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$123+ Billion Automotive Interior Market (2022 to 2027)


The global automotive interior market is estimated to grow at a CAGR of 4.5% during the forecast period, from USD 123.2 billion in 2020 to USD 153.8 billion by 2025. The automotive industry is continuously evolving, with an increasing focus on semi-autonomous and autonomous vehicle technologies. Several vehicle manufacturers have showcased their new concept cars with autonomous and connected car technologies.

These cars, with their advanced technologies and radical designs, are expected to hit the market soon. The interiors in these cars need to provide comfort and convenience and should have the latest technology incorporated. The increasing demand for advanced automotive interior solutions and systems can be attributed to advances in semi-autonomous and autonomous technologies.

BEV segment is projected to be the fastest-growing electric vehicle during the forecast period

The demand for BEVs is expected to increase in the coming years due to an increase in the adoption of strict emission norms by governments of various countries. Several governments now provide subsidies for the use of environment-friendly vehicles, thereby encouraging the use of electric vehicles. Stringent emission regulations in the US, particularly in states such as California and New York, have led to increased sales of electric vehicles.

Electric vehicles tend to have a higher number of electronics/advanced systems. Thus, the growing number of electric vehicles will result in an increased demand for advanced automotive interior systems. In Europe, the market for BEVs is estimated to grow due to emission regulation mandates and the development of electric vehicle infrastructure. OEMs are also expanding their manufacturing facilities worldwide to increase the production of electric vehicles.

For instance, in August 2017, Tesla announced its plan to raise USD 1.5 billion to fund the development of its cheapest electric car, which proves the aggressiveness of manufacturers in the market.

The passenger car segment is estimated to be the largest automotive interior market, by vehicle

The passenger car segment is projected to have the largest share of the automotive interior market during the forecast period. The increasing purchasing power of consumers, growing sales of semi-luxury & luxury vehicles, and high demand for convenience features are expected to boost the passenger car segment. The advent of semi-autonomous and autonomous vehicles is also attributed to the overall growth of the market. Passenger vehicles are the most focused segment for automotive interior manufacturers.

The technologies used in this type of vehicle are frequently changing due to the high demand from consumers for luxurious and convenient features. Also, government regulations for emissions and safety are frequently changing. The manufacturers must reduce the weight of passenger vehicles and offer comfort and safety to the consumers at a lower price.

Due to the increasing demand for autonomous and electric vehicles, the electronic content is frequently increasing in passenger vehicle interiors, which, in turn, is driving the growth of the passenger vehicle interior market.

Europe automotive interior market is projected to grow at a significant rate during the forecast period

The major growth drivers for the European automotive interior market include the growing demand for technology, the rising need for a safe and secure driving experience, and an increase in the development of connected cars.

Significant demand for high-end premium vehicles with advanced interior features and technologies such as HUD, powered & heated seats with massage function, center stack, rear-seat entertainment, and interior/ambient lighting are fuelling the growth in the region.

Also, the region has the presence of renowned automotive interior component providers, such as Continental, Grupo Antolin, Faurecia, and Robert Bosch GmbH are the major players in this region. The presence of major automobile manufacturers, combined with technological prowess, would result in a significant rise in the demand for advanced interior systems and components in Europe.

Market Dynamics


  • Increasing Customer Preference for Convenience, Premium Features, and Advanced Safety
  • Use of Variety of Lightweight & Advanced Materials and Innovative Finish
  • Integration of Smartphone Connectivity
  • Enhanced Functionalities in Lighting
  • Rise in Demand for SUVs to Fuel Demand for Modular Seats


  • High-Cost Involved, and Volatility in Raw Material Costs
  • Significant Power Consumption in Automotive Interior Electronics
  • Increased Competition from Local Companies Offering Counterfeit/Retrofit Solutions


  • Growing Demand for Electric Vehicles
  • Rising Trend of Semi-Autonomous & Autonomous Vehicles
  • Growing Trend of Interior Customization in Premium Vehicles and Interior Styling
  • Advanced Lightweight Mechanism for Automotive Seats
  • New Entertainment and Smart Mirror Applications
  • Focus on 5G and Wireless Technology


  • Long Production Cycle Time
  • Decline in Vehicle Sales and Production Due to Semiconductor Shortage and COVID-19 Pandemic
  • High Cost of Advanced Automotive Display Systems
  • Presence of Unorganized Aftermarket
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