Luxury Car Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Luxury Car Market is Segmented by Vehicle Type (Hatchback, Sedan, SUVs, and MPVs), Drive Type (IC Engine and Electric), and Geography (North America, Europe, Asia-Pacific, and the Rest of the World). The report offers the market size and forecast in terms of value (USD billion) for the above segments.

Luxury Car Industry Overview

Luxury Car Market Summary
Study Period: 2018 - 2028
Fastest Growing Market: Asia-Pacific
Largest Market: Asia-Pacific
CAGR: 5 %

Major Players


*Disclaimer: Major Players sorted in no particular order


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Luxury Car Market Analysis

The luxury car market was valued at around USD 440 billion. The market is projected to reach USD 600 billion, with a CAGR of approximately 5% during the forecast period.

The COVID-19 pandemic had a significantly negative impact on the luxury car market in the short term as sales and production witnessed a decline in 2020. Furthermore, the pandemic affected the spending power of every individual. However, after the restrictions were lifted, the market regained its lost momentum.

Over the medium term, luxury cars provide a high level of comfort and safety features, creating opportunities for the market. Moreover, the growing trend of electric luxury vehicles is fueling the demand for luxury cars across the globe.

Significant growth of tangible luxury offerings in vehicles, shifting consumer preferences from sedans to SUVs, and increasing disposable incomes of consumers have been propelling the demand for luxury cars worldwide. However, an increase in import tariffs is expected to hinder the growth of the luxury car market. For instance, the US President-elect is expected to increase import tariffs on German luxury cars. BMW and other German luxury car manufacturers may face a 35% import duty on cars not built in the United States.

Luxury cars provide a high level of comfort and safety features, creating opportunities for the market. Moreover, the growing trend of electric luxury vehicles worldwide fuels the demand for luxury cars. Major luxury car manufacturers are launching electric variants of their vehicles due to growing environmental concerns and increasing fuel prices, which may accelerate the growth of the luxury car market during the forecast period.

Luxury Car Industry Segments

The term luxury is used to categorize vehicles that are equipped with better performance capabilities, lavish interiors, and all the latest safety and technology features.

The luxury car market is segmented by vehicle type, drive type, and geography. Based on the vehicle type, the market is segmented into hatchbacks, sedans, SUVs, and MPVs. Based on the drive type, the market is segmented into IC engines and electric. Based on geography, the market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World. For each segment, the market sizing and forecast have been done on the basis of value (USD billion).

Vehicle Type
Sports Utility Vehicles and Multi-Purpose Vehicles
Drive Type
IC Engine
North America
United States
Rest of North America
United Kingdom
Rest of Europe
South Korea
Rest of Asia-Pacific
Rest of the World
South America
Middle East and Africa

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Luxury Car Market Trends

This section covers the major market trends shaping the Luxury Car Market according to our research experts:

IC Engines are Expected to Witness a Slow Growth Rate

The IC engine segment currently leads the market. However, the demand for IC engine vehicles is anticipated to slow down during the forecast period. At present, major players, such as Mercedes-Benz, BMW, and Audi, cover a significant percentage of the share in the drive-type segment of the luxury car market.

With growing environmental concerns due to rising exhaust emissions, governments and environmental associations worldwide are tightening emission norms. As a result, the demand for sustainable and eco-friendly transportation, such as EVs, is increasing, with governments offering more incentives and subsidies to these vehicle owners. For instance, China registered the highest number of new EV registrations in 2020. However, North America is expected to lead luxury EV sales due to higher disposable incomes and the availability of EV infrastructure in the region.

Automakers are launching EVs even in developing markets. For instance, in August 2020, Mercedes-Benz announced the start of sales of its first electric vehicle, the EQC 400, through its dealer network in Brazil. The growing demand for and focus on style, power, and advanced telematics may continue to propel the demand for luxury EVs.

Additionally, luxury car component manufacturers are focusing on developing next-generation smart mobility technologies, such as autonomous driving, personal voice assistance, and retinal recognition, which are expected to boost the sales of luxury EVs over the forecast period.

key market trend 1

Asia-Pacific is Expected to Lead the Market

Currently, China has the highest growth potential among all the developing countries in the luxury car market. Premium carmakers, such as Audi, Mercedes-Benz, BMW, Lexus, and Volvo, have always maintained positive growth in the Chinese luxury car market. According to the China Automobile Dealers Association, the country's luxury car dealers sold 277,000 vehicles in April 2020, an 11.1% increase over April 2019. Luxury car sales accounted for 18.7% of the market in April 2020, representing a 3.6% rise over April 2019 and a 0.4% increase over the market share in March.

Moreover, the demand for luxury SUVs has been growing rapidly in the country and is expected to continue during the forecast period, as they offer extra space and comfort. Audi, BMW, and Mercedes plan to launch new luxury models at competitive prices in the country.

As a result of the pandemic, when the supply chain of major European carmakers was disrupted, it created an opportunity for local companies to introduce their luxury models. For instance, the 2020 Hongqi H9 was designed by Rolls-Royce's ex-designer Giles Taylor and another stylist Dinh Yanfeng. In China, Hongqi cars are only available for high-ranking government officials. China is also one of the biggest markets for Mercedes-Maybach. In 2019, Mercedes-Benz sold around 12,000 luxury Maybachs in the country.

India is also one of the fastest-growing markets in Asia-Pacific. However, owing to COVID-19, the market witnessed its lowest figure. For instance, according to the Federation of Automobile Dealers Associations (FADA), the data for new vehicle registrations in July 2020 revealed that the overall share of luxury car players in the total passenger vehicle market contracted to 0.50% in the month, compared to 1.11% for the same month last year.

In India, Mercedes-Benz, BMW, and Audi are the top luxury car manufacturers. These car manufacturers collectively reported sales of around 22,500 units in 2021.

As luxury car manufacturers are launching multiple models with various price ranges and user-friendly financing schemes, the demand for luxury cars is expected to rise in the country.

Mercedes and BMW dominate the luxury sedan segment of the Indian market. In the first three months of 2020, Mercedes sold 2,386 units, followed by BMW India, which delivered 2,365 units. After a decline in the second quarter due to the pandemic, the market gradually started gaining momentum in the last quarter. Moreover, in 2020, Mercedes-Benz India sold over 7,893 new cars from January to December.

key market trend 2

Luxury Car Market Competitor Analysis

Some of the key players in the luxury car market are Mercedes-Benz, BMW, Volkswagen Group, and Tesla. The market is highly driven by factors like advanced technology, more comfort, growing investment in EV technology, and improved living standards worldwide. For instance,

  • In October 2022, Mercedes Benz, Stellantis, Siemens, and TotalEnergies agreed to a joint venture for the construction of three gigafactories in Europe to aid electric vehicle manufacturing.
  • In June 2022, Ferrari planned to expand vehicle manufacturing facilities across Italy. Through this expansion, the company expanded its premium vehicle portfolio across the country.
  • In June 2021, Mercedes-Benz launched the Mercedes-Maybach GLS 600, the first SUV ever to carry the Maybach brand name.
  • In January 2021, Mercedes-Benz India announced its plans to introduce 15 products to the Indian market. A-Class Limousine, the new GLA, and AMG GT Black Series were some of the vehicle models lined up for a 2021 debut.

Luxury Car Market Top Players

  1. Jaguar Land Rover Automotive PLC

  2. Volkswagen Group

  3. Tesla Inc.

  4. Mercedes-Benz Group AG

  5. BMW AG

*Disclaimer: Major Players sorted in no particular order

Luxury Vehicle Market - CL.png

Luxury Car Market Recent Developments

  • In January 2022, Mercedes Benz launched the first luxury electric vehicle in India, the EQC SUV. The vehicle is powered by two asynchronous motors, one on each axle, producing a combined 408 hp and 765 Nm of torque. A floor-mounted 85kWh lithium-ion battery pack can deliver a WLTP-certified range of 400 km on a single charge.
  • In December 2021, BMW AG launched the BMW iX in India. The vehicle generates 326 hp of power and 630 Nm of peak torque with a range of up to 414 km on a single charge.
  • In June 2021, Range Rover launched the Range Rover Sport SVR, which is the highest-performance iteration of the Range Rover Sport. The SUV gets features such as heated front and rear seats, driver condition monitor aid, 360-degree parking aid, and many other features.
  • In January 2021, Hongqi launched its three models (H9, H5, and HS5) in Kuwait. The company will sell its vehicles in cooperation with Kuwaiti dealer Al Khalid Auto.
  • In January 2021, Bentley introduced its hybrid model following the launches of the updated Bentayga V8 and Bentayga Speed. The Bentayga Hybrid is the company's third model in its luxury SUV portfolio.

Luxury Car Market Report - Table of Contents


    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study




    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION (Market Size in Value - USD Billion)

    1. 5.1 Vehicle Type

      1. 5.1.1 Hatchback

      2. 5.1.2 Sedan

      3. 5.1.3 Sports Utility Vehicles and Multi-Purpose Vehicles

    2. 5.2 Drive Type

      1. 5.2.1 IC Engine

      2. 5.2.2 Electric

    3. 5.3 Geography

      1. 5.3.1 North America

        1. United States

        2. Canada

        3. Rest of North America

      2. 5.3.2 Europe

        1. Germany

        2. United Kingdom

        3. France

        4. Spain

        5. Rest of Europe

      3. 5.3.3 Asia-Pacific

        1. China

        2. Japan

        3. India

        4. South Korea

        5. Rest of Asia-Pacific

      4. 5.3.4 Rest of the World

        1. South America

        2. Middle East and Africa


    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles*

      1. 6.2.1 Mercedes-Benz Group AG

      2. 6.2.2 BMW AG

      3. 6.2.3 Volvo Group

      4. 6.2.4 Volkswagen Group

      5. 6.2.5 Jaguar Land Rover Automotive PLC

      6. 6.2.6 Fiat Chrysler Automobiles

      7. 6.2.7 Ford Motor Company

      8. 6.2.8 FAW Car Company

      9. 6.2.9 Hyundai Motor Group

      10. 6.2.10 Tesla Inc.


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Luxury Car Market Research FAQs

The Luxury Car Market is studied from 2018 - 2028.

The Luxury Car Market is growing at a CAGR of 5% over the next 5 years.

The Luxury Car Market is valued at 440 Billion USD in 2018.

The Luxury Car Market is valued at 600 Billion USD in 2028.

Asia-Pacific is growing at the highest CAGR over 2018 - 2028.

Asia-Pacific holds highest share in 2021.

Jaguar Land Rover Automotive PLC, Volkswagen Group, Tesla Inc., Mercedes-Benz Group AG, BMW AG are the major companies operating in Luxury Car Market.

Luxury Car Industry Reports

In-depth industry statistics and market share insights of the Luxury Car sector for 2020, 2021, and 2022. The Luxury Car research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Luxury Car report PDF.

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