicles higher than that recorded in 2019.

However, as Roland Berger have noted, growth is slower than in previous eras, and 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 from place-to-place.

Asia – particularly China – has lately outperformed other regions on several metrics. 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. In a recent report, the European Automobile Manufacturers Association (ACEA) note that car production in Asia continued to expand in 2024, growing by 1.5% to nearly 46 million cars. China saw the largest increase (5.2%), whilst India saw a 4.7% rise in its car production. OICA data shows that Chinese manufacturers produced over 31.2 million new vehicles in 2024 – around 5.5 million more than in 2019.

By contrast, production in Western nations has struggled to rebound post-COVID. According to OICA, Europe produced over 21.2 million new vehicles in 2019, but only around 17.2 million in 2024. Production in the US has recovered somewhat more robustly, but 2024 production (10.5 million) nonetheless failed to match that seen in 2019 (10.8 million). In May 2025, vehicle production in the UK fell to its lowest level for May since 1949 (excluding 2020), according to the Society of Motor Manufacturers and Traders (SMMT).

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 over 31.4 million new vehicles were sold in China in 2024 – up almost 6 million on the 2019 figure (25.7 million). India has also seen a significant uptick in new vehicle sales during the same period (3.8 million in 2019 vs. 5.2 million in 2024). Meanwhile, sales in Western markets have been more sluggish – new vehicle sales in Europe in 2024 were 10.7% lower in 2024 than in 2019; in the US they were 6.6% lower. 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”, with revenue expected to grow at an annual rate of 1.06% between 2025 and 2029. 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 £2 billion of automotive capital and R&D funding to 2030, a £500 million extension to R&D support under the DRIVE35 programme, and the implementation of the Automated Vehicles Act 2024.

However, as of 2023, 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 2019–2023 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 $38,583,888,394 in 2019, whereas in 2024 they totalled $35,855,347,917.

Meanwhile, China’s exports of motor cars have increased dramatically. In 2019, their total value stood at $8,633,018,198; in 2023 this figure reached $77,648,806,293 (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 $283,133,028. In 2023 the figure was $5,723,800,605 – an increase of 1921.59%. In addition, Forbes note that China's share of Europe’s electric vehicle market — 9% in 2024 — is projected to rise to 12% by 2025.

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 €86.6 billion in 2023 to €81.5 billion 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 $38,423,748,882 in 2019, to a surplus of $31,709,807,251 in 2023 (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.

Experts predict sustained growth of the global industry over the coming years.

S&P Global forecast that global new vehicle sales in 2025 are to rise 1.7% year-over-year. Looking at the UK market in particular, as of April 2025 the SMMT predict that car registrations are to rise 0.6% to 1.964 million in 2025, followed by a further 1.4% rise to 1.992 million units in 2026. Looking further ahead, Roland Berger predict that the volume of light vehicle sales globally will grow by approximately 1.1% per year in the period to 2040.

However, projected growth figures such as those set out above are more modest than those seen in previous periods, and growth is likely to be unevenly distributed by region, in line with the emerging regional segmentation described above.

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.

As noted by Euromonitor, cost pressures constitute a defining characteristic of the industry's near-term outlook, driven by rising labour costs alongside substantial investment requirements for electric vehicle development and production. Forbes report that these financial challenges are expected to drive continued consolidation within the automotive industry, as companies seek to share investment costs through strategic alliances, mergers, and acquisitions.

While electric vehicle (EV) adoption continues to grow – particularly in China – experts such as Deloitte, PwC and Simon-Kucher note that its 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.

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

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

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.

To remain competitive, Western manufacturers may need to streamline operations and accelerate innovation.

Euromonitor note that several manufacturers are attempting to mitigate geopolitical and logistical risks – such as those posed by tariffs – 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.

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 £150 million 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.

Younger consumers in emerging markets are increasingly open to giving up vehicle ownership in favour of ‘mobility-as-a-service’ solutions, as reported by Deloitte. This shift is expected to gradually reduce reliance on private vehicles, especially in urban areas with robust transit infrastructure.

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 car manufacturers for the year 2024, 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