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Global auto market to grow modestly as China leads EV adoption

By Moon Joon-hyun

Published : Jan. 18, 2024 - 15:28

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Yang Jin-soo, leader of Hyundai Motor Group's Business Research Center's auto industry unit, presents his 2024 global automobile industry forecast at the Hyundai-Kia headquarters in Seoul on Thursday. (Hyundai Motor Group) Yang Jin-soo, leader of Hyundai Motor Group's Business Research Center's auto industry unit, presents his 2024 global automobile industry forecast at the Hyundai-Kia headquarters in Seoul on Thursday. (Hyundai Motor Group)

The global automotive market is projected to grow modestly this year, with a 1.6 percent increase to 84.12 million units signaling a tempered post-pandemic recovery, as global carmakers are looking to adopt strategies from Chinese carmakers to spur mass adoption of electric vehicles, according to Hyundai Motor Group's Business Research Center.

Yang Jin-soo, head of the center’s auto industry unit, shared his insights at a seminar hosted by the Korea Automobile Journalists Association in Seoul on Thursday.

Yang highlighted that the surge in automotive demand last year, particularly in the US, Western Europe and India, was primarily fueled by a supply chain recovery and the release of pent-up consumer demand. For this year however, he said that major markets like the US and Western Europe are showing signs of saturation and consumer sentiment is expected to weaken due to interest rate hikes.

He projected modest growth rates for 2024: a 2 percent increase for the US, 2.7 percent for Western Europe, a subtle 0.7 percent rise in China and a more robust 3.5 percent in India. He posited that Europe might grapple with a prolonged recession, and China’s high growth trajectory could be hampered by its real estate sector's instability.

Significant focus was on the electric vehicle market, which in his analysis comprised of battery (BEV) as well as plug-in hybrid (PHEV) models. He expected EV sales to continue slowing, at a reduced growth rate of 24.6 percent this year, from 31.5 last year.

Yet Chinese carmakers, led by BYD, have shown significant growth in the PHEV market, capturing an additional 12 percentage points of market share with competitive pricing. Chinese carmakers dominated the PHEV market with a 64 percent share last year, projected to reach 68 percent by 2024. Carmakers from the US, Western Europe and others, with companies like Tesla, are anticipated to hold a combined 48 percent share in the BEV market by 2025.

"The EV market is no longer about early adopters. All carmakers must aim for affordable pricing at all costs. China is leading the way in mass adoption, Europe is starting to catch up, and the US is on the brink of joining in," Yang said.

He emphasized the necessity for global manufacturers to recognize and emulate China's competitive edge in the electric vehicle sector, evidenced by strategic partnerships and innovations like Tesla’s Model Y produced in Shanghai and Volkswagen's collaboration with Chinese EV maker Xiaopeng Motors to produce a Volkswagen-branded BEV by 2026.

Regarding software-defined vehicles and autonomous driving technology, Yang indicated a market shift towards scale-downed technologies due to a high percentage of accidents involving autonomous driving systems.