The global sports car market was valued at US$31.564 billion in 2019 and is expected to grow at a CAGR of 10.12% over the forecast period to reach a market size of US$56.278 billion in 2025.
The global sports car market growth is closely tied to the change in the number of millionaires and billionaires in many countries worldwide. The world already saw the number of billionaires across the 2100 mark in 2019 and is set to witness a continuous rise over the projected period. An increase in this figure is majorly attributed to the growth of enterprises across all key business sectors, which eventually increases the wealth of business owners. The increase in wealth of business owners tends to increase their spending on luxury goods and services. This very factor is driving the adoption of sports cars by customers in many parts of the globe. For instance, the Asia Pacific, which holds a lot of untapped growth potential for many industrial sectors, and which has remained very lucrative geography for pumping investments by players across industries, is witnessing a continuous surge in the number of billionaires. With this, the sales of sports cars are also witnessing a decent increase across many countries in the Asia Pacific.
According to data published by Singapore's Land Transport Authority, total registrations of Porsche cars in Singapore in 2017 jumped up by around 10% as the figure stood at 677 units in 2017 as compared to 563 units in 2016. In China, deliveries of Porsche cars surged by around 4% in 2018, thus translating into a total shipment of 56,254 units. Since the sports and luxury vehicle maker sees good growth potential in this region, it announced its plans to continue focusing on many other markets across the region. Other manufacturers of sports cars are also focusing on this region with an aim of tapping the growth potential held by it. Lotus, for instance, which is one of the key British carmakers, has plans to commence production of cars in China under Geely by 2021. Geely has already started the process of recruitment after the local authorities gave a green signal to its RMB 9 billion manufacturing plant.
Tesla, another key player in the sports car segment, is eyeing Shanghai to build a new vehicle manufacturing facility as part of its efforts to solidify its presence in China. While the Asia Pacific is just one example of lucrative sports car markets, many other regions are also seeing the market registering good year-on-year growth. Since target customers of expensive sports car manufacturers have, for long, remained highly inclined towards ways in which they can stand out of the rest of the league, sales of sports cars with some unique specifications is picking up pace. This is spurring the sales of electric sports cars in many regions, thus augmenting the market growth.
Furthermore, the market growth is further being augmented by the pumping of fairly huge investments by industry players into research and development. Countries that are known for having infrastructure advanced enough to support research and development activities across the automotive sector are already moving ahead of many other countries in innovation. Germany, for instance, continues to lead the world in automotive research and development. According to data published by the German Association of the Automotive Industry (VDA), more than one-third of the total spending in automotive research and development each year flows into Germany. Not just, more than a quarter of the country’s total workforce in research and development is accounted for by the German automotive industry. The value of total investments into alternate propulsion systems by companies in Germany was anticipated to reach €40 billion by 2020. Although this target seems too distant to be achieved, since the outbreak of novel coronavirus disease and widespread disruption caused by it across the industry have weakened the industry players to some extent, the country, which boasts of holding nearly one-third of all patents which have been filed in the field of electric mobility and hybrid drives worldwide, can still be seen as one of the frontrunners in the race.
Many other countries in different parts of the world are also expected to funnel investments into research and development in the automotive sector over the short term and medium term. One of the key reasons for this is expected to be the current condition of the industry. The global automotive industry has been witnessing a continuous decline in automotive sales over the last couple of years. This shrink in sales is translating into a continuous decline in the production of vehicles worldwide. This is the first time since the global recession, which kicked in in 2007 and lasted till 2009, that the industry has started witnessing a downturn. The only difference is that this time it was not because of the poor spending capacity of people, but because of the high penetration of vehicles in many regions and the high popularity of alternate methods of transportation.
As if this was not enough, the industry took another blow because of the exponential spread of the novel coronavirus disease worldwide. With supply chains disrupted, the global automotive industry now stands on a two-way where success in bringing about some disruptive technologies and solutions can reignite the growth engines. So the flow of investments into R&D in the automotive sector is not confined to developed markets across North America and Europe, as all key markets are witnessing a continuous flow of investments. For instance, the government of Israel, as part of its attempt to strengthen the country’s automotive sector, adopted Resolution No.2316, which is giving a push to Israel’s automotive industry, thus aiding it in becoming a world leader in smart mobility. The country already has a strong presence of research and development facilities owned by key automakers such as Daimler AG, General Motors, and Porsche. As the R&D engine of sports car manufacturers continues to get the required boost, we anticipate some major improvements in their aesthetics and performance over the period of our study.
While many sports car manufacturers are focusing on increasing the power output of people’s dream cars, as they seek to lure many new speed enthusiasts while offering customers the next level of driving experience, we see many market players pumping investments in better and more appealing sports car designs. For instance, Ford has again given birth to the 55-year-old legacy of Mustang with the launch of GT350 and GT350R. The heritage edition package, which comes with Guardsman Blue over-the-top racing stripes and unique Guardsman Blue side stripe on Wimbledon White exterior paint, and heritage interior chassis badge, is the brand’s homage to the original Mustang GT350.
The year 2020 also saw the reincarnation of the original Mustang in the form of Shelby GT500 along with EcoBoost® and GT Mustang convertibles for enthusiasts. With these offerings, the company also allows its customers to choose from among 18 different styles of wheels and color choices along with offering them many more possible customization options for their ride. Investments like these by market players are translating into an increase in spending by potential customers on sports cars, thus boosting the market growth. As we continue to move ahead, we expect the entry of many new automakers into this segment on account of the huge growth potential held by it. This is expected to result in a further increase in the sales of sports cars, thus propelling the market growth.
Geographically, the sports car market has been segmented into North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. To give a clearer view of the market, North America, Europe, and Asia Pacific sports car markets have been further segmented into countries that account for a considerable market share. North America and Europe together account for a significant market share. The presence of a fairly large number of billionaires and millionaires in these regions has been a major driving factor for this market.
The Asia Pacific sports car market is poised to register good growth over the period of our study. Much of the market growth in this region comes from countries like Japan, China, and South Korea which account for a significant share of sports car sales in the region. The South American sports car market and the Middle East and Africa sports car market are relatively small. Yet, these regional markets are expected to show fairly decent growth over the projected period.
Prominent key market players in the sports car market include Ford Motor Company, AUDI AG, BMW AG, Ferrari, McLaren Group, Porsche, and Acura. These companies hold a noteworthy share in the market on account of their good brand image and product offerings. Major players in the sports car market have been covered along with their relative competitive position and strategies. The report also mentions recent deals and investments of different market players over the last two years.
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