Luxury Cars Market Size was valued at USD 625.6 Billion in 2022. The Global Luxury car market industry is projected to grow from USD 671.2 Billion in 2023 to USD 1179.4 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 7.30% during the forecast period (2024 - 2032). Rising demand for safety features in automobiles and a comfortable driving experience, technological advancements in the automotive industry catering to fuel efficiency, and connectivity technology are expected to be significant market drivers for the luxury car market.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Market CAGR for luxury cars is being driven by the adoption of electric luxury cars and technological advancements in luxury brand cars. With growing concerns for the environment and a push for environmental protection, governments worldwide are encouraging the use of emission-free and eco-friendly electric vehicles. There is a rapidly increasing demand for sustainable transportation options, such as electric vehicles. Major brands like Tesla and other luxury manufacturers are producing luxury electric cars equipped with modern technology and comforts, driving growth in the luxury car segment. According to the Alliance for Automotive Innovation, electric vehicle sales surged from approximately 125,000 in Q1 2021 to 185,000 in Q4 2021 and from around 300,000 in Q1 2023 to 375,000 in Q3 2023.
The year 2023 marked the first time annual EV sales in the U.S. exceeded 1 million units, achieved by Q3, with sales through the first three quarters of 2023 being about 58% higher than the same period in 2022. Data from Wards Intelligence reveals that combined sales of hybrid vehicles, plug-in hybrid electric vehicles, and battery electric vehicles (BEVs) accounted for 16.3% of total new light-duty vehicle (LDV) sales in the United States in 2023, compared to 12.9% in 2022. Several luxury car manufacturers experienced a surge in sales of luxury vehicles attributed to economic growth. Audi India, for example, delivered 4,187 units in 2022, marking a notable 27% increase in sales compared to the previous year. Additionally, Porsche, a renowned luxury car maker, achieved global sales of 309,884 units in 2022, representing a 3% rise from sales figures in 2021.
Advancements in technology, such as the integration of all-electric vehicle charging stations with the Internet of Things (IoT) and real-time information solutions, along with various driving modes and enhanced safety features, are accelerating market growth. Cutting-edge technology, including real-time data on vacant parking spots and locating nearby charging stations, will propel the market growth of luxury car brands. As a result, it is anticipated that throughout the projection period, demand for the luxury cars market will increase due to the adoption of electric luxury cars and Technological advancements in luxury brand cars. Thus, driving the Luxury Cars Market revenue.
The global Luxury Cars Market segmentation, based on Vehicle Type, includes SUVs, Sedan/Hatchback, and Sports/Super Luxury Cars. The sports/super luxury cars segment dominated the market, accounting for 58% of market revenue. The segment's expansion is driven by increasing customer favoritism towards SUVs, influenced by factors including convenience, perceived safety, practicality, and aesthetic appeal.
The global Luxury Cars Market segmentation, based on Propulsion, includes Electric/Hybrid and ICE. The electric/hybrid segment dominated the market, accounting for 58% of market revenue. This growth can be attributed to government initiatives aimed at expediting decarbonization, including policies such as tax incentives, local subsidies, financial support, and exemptions from purchase restrictions. According to the International Energy Agency, electric car sales in Europe continued to surge in 2021, increasing by over 65% year-on-year to reach 2.3 million vehicles.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
The global Luxury Cars Market segmentation, based on Components, includes Drivetrain, Interior, Body, Electronics, and Chassis. The drivetrain segment dominated the market, accounting for 60% of market revenue. Luxury car purchasers frequently prioritize vehicles with outstanding performance and handling capabilities. Consequently, there's a notable demand for drivetrain elements capable of providing robust power delivery, rapid acceleration, and precise handling. To fulfill these preferences, manufacturers are actively investing in technologies like turbocharging, supercharging, and cutting-edge traction control systems, thereby fueling the expansion of the drivetrain sector.
By region, the study provides market insights into North America, Europe, Asia-Pacific, and Rest of the World. The anticipated expansion of the luxury car market in North America can be attributed to several key factors. The growing production of electric vehicles, supported by established players and new startups like Tesla, Rivian, and Lucid Motors, is poised to drive demand in the North American automotive luxury car market. Major automotive OEMs are unveiling plans to launch various electric vehicle models. For example, in 2019, Ford introduced its renowned Mustang Mach-E electric SUV and announced intentions to invest approximately $11.5 billion in technology between 2020 and 2022. The company aims to produce a range of EVs and plug-in hybrids, including an electric variant of the next-generation F-150 pickup. Similarly, in March 2020, GM revealed its EV strategy alongside its new Ultium battery technology. GM plans to invest around $20 billion by 2025 to develop electric and autonomous vehicles, with the launch of 20 all-electric models expected by 2023.
Further, the major countries studied in the market report are the US, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe Luxury Cars Market accounts for the second-largest market share as the majority of European luxury brands have transitioned towards producing crossover SUVs, resulting in heightened sales figures. These luxury brands typically report that over three-quarters of their sales volume comes from SUV models. The German automotive sector has long been the cornerstone of the European automotive industry. Furthermore, there has been a notable increase of over 60% in R&D investment within Europe's automotive sector, primarily driven by Germany. In the United Kingdom, luxury comfort features are prominent across many car manufacturers' popular models, including the Audi Q-series, BMW X-series, Nissan Qashqai, and Range Rover Evoque. The premium car segment within the country has seen significant sales growth, with customer preferences leaning towards SUVs. Notably, in March 2022, the best-selling cars included the Tesla Model Y (6,464 units), Tesla Model 3 (6,457 units), Vauxhall Corsa (5,515 units), Nissan Qashqai (5,401 units), and Hyundai Tucson (4,876 units). Further, the German Luxury Cars Market held the largest market share, and the UK Luxury Cars Market was the fastest-growing market in the European region.
The Asia-Pacific Luxury Cars Market is expected to grow at the fastest CAGR from 2024 to 2032. The surge in development is attributed to the rapid economic expansion in the region, resulting in increased disposable income and thereby driving demand for luxury segment cars. Mercedes achieved a remarkable growth of 41% in 2022, with sales totaling 15,822 units compared to 11,242 units in the previous year. Volvo Car India also posted impressive figures, experiencing a 40% growth in the January-September 2023 period, with sales of 1,751 cars compared to 1,251 units in the same period last year. Additionally, in January 2022, Lamborghini, a manufacturer of super luxury segment cars, announced its 2021 sales figures in India, totaling 69 units. The company witnessed an 86% growth in the country, further fueling the market expansion of luxury vehicles in the Asia Pacific region. Moreover, China’s Luxury Cars Market held the largest market share, and the Indian Luxury Cars Market was the fastest-growing market in the Asia-Pacific region.
Leading market players are investing heavily in research and development to expand their product lines, which will help the Luxury Cars market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the Luxury car industry must offer cost-effective items.
Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Luxury car industry to benefit clients and increase the market sector. In recent years, the Luxury car industry has offered some of the most significant advantages to the automotive market. Major players in the Luxury Cars Market, including Mercedes-Benz (Germany), Audi (Germany), BMW (Germany), Lexus (Japan), Porsche (Germany), Jaguar Land Rover (U.K.), Cadillac (U.S.), Maserati (Italy), Volvo (Germany), Genesis (South Korea) are attempting to increase market demand by investing in research and development operations.
Mercedes-Benz Group AG (formerly known as Daimler AG) is an automotive company specializing in the development, manufacturing, and distribution of premium and luxury cars and vans. In addition to vehicle sales, the company offers various services, including financing, leasing, car subscription, rental, fleet management, insurance brokerage, and digital services for charging and payment, along with innovative mobility solutions. Mercedes-Benz is committed to developing efficient powertrains and transitioning to an all-electric, emissions-free, and software-driven environment. With production facilities across Europe, North and Latin America, Asia, and Africa, the company markets its vehicles and services in nearly every country across all continents. Notably, in May 2023, Mercedes-Benz secured the leading position in luxury vehicle sales in India, with the BMW 3 Series ranking as the best-selling car, and the E-Class LWB emerging as the top-selling vehicle within the brand's lineup.
Jaguar Land Rover Automotive Plc (Jaguar Land Rover), a subsidiary of Tata Motors Ltd, specializes in the design and manufacturing of high-end cars. The company focuses on marketing premium all-wheel drive vehicles and luxury sports cars under two distinct brands: Land Rover and Jaguar. Land Rover's product lineup comprises the Discovery, Discovery Sport, Range Rover, Range Rover Sport, Range Rover Velar, Range Rover Evoque, and Defender models. Jaguar offers the XF, XE, I-Pace, E-Pace, F-Type, and F-Pace cars. Distribution of its products is conducted through a network of national sales companies, franchise sales dealers, importers, and export partners in international markets. Jaguar Land Rover is headquartered in Coventry, West Midlands, UK. Notably, in October 2021, the fifth-generation Jaguar F-Pace with MHV version was introduced to the market. The F-Pace is available in four trim levels: F-Pace 250, 250 S, S 340, and R-Dynamic S 400. The S 340 model is equipped with a 3.0-liter six-cylinder turbocharged mild hybrid engine producing 335 hp, while the R-Dynamic S variant utilizes the same engine with a slightly higher power output of 395 hp.
January 2022: In January 2022, Mercedes-Benz launched its inaugural luxury electric vehicle in India, the EQC SUV. Equipped with two asynchronous motors—one on each axle—the vehicle generates a combined output of 408 hp and 765 Nm of torque. Its floor-mounted 85kWh lithium-ion battery pack offers a WLTP-certified range of 400 km on a single charge.
June 2021: In June 2021, Range Rover launched the Range Rover Sport SVR, the pinnacle of performance in the Range Rover Sport lineup. This SUV boasts features such as heated front and rear seats, driver condition monitor aid, and 360-degree parking aid, among other advanced functionalities.
| Report Attribute/Metric | Details |
| Market Size 2022 | USD 625.6 Billion |
| Market Size 2023 | USD 671.2 Billion |
| Market Size 2032 | USD 1179.4 Billion |
| Compound Annual Growth Rate (CAGR) | 7.30% (2024-2032) |
| Base Year | 2023 |
| Market Forecast Period | 2024-2032 |
| Historical Data | 2019-2022 |
| Market Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | Vehicle Type, Propulsion, Component, and Region |
| Geographies Covered | North America, Europe, Asia Pacific, and the Rest of the World |
| Countries Covered | The US, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil |
| Key Companies Profiled | Mercedes-Benz (Germany), Audi (Germany), BMW (Germany), Lexus (Japan), Porsche (Germany), Jaguar Land Rover (U.K.), Cadillac (U.S.), Maserati (Italy), Volvo (Germany), Genesis (South Korea) |
| Key Market Opportunities | The production of electric luxury cars and the growing adoption of autonomous driving technology in luxury cars |
| Key Market Dynamics | Rise in demand for safety, improved vehicle performance, and enhanced driving experience |
Frequently Asked Questions (FAQ) :
The global Luxury Cars Market size was valued at USD 671.2 Billion in 2023.
The global Luxury car market is projected to grow at a CAGR of 7.30% during the forecast period, 2024-2032.
North America had the largest share of the global market
The key players in the market are Mercedes-Benz (Germany), Audi (Germany), BMW (Germany), Lexus (Japan), Porsche (Germany), Jaguar Land Rover (U.K.), Cadillac (U.S.), Maserati (Italy), Volvo (Germany), Genesis (South Korea)
The Sports/Super Luxury Cars segment dominated the market in 2023.
The Drivetrain segment had the largest share in the global market.
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