Market Overview:
Fuel efficient vehicles use alternative fuels or have higher fuel economy compared to conventional vehicles. Such vehicles have lower emissions and higher fuel economy rating which helps save costs on fuel as well as reduce carbon footprint. The demand for fuel efficient vehicles is growing across Asia owing to rising fuel costs and stringent emission norms.
Market key trends:
One of the major trends driving the growth of Asia fuel efficient vehicles market is rising fuel costs. Asia is dependent on crude oil imports for meeting its fuel needs. With continuous rise in crude oil prices globally, fuel prices have also increased sharply across different Asian countries like India, China, Japan, and South Korea in recent years. This has boosted the sales of electric, hybrid, CNG vehicles and other fuel-efficient models as they help save significantly on fuel costs. Moreover, governments across the region have introduced various incentives and subsidies for purchasing fuel efficient vehicles to promote their adoption. Strict emission regulations have also been enforced aiming to cut emissions from transportation sector. Such regulatory pushes are encouraging automakers to invest more in developing greener vehicles, thus positively impacting the market growth.
The global Asia (Japan, South Korea, China, India, Asean) Fuel Efficient Vehicles Market Demand is estimated to be valued at US$ 1,013.82 Bn in 2023 and is expected to exhibit a CAGR of 7.9% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Porter’s Analysis:
Threat of new entrants: New players find it difficult to enter the market owing to high R&D, technology and manufacturing costs required to produce fuel efficient vehicles.
Bargaining power of buyers: Buyers have significant bargaining power due to presence of various established players providing a wide range of options.
Bargaining power of suppliers: Major auto component manufacturers across the region act as key suppliers with specialized expertise, thus enjoying strong bargaining power.
Threat of new substitutes: Electric vehicles pose a threat, however high costs and limited charging infra hamper mass adoption currently.
Competitive rivalry: Intense competition exists between regional and global players to gain market share through new technologies, features and after-sales services.
SWOT Analysis:
Strengths: Strong presence of leading Japanese, South Korean and Chinese automakers with expertise in green technologies.
Weaknesses: Infrastructure constraints like lack of charging stations limit EV adoption. Higher costs of new-age fuels also act as a deterrent for some buyers.
Opportunities: Growing environmental concerns and supportive regulations pave way for greater uptake of hybrids, EVs and alternate fuels. Rising disposable incomes in developing nations boost demand.
Threats: Economic slowdowns impact sales, while regional geopolitical tensions affect exports between key nations. Rising raw material costs also squeeze margins.
Key Takeaways:
The Asia (Japan, South Korea, China, India, ASEAN) Fuel Efficient Vehicles market is expected to witness high growth at a CAGR of 7.9% over 2022-2030, driven by stringent emission norms and tax rebates for green vehicles in major countries. China dominates the regional market owing to the largest EV production and sales, followed by Japan and South Korea experiencing fast EV adoption rates backed by nationwide charging networks and purchase subsidies.
Regional analysis: China holds the major share in the Asia market currently accounting for over 40% of sales led by growing electric two wheeler and passenger vehicle fleets. Governments offer substantial purchase incentives to increase EV penetration to 25% of total new car sales by 2025. Japan and South Korea are other major markets exhibiting over 7% CAGR led by technological prowess and policy push for hybrids and battery EVs. Emerging nations like India are establishing charging corridors and promoting EVs for commercial fleets to drive future demand.
Key players: Key players operating in the Asia (Japan, South Korea, China, India, ASEAN) Fuel Efficient Vehicles market are Toyota Motor Corporation (Japan), Honda Motor Co., Ltd. (Japan), Hyundai Motor Company (South Korea), Kia Corporation (South Korea), Nissan Motor Co., Ltd. (Japan), BYD Auto Co., Ltd. (China).
