The SUV market is projected to grow from USD 885.8 billion in 2022 to USD 1,221.7 billion in 2027, at a CAGR of 6.6%. The SUVs are well known for using high-end materials and have a sporty look. The off-road capabilities of SUVs are driving their demand in US and European countries. The growing demand for premium cars with increased comfort features would create potential demand for luxury SUVs in the coming years. Similarly, the increasing trend of electrification worldwide would create demand for electric SUVs and components such as batteries and motors.
Strong demand for SUVs is noticed in countries such as China, India, and Japan, where the demand for entry-level and mid-sized SUVs is growing in India and China. The key reasons for this growth are – multiple SUV launches with advanced features by almost all OEMs, competitive pricing of compact SUVs as compared with sedans, and other benefits offered by SUVs such as high ground clearance, robustness, and maneuverability.
5-seater segment would lead the SUV market
All the mini, compact, and some mid-size SUVs are offered with 2-row seats and five-passenger seating capability. The demand for mini, compact and mid-size SUVs in the Asia Pacific and European are expected to drive this segment. Rising per capita income, growing prosperity, and urbanization in Asian countries influence young buyers to choose stylishly and feature-rich cars, which ultimately would drive the 5-seater SUV market in the Asia Pacific.
Further, premium mid-size SUVs have noticed substantial demand in European countries as these cars with 5-seater configurations offer large seating space and larger boot space. Due to this, many European OEMs such as Volkswagen, BMW, Mercedes-Benz, Skoda, and Audi provide a broad portfolio of mid-size SUVs to gain a competitive edge in the regional market. These factors together fuel the 5-seater SUV market in these regions.
Class D SUV segment holds the largest market share in SUV market
The class D SUVs accounted for the largest market share in the global SUV market, owing to the rising adoption of class D SUVs in developing countries such as India, China, and Thailand. Further, class-D SUVs are mostly mid-size and full-size SUVs with two or three rows of seating options and ample boot space. These vehicles are equipped with powerful engines with 4-wheel or all-wheel drive options, providing better tractability.
Plus, SUVs under this class are available in mid to premium price range, which allows OEMs to include descent features to improve in-vehicle feel and comfort. OEMs such as Volkswagen, Lexus, Mercedes-Benz, BMW, Cadillac, Land Rover, and Buick deliver a broad array of SUVs in the global market. Hence, the demand for the class D segment will continue to grow.