Automotive OEM Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Vehicle Type (Commercial Vehicles, Passenger Cars, Electric Cars), By Component (Powertrain, Chassis, Electronics and Electrical, External Body, Car Interiors), By Sales Channel (Retailers, Wholesalers, Distributors), By Region & Competition, 2019-2029F

Market Overview

Automotive OEM Market was valued at USD 36.0 Billion in 2023 and is expected to reach USD 52.8 Billion by 2029 with a CAGR of 6.58% during the forecast period. The Automotive OEM market is driven by increasing consumer demand for advanced vehicle technologies, such as electric and autonomous vehicles. Innovations in safety features, fuel efficiency, and connectivity are boosting market growth. Trends like lightweight materials, smart manufacturing, and integration of AI for vehicle design and production are transforming the industry. Opportunities exist in the rising demand for electric vehicles (EVs), which drives new investments in battery technology and charging infrastructure. Challenges include high production costs, supply chain disruptions, and regulatory compliance, particularly regarding emissions standards. The increasing competition and need for rapid innovation make it crucial for OEMs to maintain a balance between cost-efficiency and technological advancements. For insatnce, In December 2024, Repairify's asTech joined forces with Auto-Wares. Through this partnership, Auto-Wares' customers gained access to advanced diagnostic tools and OEM-compliant solutions, driving greater efficiency and accuracy in automotive repairs.

Market Drivers

Electrification and Sustainable Mobility

One of the primary drivers propelling the Global Automotive OEM Market is the accelerating shift towards electrification and sustainable mobility. Governments worldwide are implementing stringent emissions regulations to address environmental concerns and combat climate change. In response, automotive OEMs are investing heavily in the development and production of electric vehicles (EVs) and hybrid vehicles. This trend is driven by several factors, including advancements in battery technology, increased consumer awareness of environmental issues, and favorable government incentives. Original Equipment Manufacturers are not only introducing new electric models but are also redesigning their manufacturing processes to accommodate electric drivetrains. Battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) have become integral components of OEM strategies, driving innovation and shaping the future landscape of the automotive industry. Beyond the vehicles themselves, OEMs are also focusing on sustainable practices in manufacturing. This includes the use of recycled materials, energy-efficient production processes, and eco-friendly disposal methods. The commitment to sustainability is not only a response to regulatory requirements but also a strategic move to align with consumer preferences for environmentally conscious products.

Technological Advancements and Connectivity

The relentless pursuit of technological advancements is a significant driver of the Global Automotive OEM Market. Original Equipment Manufacturers are continually integrating cutting-edge technologies into their vehicles to enhance safety, connectivity, and overall user experience. The rise of connected vehicles and the Internet of Things (IoT) has led to the development of advanced driver-assistance systems (ADAS) and in-car infotainment systems. ADAS features, such as adaptive cruise control, lane-keeping assistance, and automated emergency braking, are becoming standard in many new vehicles. These technologies not only improve safety but also lay the groundwork for the eventual realization of autonomous vehicles. Automotive OEMs are actively engaged in research and development to achieve higher levels of autonomy, contributing to the overall evolution of the automotive industry. The integration of connectivity features allows vehicles to communicate with each other, with infrastructure, and with external networks. Original Equipment Manufacturers are collaborating with technology companies to develop sophisticated telematics systems, enabling features like remote diagnostics, over-the-air updates, and enhanced navigation. Connectivity is not only a driver of innovation but also a key factor influencing consumers' purchasing decisions.

Demand for Autonomous Vehicles

The pursuit of autonomous vehicles is a compelling driver in the Global Automotive OEM Market. Automotive OEMs are investing heavily in research and development to bring autonomous driving capabilities to the market. According to The European Automotive Cluster project - Action 7, published in 2022, 80% of OEMs are planning to develop highly autonomous vehicles. The European Parliament highlighted the significant benefits of autonomous vehicles, particularly for individuals with reduced mobility, allowing them to participate more effectively in individual road transport and facilitating their daily lives. This emphasis on accessibility is crucial, especially in the design of MaaS-systems (Mobility as a Service). Autonomous vehicles have the potential to drastically reduce the number of traffic accidents. Currently, traffic accidents claim approximately 1.25 million lives annually, which is double the number of deaths caused by war, crime, and terrorism combined. Human errors, such as driving under the influence of alcohol, texting while driving, falling asleep at the wheel, and daydreaming, contribute to 94% of these accidents. In the European Union alone, 2,800 people lost their lives on the roads in 2019. By replacing human drivers with autonomous systems, it is estimated that road deaths and injuries could be reduced by about 90%. This transition to autonomous vehicles could save millions of lives each year, emphasis the urgent need and demand for this technology. Automotive OEMs are forming alliances and partnerships with tech companies, startups, and other industry players to leverage expertise and accelerate the deployment of autonomous technologies. The pursuit of autonomy is not only a response to consumer demand but also a strategic move to position OEMs at the forefront of the future of mobility.

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Key Market Challenge

Technological Disruptions and Innovation Pressures

The automotive industry is facing unprecedented technological disruptions, presenting both opportunities and challenges for Original Equipment Manufacturers (OEMs). The rapid evolution of technologies, such as electrification, connectivity, and autonomous driving, requires substantial investments in research and development. While these innovations open new avenues for market growth, they also pose challenges related to the pace of technological adoption, integration into existing vehicle architectures, and the need for skilled talent. OEMs are pressured to stay ahead of the innovation curve to remain competitive. The dynamic nature of technology in areas like electric vehicles (EVs) and autonomous driving demands continuous adaptation and investment. Balancing the incorporation of cutting-edge technologies with the durability and reliability expected from automotive products is a persistent challenge. Furthermore, the collaboration with technology companies, startups, and suppliers adds complexity to the value chain, requiring effective management of partnerships to ensure seamless integration of new technologies. Additionally, the transition to electric and autonomous vehicles necessitates a rethinking of traditional business models. OEMs are challenged to balance the production of traditional internal combustion engine (ICE) vehicles with the development of electric and autonomous offerings. Managing this transition while meeting consumer expectations for affordability and performance represents a significant challenge for the automotive OEM market.

Supply Chain Disruptions and Complexity

The automotive OEM market is highly dependent on intricate and global supply chains. The complexity of these supply chains presents challenges in terms of logistics, coordination, and risk management. Recent events, such as the COVID-19 pandemic, highlighted vulnerabilities in global supply chains, leading to disruptions in the production and distribution of automotive components. OEMs are challenged to manage a vast network of suppliers, each contributing specific components to the assembly of vehicles. Ensuring a steady and reliable supply of materials, parts, and sub-assemblies is crucial for maintaining production schedules and meeting consumer demand. Geopolitical tensions, trade disputes, and natural disasters further contribute to the unpredictability of the supply chain. The shift towards electric vehicles with specialized components, including batteries and electric drivetrains, introduces additional complexities. Securing a stable supply of rare earth materials, lithium-ion batteries, and other essential components becomes a critical challenge for OEMs. Strategies such as dual-sourcing, localizing supply chains, and implementing advanced analytics for supply chain visibility are being employed to mitigate these challenges. Furthermore, the automotive industry's move towards sustainability and eco-friendly practices necessitates a careful evaluation of suppliers' environmental and ethical standards. Ensuring responsible sourcing while maintaining cost-effectiveness adds another layer of complexity to supply chain management.

Regulatory Compliance and Emission Standards

The automotive industry is subject to a complex web of regulations and emission standards imposed by governments worldwide. Meeting these standards requires continuous innovation in vehicle design, engine efficiency, and emission control technologies. The challenge lies in navigating a landscape of diverse regulations across different regions, each with its own set of requirements and deadlines. For instance, Europe has stringent emission standards under the Euro system, while the United States follows Corporate Average Fuel Economy (CAFE) standards, and China has its own set of emission regulations (China VI). The varied regulatory landscape poses challenges for OEMs operating globally, as they need to adapt their products to meet regional requirements. The push towards sustainability and environmental responsibility adds further pressure on OEMs to reduce the carbon footprint of their vehicles. This includes not only meeting emission standards but also incorporating eco-friendly practices in manufacturing processes. Developing technologies that align with regulatory expectations while maintaining affordability for consumers remains a complex challenge for OEMs. Additionally, the automotive industry is witnessing a growing emphasis on safety regulations, with an increasing focus on advanced driver-assistance systems (ADAS) and crash avoidance technologies. OEMs must navigate a maze of safety standards, including those set by organizations like the National Highway Traffic Safety Administration (NHTSA) in the United States and the European New Car Assessment Programme (Euro NCAP).

Key Market Trends

Electrification and Sustainable Manufacturing

The automotive industry is undergoing a profound shift towards electrification. As concerns about climate change and environmental sustainability rise, Original Equipment Manufacturers are increasingly focusing on electric and hybrid vehicles. This trend encompasses not only the final product but also the entire manufacturing process. OEMs are adopting sustainable practices, including the use of eco-friendly materials, energy-efficient production methods, and recycling initiatives to reduce the carbon footprint of their manufacturing operations. Additionally, the demand for electric vehicles (EVs) is driving collaboration between OEMs and technology companies to develop advanced battery technologies, charging infrastructure, and energy storage solutions. This trend reflects a commitment to meeting regulatory standards, reducing greenhouse gas emissions, and addressing consumer preferences for eco-friendly transportation options.

Autonomous and Connected Vehicles

The automotive OEM market is experiencing a surge in the development and integration of autonomous and connected vehicle technologies. Original Equipment Manufacturers are investing heavily in research and development to create advanced driver-assistance systems (ADAS) and self-driving capabilities. This includes the incorporation of sensors, radar, LiDAR, and artificial intelligence to enable vehicles to navigate and make decisions autonomously. Furthermore, connected vehicle technologies are enhancing the overall driving experience. OEMs are integrating advanced infotainment systems, vehicle-to-everything (V2X) communication, and sophisticated telematics to create smart and interconnected vehicles. These trends not only improve safety and efficiency but also pave the way for the future of mobility, where vehicles communicate with each other and with smart infrastructure.

Digitalization and Industry 4.0

The adoption of Industry 4.0 principles is reshaping the manufacturing processes within the automotive OEM sector. Original Equipment Manufacturers are embracing digitalization, data analytics, and the Internet of Things (IoT) to create smart factories that enhance efficiency, reduce downtime, and optimize production processes. This includes the implementation of robotics, artificial intelligence, and advanced analytics for predictive maintenance. The digitalization trend extends beyond manufacturing to include the entire product lifecycle. OEMs are utilizing digital twin technology to simulate and optimize vehicle design, performance, and maintenance. This approach allows for faster prototyping, reduced time to market, and continuous improvements throughout the product lifecycle. As a result, the automotive OEM market is becoming more agile and responsive to changing consumer demands.

Segmental Insights

Component Insights

The external body segment dominated the automotive OEM market due to its essential role in vehicle aesthetics, functionality, and safety. This segment includes components such as doors, hoods, bumpers, fenders, and roof panels, which significantly influence a vehicle's structural integrity, aerodynamic performance, and visual appeal. Consumers place high importance on the design and finish of external body parts, driving OEMs to invest in innovative manufacturing processes and premium materials that enhance durability, weight reduction, and overall quality.

Lightweight materials, such as aluminum and composites, are increasingly used for external body parts to improve fuel efficiency and meet stringent emissions standards. This trend aligns with the global shift toward electric and hybrid vehicles, which require lightweight designs to maximize battery efficiency. Additionally, advancements in manufacturing technologies, including automated stamping and 3D printing, allow OEMs to produce external body components with high precision and cost-effectiveness, further contributing to the segment's dominance.

The external body also plays a critical role in vehicle safety, incorporating crumple zones and energy-absorbing structures to protect occupants during collisions. Regulatory requirements for crash safety and pedestrian protection compel OEMs to prioritize innovations in external body designs. Furthermore, the growing popularity of customization and aesthetic upgrades among consumers supports consistent demand for external body components, ensuring their market leadership. 

The external body segment's importance in aesthetics, safety, regulatory compliance, and evolving consumer preferences solidifies its position as the dominant segment in the automotive OEM market.

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Regional Insights

North America dominated the automotive OEM market due to its robust manufacturing infrastructure, technological advancements, and strong consumer demand. The region is home to several leading automotive manufacturers with established production facilities, advanced supply chains, and a focus on innovation. These companies invest heavily in research and development (R&D) to produce vehicles equipped with cutting-edge technologies, such as autonomous driving, connectivity, and electrification, catering to evolving consumer preferences.

The demand for vehicles in North America is driven by high disposable incomes, a preference for large vehicles such as SUVs and trucks, and a growing interest in electric and hybrid models. Stringent regulatory frameworks promoting fuel efficiency and emission standards further propel advancements in automotive manufacturing, encouraging OEMs to develop lightweight materials and energy-efficient technologies. Additionally, government incentives for electric vehicle (EV) adoption and infrastructure development significantly support the growth of the automotive sector in the region.

North America’s dominance is also attributed to its extensive supplier network, ensuring a steady flow of quality components and materials. The integration of smart manufacturing technologies, including automation, robotics, and artificial intelligence, enhances production efficiency and cost management, making the region a leader in automotive innovation. 

The region's strong focus on aftersales services and replacement parts ensures a consistent revenue stream for OEMs, bolstering their market position. These factors, combined with a culture of continuous technological improvement and consumer-centric designs, establish North America as the leading region in the global automotive OEM market.

Recent Development

• In 2024, Triton EV, an Indian electric vehicle manufacturer, has introduced a hydrogen internal combustion engine (ICE) that can be integrated into various vehicle categories, from compact cars to large commercial trucks. This eco-friendly, zero-carbon-emission engine uses hydrogen as a fuel source, eliminating harmful pollutants and providing high performance and superior efficiency without sacrificing power. Triton is seeking partnerships with automotive manufacturers, fleet operators, and other stakeholders to integrate this versatile technology into their vehicles.
• In 2023, The automotive supplier Webasto has developed a prototype Roof Sensor Module that integrates a comprehensive range of camera and lidar sensors into a slimline panoramic roof, enabling reliable 360-degree monitoring of a vehicle's surroundings for autonomous driving. The module combines various technologies to ensure sensor availability, temperature regulation, and cleaning to maintain optimal performance in diverse weather conditions, while blending aesthetically into the vehicle's architecture.

• Toyota Motor Corporation
• Volkswagen AG
• Honda Motor Co., Ltd
• Magna International Inc.
• Continental AG
• CIE automotive SA
• Siemens AG
• Bayerische Motoren Werke AG
• DENSO Corporation
• Robert Bosch GMbH

Report Scope:

In this report, the Global Automotive OEM Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Automotive OEM Market, By Vehicle Type:

o   Commercial Vehicles

o   Passenger Cars

o   Electric Cars

• Automotive OEM Market, By Component:

o   Powertrain

o   Chassis

o   Electronics and Electrical

o   External Bod

o   Car Interiors

• Automotive OEM Market, By Sales Channel:

o   Retailers

o   Wholesalers

o   Distributors

• Automotive OEM Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe & CIS

§  France

§  Germany

§  Spain

§  Italy

§  United Kingdom

§  Rest Of Europe

o   Asia-Pacific

§  China

§  Japan

§  India

§  Vietnam

§  South Korea

§  Thailand

§  Australia

§  Rest of Asia-Pacific

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

§  Turkey

o   South America

§  Brazil

§  Argentina

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Automotive OEM Market.

Available Customizations:

Global Automotive OEM market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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