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The global automobile industry has shown a remarkable recovery from the sharp decline experienced during the pandemic in 2020. In 2021, sales began to rebound, albeit still below the 2019 levels. However, the growth was slowed down in 2022 due to supply chain shortages, particularly semiconductor shortages, which impeded a full recovery.
In a surprising turn of events, global vehicle sales rebounded strongly in 2023, surpassing pre-pandemic levels with production reaching approximately 94 million units. This strong demand, particularly driven by electric vehicles and growth in China, indicates a positive outlook for the industry.
The forecast for 2024 and 2025 shows continued growth, with light vehicle sales projected to increase by 1.8% in 2024 and 2.5% in 2025. This pattern shows an initial pandemic crash, followed by a gradual recovery hampered briefly by shortages in 2022, then a strong rebound by 2023 with ongoing growth expected.
Europe is also rushing to make the switch to electric vehicles. The EU aims to reduce fleet emissions by 15% by 2025 and 37.5% by 2035. In 2021, sales of vehicles in Europe were expected to increase by as much as 11% compared to the previous year. Despite current shortages and higher costs, the automotive sector boasts strong fundamentals.
In 2022, global automotive production is expected to reach nearly 89 million units again. Investors should closely monitor the automotive sector, particularly the market leaders in electric vehicle production that focus on purely battery-powered vehicles.
In the USA, over 16 million units of vehicles were produced in 2021, compared to 14.6 million in 2020. In China, sales of vehicles are expected to increase by more than 5% compared to the previous year in 2021.
China has implemented a series of emission reduction regulations, with tightened targets set to come into effect by 2025. The USA is accelerating the introduction of electric vehicles due to new regulatory measures. For the 2021 fiscal year, global estimates predict a growth of around 10% compared to the previous year, with approximately 84 million vehicles expected to be produced.
A major US corporation has announced it will increase its investments in electric and autonomous vehicles from 2020 to 2025 to 35 billion US dollars. One analyst predicts that the share of electric vehicles in Europe will reach 32% by 2030, while another predicts it will be as high as 70%. Pure electric vehicle manufacturers are seen as more attractive to investors than plug-in producers.
Automakers worldwide will have to comply with increasingly stringent global emission requirements. Analyst projections vary widely on the speed of electric vehicle adoption, but Europe, driven by aggressive emission regulations, is expected to lead the global adoption. The balance is expected to shift from hybrid vehicles to purely battery-powered ones.
Due to the pandemic, global vehicle production dropped below 77 million units in 2020. However, the industry's resilience and the world's collective efforts to recover from the pandemic have led to a strong rebound in 2023, signalling a promising future for the automotive sector.
- The growth in the automotive industry, particularly electric vehicles, presents opportunities for investment in finance, specifically in market leaders of electric vehicle production.
- The manufacturing industry, not just automotive, is witnessing a surge in demand, with the production of vehicles reaching an estimated 94 million units in 2023.
- The energy sector, specifically with regard to electric vehicles, is rapidly evolving due to global efforts to reduce fleet emissions, as seen in the EU's aim to reduce emissions by 15% by 2025.
- The aerospace and transportation sectors may also benefit from this growth in electric vehicles, as they share a common focus on innovation and sustainability.
- In the retail sector, the shift towards electric vehicles may influence consumer behavior and spending patterns, particularly with regards to personal-finance decisions related to vehicle purchases.
- The banking-and-insurance industry should anticipate changes in loan and insurance portfolios as a result of the increasing adoption of electric vehicles.
- Real-estate markets, especially in urban centers, may experience changes in demand due to the growth in electric vehicles, as infrastructure is adapted to cater to electric vehicles and charging stations.
- The stock market is likely to reflect these developments in the automotive and electric vehicle sectors, as investors make decisions based on predictions of the industry's future growth and regulatory trends.
