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Small Cars Market Growth Opportunities & Forecast [2031]

Small Cars Market

Name: Growth Market Reports
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Segments - by Type (Compact and Subcompact), Fuel Type (Petrol, Diesel, Electric, and Hybrid), Distribution Channel (Original Equipment Manufacturers and Aftermarket), End-use (Passenger cars [Economy and Luxury {Convertible and Non-convertible}] and Sports cars), and Region (Asia Pacific, North America, Latin America, Europe, and Middle East & Africa) - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast 2023 – 2031

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Akash Vedpathak

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Shreyas Tandon

Report Description

The global small cars market size was USD 5.83 Bn in 2022 and is likely to reach USD 7.67 Bn by 2031, expanding at a CAGR of 3.1% during 2023–2031. The rising demand for compact cars with high fuel efficiency is driving the market.

Small cars are also called compact cars or mini cars. They have two-doors, four-doors, sports coupes, or hatchbacks. Manufacturers produce small cars to serve various purposes such as satisfying demand for small, economical, and affordable transportation.

Consumers who prefer less cargo space, choose small cars as they serve the purpose of four to five seatings preferably for nuclear families. Congested and crowded cities are favorable for small cars as these cars are easy to drive & maneuver and are available in convenient price ranges.

Small cars consist of different ranges from microcars, minicars, mini compacts, subcompacts, and compact cars. These genres of vehicles have offerings from modern and luxury vehicle manufacturers.

The report finds that the COVID-19 pandemic affected numerous industries including the small cars market. Governments of various countries across the globe had imposed lockdowns and strict regulations on traveling to prevent the spread of coronavirus. The lack of workers in the production factories as governments imposed social distancing regulations led to a decrease in the production of small cars which further led to hampering the global market.

Major automotive companies had to postpone their major projects as factories were totally shut down due to the pandemic and this made a major impact on the overall impact on revenue of the automotive industry.

For instance, small cars market sales were 909 thousand vehicles in 2019 and dropped to 756 in 2020. However, with the ease of restrictions post-pandemic, the sales of small cars grew to 938 in 2021.

Small Cars Market Dynamics

Major Drivers

Growth in the number of first-time compact cars buyers and affordable product pricing is expected to drive the market. Fluctuations in fuel prices result in the increasing adoption of electric vehicles and less fuel-consuming vehicles. Rising disposable income boosts the market. Rising investments in manufacturing lightweight and compact cars are further driving the market.

Existing Restraints

The high cost of electric cars is anticipated to restrain the market during the forecast period. Stringent regulation of carbon emissions and the growing adoption of SUVs are expected to hamper the growth of the market.

Emerging Opportunities

Government initiatives are focusing on reducing carbon emissions, which increases the popularity of electric vehicles. Governments across the globe are offering financial incentives, road taxes exemption, and reduced automobile registration costs for purchasing EVs. This is projected to create lucrative opportunities in the market.

Scope of Small Cars Market Report

The report includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Attributes	Details
Report Title	Small Cars Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
Base Year	2022
Historic Data	2016–2021
Forecast Period	2023–2031
Segmentation	Type (Compact and Subcompact), Fuel Type (Petrol, Diesel, Electric, and Hybrid), Distribution Channel (Original Equipment Manufacturers and Aftermarket), and End-use (Passenger cars [Economy and Luxury {Convertible and Non-convertible}] and Sports cars)
Regional Scope	Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
Report Coverage	Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, Market Trends, and Revenue Forecast
Key Players Covered in the Report	Volkswagen AG; Kia Corporation; Hyundai Motor India; Stellantis NV; MARUTI SUZUKI INDIA LIMITED; Renault; BMW Group; TOYOTA MOTOR CORPORATION; Suzuki Motor Corporation; and Honda Motor Co., Ltd.

Small Cars Market Segment Insights

Based on type, the small cars market is divided into compact and subcompact. The compact segment is expected to expand at a significant growth rate during the projection period, as they offer good fuel economy, lower road tax, and are available in affordable price ranges.

Characteristics of compact cars are that they have an interior space between 100 and 109 cubic feet, and are around 161-187 inches in length. They have the capability to seat around four to five passengers. Consumers prefer compact cars as they offer minimum cargo space that allows comfortable seating, which further drives the segment.

The subcompact cars segment is projected to contribute a considerable market share in the coming years, as they offer easy parking and are customizable. It has dimensions of 85-89 cubic feet and is 157-165 inches in length and can seat up to four passengers.

On the basis of fuel type, the global market is segregated into petrol, diesel, electric, and hybrid. The petrol segment is projected to register a considerable CAGR during the forecast period. Petrol cars are conventional types of cars and are easily available. Petrol engines have cost-effective parts, which make after-sales services affordable and some governments of emerging countries are focusing on banning Diesel cars which is further expected to boost the segment in the coming years.

For instance, On May 9, 2023, a panel formed by the Ministry of Petroleum and Natural Gas government of India recommended a ban on the use of diesel-powered four-wheel vehicles by 2027. This is going to be imposed in cities with a population of more than 1 million.

The electric segment is expected to grow at a significant rate during the projection period, due to rising awareness about sustainability and growing pollution concerns. High demand for hybrid vehicles and electric cars is further fueling the segment.

On the basis of distribution channel, the small cars market is bifurcated into original equipment manufacturers (OEM) and aftermarket. The OEM segment is expected to register a robust growth rate during the forecast period, as they offer automaker’s original specifications. OEMs are built with superior-quality materials and have the automaker’s packaging, name, and logo. OEM provides original parts with a warranty which results in segment growth.

The aftermarket segment is anticipated to grow rapidly in the coming years, as they offer options to choose automotive parts from various manufacturers. As there are many options available in the aftermarket, they are available in affordable price ranges. Aftermarket products are easily available in the market through independent dealers and repairers. These factors are expected to drive the segment.

Based on end-use, the market is divided into passenger cars and sports cars. The passenger cars segment is expected to hold a significant market share during the projection period, with the rising preference for small cars from consumers owing to the convenience of parking and car comfort. The passenger cars segment is further bifurcated into economic cars and luxury cars.

Economic cars are available in affordable price ranges. They are easy to maintain and are convenient for a frequent commuter. These types of cars are convenient to use in countries that have crowded cities and high traffic. The demand for economic cars is going to increase in developing countries such as India, China, and Japan. These countries have high populations and more crowded cities across the globe. c.

Luxury cars have high resale value and state-of-the-art technology. Enhanced safety, engine quality, advanced sound systems, and telematic & safety features of luxury small cars are boosting the segment. Luxury cars are made of high-quality interior materials and have features that are not available on lower-class vehicles. This is one of the major factors for the increasing consumer preference for small luxury cars. The luxury cars segment is further classified into convertible and non-convertible.

Convertible cars are gaining popularity as they have a luxurious appearance. They have retractable roofs which allow the visibility of the surroundings. The roof of the convertible cars can be opened or closed based on consumer preference, which helps in segment growth.

The sports cars segment is anticipated to register a considerable CAGR in the coming years, as they provide instant speed and quick acceleration. Sports cars offer advanced road-holding capacity, maneuverability, braking, and less weight-power ratio. These features enhance the sports racing performance and speed, thus fueling the segment of the market.

In terms of region, the global small cars market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Europe is expected to dominate the market during the projection period, due to high sales of small cars specifically, passenger small cars.

Increasing disposable income and rising investments in automotive purchase is expected to boost the regional market. The presence of numerous key players in the region and the easy availability of automotive high performance electric vehicles is further boosting the market in the region.

Asia Pacific is projected to register a rapid contribution to the CAGR in the coming years, due to high product demand in Japan, India, and South Korea. The rapid growth in the expansion of distribution channels and increasing disposable income in the region is fueling the regional market.

Segments

The small cars market has been segmented on the basis of

Type

Compact
Subcompact

Fuel Type

Petrol
Diesel
Electric
Hybrid

Distribution Channel

Original Equipment Manufacturers
Aftermarket

End-use

Passenger cars
- Economy
- Luxury
  - Convertible
  - Non-convertible
Sports cars

Region

Asia Pacific
North America
Latin America
Europe
Middle East & Africa

Key Players

Volkswagen AG
Kia Corporation
Hyundai Motor India
Stellantis NV
MARUTI SUZUKI INDIA LIMITED
Renault
BMW Group
TOYOTA MOTOR CORPORATION
Suzuki Motor Corporation
Honda Motor Co., Ltd.

Competitive Landscape

Key players operating in the global small cars market include Volkswagen AG; Kia Corporation; Hyundai Motor India; Stellantis NV; MARUTI SUZUKI INDIA LIMITED; Renault; BMW Group; TOYOTA MOTOR CORPORATION; Suzuki Motor Corporation; and Honda Motor Co., Ltd.

These companies adopt strategies such as acquisitions, partnerships, collaboration, mergers, R&D investments, and product launches to boost their market share. For instance,

On 24 April 2023, MARUTI SUZUKI INDIA LIMITED launched the Maruti Suzuki Fronx SUV in India after debuting at Auto Expo 2023, Greater Noida.

On 20 January 2023, Hyundai Motor India announced the launch and bookings for the Grand i10 Nios in India.

Small Cars Market Key Players

Table Of Content

1. Executive Summary
2. Assumptions and Acronyms Used
3. Research Methodology
4. Small Cars Market Overview
  4.1. Introduction
     4.1.1. Market Taxonomy
     4.1.2. Market Definition
  4.2. Macro-Economic Factors
     4.2.1. Industry Outlook
  4.3. Small Cars Market Dynamics
     4.3.1. Market Drivers
     4.3.2. Market Restraints
     4.3.3. Opportunity
     4.3.4. Market Trends
  4.4. Small Cars Market - Supply Chain
  4.5. Global Small Cars Market Forecast
     4.5.1. Small Cars Market Size (US$ Mn) and Y-o-Y Growth
     4.5.2. Small Cars Market Size (000â€™ Units) and Y-o-Y Growth
     4.5.3. Small Cars Market Absolute $ Opportunity
5. Global Small Cars Market Analysis and Forecast by Types
  5.1. Market Trends
  5.2. Introduction
     5.2.1. Basis Point Share (BPS) Analysis by Types
     5.2.2. Y-o-Y Growth Projections by Types
  5.3. Small Cars Market Size and Volume Forecast by Types
     5.3.1. Compact
     5.3.2. Subcompact
  5.4. Absolute $ Opportunity Assessment by Types
  5.5. Market Attractiveness/Growth Potential Analysis by Types
6. Global Small Cars Market Analysis and Forecast by End Users
  6.1. Market Trends
  6.2. Introduction
     6.2.1. Basis Point Share (BPS) Analysis by End Users
     6.2.2. Y-o-Y Growth Projections by End Users
  6.3. Small Cars Market Size and Volume Forecast by End Users
     6.3.1. Passenger cars
     6.3.2. Sports cars
  6.4. Absolute $ Opportunity Assessment by End Users
  6.5. Market Attractiveness/Growth Potential Analysis by End Users
7. Global Small Cars Market Analysis and Forecast by Region
  7.1. Market Trends
  7.2. Introduction
     7.2.1. Basis Point Share (BPS) Analysis by Region
     7.2.2. Y-o-Y Growth Projections by Region
  7.3. Small Cars Market Size and Volume Forecast by Region
     7.3.1. North America
     7.3.2. Latin America
     7.3.3. Europe
     7.3.4. Asia Pacific
     7.3.5. Middle East and Africa (MEA)
  7.4. Absolute $ Opportunity Assessment by Region
  7.5. Market Attractiveness/Growth Potential Analysis by Region
  7.6. Global Small Cars Demand Share Forecast, 2019-2026
8. North America Small Cars Market Analysis and Forecast
  8.1. Introduction
     8.1.1. Basis Point Share (BPS) Analysis by Country
     8.1.2. Y-o-Y Growth Projections by Country
  8.2. North America Small Cars Market Size and Volume Forecast by Country
     8.2.1. U.S.
     8.2.2. Canada
  8.3. Absolute $ Opportunity Assessment by Country
  8.4. North America Small Cars Market Size and Volume Forecast by Types
     8.4.1. Compact
     8.4.2. Subcompact
  8.5. Basis Point Share (BPS) Analysis by Types
  8.6. Y-o-Y Growth Projections by Types
  8.7. North America Small Cars Market Size and Volume Forecast by End Users
     8.7.1. Passenger cars
     8.7.2. Sports cars
  8.8. Basis Point Share (BPS) Analysis by End Users
  8.9. Y-o-Y Growth Projections by End Users
  8.10. Market Attractiveness/Growth Potential Analysis
     8.10.1. By Country
     8.10.2. By Product Type
     8.10.3. By Application
  8.11. North America Small Cars Demand Share Forecast, 2019-2026
9. Latin America Small Cars Market Analysis and Forecast
  9.1. Introduction
     9.1.1. Basis Point Share (BPS) Analysis by Country
     9.1.2. Y-o-Y Growth Projections by Country
     9.1.3. Latin America Average Pricing Analysis
  9.2. Latin America Small Cars Market Size and Volume Forecast by Country
      9.2.1. Brazil
      9.2.2. Mexico
      9.2.3. Rest of Latin America
   9.3. Absolute $ Opportunity Assessment by Country
  9.4. Latin America Small Cars Market Size and Volume Forecast by Types
     9.4.1. Compact
     9.4.2. Subcompact
  9.5. Basis Point Share (BPS) Analysis by Types
  9.6. Y-o-Y Growth Projections by Types
  9.7. Latin America Small Cars Market Size and Volume Forecast by End Users
     9.7.1. Passenger cars
     9.7.2. Sports cars
  9.8. Basis Point Share (BPS) Analysis by End Users
  9.9. Y-o-Y Growth Projections by End Users
  9.10. Market Attractiveness/Growth Potential Analysis
     9.10.1. By Country
     9.10.2. By Product Type
     9.10.3. By Application
  9.11. Latin America Small Cars Demand Share Forecast, 2019-2026
10. Europe Small Cars Market Analysis and Forecast
  10.1. Introduction
     10.1.1. Basis Point Share (BPS) Analysis by Country
     10.1.2. Y-o-Y Growth Projections by Country
     10.1.3. Europe Average Pricing Analysis
  10.2. Europe Small Cars Market Size and Volume Forecast by Country
     10.2.1. Germany
     10.2.2. France
     10.2.3. Italy
     10.2.4. U.K.
     10.2.5. Spain
     10.2.6. Russia
     10.2.7. Rest of Europe
  10.3. Absolute $ Opportunity Assessment by Country
  10.4. Europe Small Cars Market Size and Volume Forecast by Types
     10.4.1. Compact
     10.4.2. Subcompact
  10.5. Basis Point Share (BPS) Analysis by Types
  10.6. Y-o-Y Growth Projections by Types
  10.7. Europe Small Cars Market Size and Volume Forecast by End Users
     10.7.1. Passenger cars
     10.7.2. Sports cars
  10.8. Basis Point Share (BPS) Analysis by End Users
  10.9. Y-o-Y Growth Projections by End Users
  10.10. Market Attractiveness/Growth Potential Analysis
     10.10.1. By Country
     10.10.2. By Product Type
     10.10.3. By Application
  10.11. Europe Small Cars Demand Share Forecast, 2019-2026
11. Asia Pacific Small Cars Market Analysis and Forecast
  11.1. Introduction
     11.1.1. Basis Point Share (BPS) Analysis by Country
     11.1.2. Y-o-Y Growth Projections by Country
     11.1.3. Asia Pacific Average Pricing Analysis
  11.2. Asia Pacific Small Cars Market Size and Volume Forecast by Country
     11.2.1. China
     11.2.2. Japan
     11.2.3. South Korea
     11.2.4. India
     11.2.5. Australia
     11.2.6. Rest of Asia Pacific (APAC)
  11.3. Absolute $ Opportunity Assessment by Country
  11.4. Asia Pacific Small Cars Market Size and Volume Forecast by Types
     11.4.1. Compact
     11.4.2. Subcompact
  11.5. Basis Point Share (BPS) Analysis by Types
  11.6. Y-o-Y Growth Projections by Types
  11.7. Asia Pacific Small Cars Market Size and Volume Forecast by End Users
     11.7.1. Passenger cars
     11.7.2. Sports cars
  11.8. Basis Point Share (BPS) Analysis by End Users
  11.9. Y-o-Y Growth Projections by End Users
  11.10. Market Attractiveness/Growth Potential Analysis
     11.10.1. By Country
     11.10.2. By Product Type
     11.10.3. By Application
  11.11. Asia Pacific Small Cars Demand Share Forecast, 2019-2026
12. Middle East & Africa Small Cars Market Analysis and Forecast
  12.1. Introduction
     12.1.1. Basis Point Share (BPS) Analysis by Country
     12.1.2. Y-o-Y Growth Projections by Country
     12.1.3. Middle East & Africa Average Pricing Analysis
  12.2. Middle East & Africa Small Cars Market Size and Volume Forecast by Country
     12.2.1. Saudi Arabia
     12.2.2. South Africa
     12.2.3. UAE
     12.2.4. Rest of Middle East & Africa (MEA)
  12.3. Absolute $ Opportunity Assessment by Country
  12.4. Middle East & Africa Small Cars Market Size and Volume Forecast by Types
     12.4.1. Compact
     12.4.2. Subcompact
  12.5. Basis Point Share (BPS) Analysis by Types
  12.6. Y-o-Y Growth Projections by Types
  12.7. Middle East & Africa Small Cars Market Size and Volume Forecast by End Users
     12.7.1. Passenger cars
     12.7.2. Sports cars
  12.8. Basis Point Share (BPS) Analysis by End Users
  12.9. Y-o-Y Growth Projections by End Users
  12.10. Market Attractiveness/Growth Potential Analysis
     12.10.1. By Country
     12.10.2. By Product Type
     12.10.3. By Application
  12.11. Middle East & Africa Small Cars Demand Share Forecast, 2019-2026
13. Competition Landscape
  13.1. Global Small Cars Market: Market Share Analysis
  13.2. Small Cars Distributors and Customers
  13.3. Small Cars Market: Competitive Dashboard
  13.4. Company Profiles (Details: Overview, Financials, Developments, Strategy)
     13.4.1. Volkswagen AG
     13.4.2. Kia Corporation
     13.4.3. Hyundai Motor India
     13.4.4. Stellantis NV
     13.4.5. MARUTI SUZUKI INDIA LIMITED
     13.4.6. Renault
     13.4.7. BMW Group
     13.4.8. TOYOTA MOTOR CORPORATION
     13.4.9. Suzuki Motor Corporation
     13.4.10. Honda Motor Co., Ltd.

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