LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the global sports utility vehicle (SUV) market to grow at a CAGR of close to 19% during the forecast period, according to their latest report.
The market study covers the present scenario and growth prospects of the global SUV market for 2017-2021. The report also lists small-sized SUVs, medium-sized SUVs, and large-sized SUVs as the three chief segments based on the type of vehicle. The medium-sized SUV segment dominated the global SUV market, contributing 59% to the total market share, followed by small-sized SUVs with 25% of the market share and the large-sized SUVs contributing the remaining 16% of the total market share as of 2016.
“The global SUV market is expected to flourish owing to the growing demand for off-road vehicles. The SUV market is witnessing growing volume sales of small and crossover SUVs due to their affordability and low cost of ownership, in emerging economies such as India and China,” says Siddharth Jaiswal, a lead analyst at Technavio for automotive manufacturing research.
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Technavio automotive analysts highlight the following three market drivers that are contributing to the growth of the global SUV market:
- Launch of new models leading to new customer base
- Less stringent fuel economy standards for SUVs
- Reducing prices of retail gasoline driving the SUV market
Launch of new models leading to new customer base
The global automotive industry is evolving rapidly with the emergence of new technologies and development of new vehicles. In the last decade, many new vehicles have been launched especially new-age SUVs. Automakers have been working on increasing the product line of SUVs to meet the high potential demand.
Moreover, automakers are continuously working on increasing their geographic presence to target new consumers in new markets. For instance, the Japanese automaker Toyota Motors has been working on the expansion of its market in emerging economies like Africa and Russia. Therefore, the launch of new SUVs model in new markets will lead to the growth of the global SUV market during the forecast period.
Less stringent fuel economy standards for SUVs
The growing issues of global warming and greenhouse effect have pushed the automotive regulating bodies and governing authorities to come up with stringent fuel emission standards for the vehicles.
However, SUVs are not considered under such laws as they have been classified as light-duty trucks and therefore enjoy some leverage as far as fuel economy laws are concerned. Such wave off in the fuel economy requirements for SUVs has given incentive to automakers to manufacture and sell more SUVs in the market.
“As long as SUVs are not classified under the same stringent laws as passenger cars, the production and sale of SUVs in the market are further guaranteed in the coming years,” says Siddharth.
Reducing prices of retail gasoline driving the SUV market
The recent decline in the price of oil is having a major impact on the global economy. In developed economies, where a high percentage of oil is imported, a fall in oil prices is a boon to consumer spending. Therefore, the reduction in gasoline price plays a major role in driving the global SUV market as these vehicles are usually fuel inefficient.
The largest beneficiaries of the decreasing oil prices are the US and Western European countries, which are consequently the prime markets for SUVs. The low gas price is likely to stem the customer confidence in the automotive automatics market further. The future is expected to be dominated by automated manual transmission. It is also likely to help developing markets like India and the countries of the Association of Southeast Asian Nations (ASEAN), where ownership costs of such systems are declining and may result in attracting new buyers.
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