Global Automotive Industry 2022: Trends and Learnings

As 2022 ends, reflecting on the positive and negative achievements experienced across different sectors, especially the automotive industry, which has weathered the storm of supply chain shortages, inflation, and innovations, is quintessential. This would help track development and opportunities for a successful automotive business in 2023.

Due to disruptions, the global automotive industry has undoubtedly experienced enormous changes within the last three years. Sustainability policies, the economy, and consumer behaviour drive these changes. As the world reaches for a more sustainable environment and society, the automobile industry dives deeper into environmental technologies and eco-friendly driving. These efforts have birthed innovations that withered impossibility. Examples are the first-ever flying car by Alef Aeronautics, 'Model A,' Dacia's Manifesto, and the hydrogen-powered 'Machina Vision Sedan.' They reflect the level of disruptions and innovations in the industry in 2022.

Here are some of the highlights

1. Electric vehicle adoption was up by 54% in 2022. According to International Energy Agency research, the world needs 2 billion electric vehicles to reach net-zero emissions by 2030. And in 2022, the global electric vehicle market reached 10.2 million from 6.6 million EVs in 2021. This results from the drive for sustainable mobility and the fuel crisis in 2022.?
2. China still leads electric vehicle production globally, while Europe overtakes EV demand, government support, and other EV market metrics.
3. Major automobile manufacturers and OEMs have also focused on increasing automobile battery efficiencies in 2022. An example is Lightyear 0, a solar-ready car that imbues its strategy of delivering more range with less battery, reducing weight and CO? emissions per vehicle. It has an optimised solar roof and can travel for days without being charged.
4. The online buying market is increasing at a fast pace globally. The global online market reached $294.2 billion in 2022 from $36.67 billion in 2021. Reasons behind the increasing popularity of online car buying include the surge of digital literacy, social media, rapid urbanisation, and convenience.
5. Layoffs also characterised the automobile industry in 2022. As automobile companies face higher interest rates and changes in customer behaviour, they redefined their business scopes, reducing the production of internal combustion vehicles and staff while increasing the strength of electric vehicle productions. Tesla cut 3,500 jobs in June. Likewise, Caravan and Rivian did the same in 2022. TuSimple, an autonomous driving truck company, is also set to lay off 25% of its staff in December.
6. Toyota and Mercedes-Benz remain the leaders of the Brand Finance Automobile 100 2022 Most Valued Brand ranking because of their contingency stockpiling and fast innovation adoption.
7. There have been various degrees of partnerships in the global automotive industry. This partnership cuts across automobile software, autonomous driving, EV chargers, and many more. I wrote an article about automobile partnerships this year. Read more.
8. According to an S&P study earlier in 2022, automobile manufacturers will produce 5 million fewer cars in 2022 and 2023 due to Russia's invasion of Ukraine and supply chain shortage. This year's total automobile production is about 81.6 million. The International Organisation of Motor Vehicle Manufacturers (OICA) further classified the total number of vehicles produced in 2022 by country. China took the lead with 26.1 M cars, followed by the United States and Japan. African countries that made the top 31 car production list were South Africa, Morocco, and Egypt.
9. There is also increasing investment in the ride-sharing business in 2022. The common types are car rental, station-based, car sharing, and e-hailing. While Uber crossed one billion rides in Africa in May 2022, there has been competition. The new ride-hailing companies in Nigeria and Africa include Careem, Didi, Taxify, LoadMoto, LoadMoto, LagosRide, OgaTaxi, and SmartCab, among others. The global ride-hailing industry is also expected to grow at a 15% rate yearly, reaching $61.1 billion in 2022 at a compound annual growth rate (CAGR) of 14.8%.
10. Generally, car sales in Africa have defied all odds, with a 32% recovery as of June 2022. South Africa recorded an 18.2% growth in vehicle sales in November compared to October 2022. And 81% of these automobile sales came through dealerships, according to Automotive Business Council Naamsa.?

Based on these, 2022 is about redefining the automotive industry through improved electric cars, batteries, and designs. Some major drivers of electric vehicles apart from Tesla are BMW, BYD, General Motors, Mercedes, NIO, Nissan, Renault, and Volkswagen.

This wave of change is incomparable to the automotive industry of the earlier years, when trends and future growth are easily predictable.

Besides this, 2023 is promising to be more disruptive with an advanced focus on value-added experience with self-driving, cloud computing, electric vehicles, machine learning, blockchain, and networking.

How ready are you for 2023?