Global Auto Market Shake-Up: Which Regions Are Emerging as New Goldmines for Auto Parts Suppliers?

The global auto market is undergoing significant changes due to intensifying global competition and the shifts towards electrification and sustainable mobility.  The Anchor Group, a prominent Chinese international auto parts supplier, has compiled global regional vehicle production data from OICA for the period 2014-2024 to analyze market trends in the automotive sector, offering insights for the auto parts industry. The major findings are as follows:

• The global auto market shows a pattern of Asia dominating, Europe declining, America stabilizing, and Africa rising.

• Portugal and Uzbekistan have achieved remarkable leaps in the automotive industry over the past decade, securing gold and silver medals in terms of average annual growth rate. 

• China remains the car manufacturing powerhouse, accounting for  31.3 million units in 2024, representing 32.1% of global production.

• Traditional powerhouses like Germany, Japan, and the U.S. show a clear decline in automotive production.

 Asia Leads, Europe Lags, America Holds, Africa Grows

Global vehicle production reached 92.504 million units in 2024, reflecting a 30% increase over the past decade. In Asia-Oceania, production followed a fluctuating upward trend, with declines in 2019 and 2021 before a strong recovery, solidifying the region’s leading role in global automotive manufacturing, while Europe saw steady growth at about 2.68% annually from 2014 to 2018, followed by a downturn and a partial rebound that has yet to reach its prior peak. In contrast, the Americas experienced relatively stable production with minor fluctuations. However, a significant decline in 2021 gave way to a modest recovery, demonstrating resilience amid global economic changes. In Africa (excluding Egypt), production grew steadily from a small base, indicating a developing market with notable potential. 

Global auto production hit rock bottom in 2021, mainly due to the pandemic aftermath. In early 2020, COVID-19 factory closures caused major production delays. In 2021, the semiconductor shortage from the 2020 chip output drop disrupted vehicle manufacturing, halting key parts production. Statista says around 11.3 million vehicles were cut from the 2021 global output amid the shortage.

Portugal and Uzbekistan: Achieving leopard-like leaps in Car Production over a decade, securing gold and silver medals in average annual growth rate

While starting from smaller production bases, Portugal and Uzbekistan are emerging as notable players in the global automotive industry, with compound annual growth rates of 7.49% and 5.75%, respectively, in the past ten years.

Portugal’s surprising growth comes from its export-oriented nature of the automotive industry, which compels enterprises to enhance their international competitiveness. Besides, the evident industrial cluster advantages featuring a high supply chain density, favorable labor cost-effectiveness, and a high density of engineers that ranks among the top in the EU have enhanced this growth. In addition,  the country benefits from government support, with the introduction of the “Auto 2030” plan, which offers tax credits of up to 45% for investment in electric vehicles, further spurring the increase. 

Uzbekistan’s automotive growth is attributed to policy protection measures (such as localization requirements), the transfer of Chinese electric vehicle technology, and measures to activate the consumer market, such as providing financing convenience and restricting the trade of used cars.

Although both countries have witnessed rapid growth in their automotive production, their development paths differ significantly. Portugal’s automotive industry is deeply integrated into the EU market, technological resources, and market demand to drive growth. In contrast, Uzbekistan relies more on its policies, external technology introduction, and domestic market activation, adopting a relatively closed-loop development model. 

Traditional Automotive Powerhouses Are in Decline, with a Significant Drop in Production

Data shows that over the past decade, the production volumes of traditional automobile-manufacturing powerhouses Germany, Japan, and the United States have all declined. Germany has seen an average annual decrease of 3.66%, Japan a decrease of 1.7%, and the U.S. a decrease of 0.98%.

The decrease stems from multiple challenges. First, the automotive markets in the above countries appear to be saturated, and there has been a noticeable decline in young people’s inclination to purchase cars due to various factors, such as changing lifestyles, the growing popularity of alternative options, or economic considerations. Secondly, the pace at which these traditional automakers have been transitioning to electrification and sustainable mobility has been relatively sluggish. While they are making efforts in this direction, external factors like rapid technological advancements in the electric vehicle sector and the aggressive strategies of new entrants have made their progress seem slow in comparison. Moreover, high costs, including rising raw material prices and labor expenses, have taken a toll on their competitiveness. In addition, the rise of emerging manufacturing countries such as India and Mexico has accelerated the loss of market share. All of these factors have collectively led to the decline of traditional carmakers. 

China Still Firmly Sits Atop the Automotive Production Pyramid

Despite a modest decade-long compound annual growth rate of 2.8% — merely one-third of Portugal’s leading 7.49% — China has maintained its position as the largest automobile manufacturer in the world. Leveraging unparalleled industrial scale and manufacturing capacity, the nation accounted for over 31.3 million units in 2024, representing 32.1% of global production.

The core driving forces behind China’s continuous global leadership in automobile production lie in its advantages across the entire industrial chain and the dual-wheel drive of policy and market. Industrial clusters in the Yangtze River and the Pearl River Deltas have formed a complete supply chain ranging from raw materials to intelligent terminals. Core components have achieved full localized supply, significantly reducing production costs. The government has strongly guided industrial transformation through new-energy vehicle subsidies and the dual-credit policy. Meanwhile, the world’s largest single consumer market has attracted international automakers such as Tesla to deploy excess production capacity in China. China’s overtaking in the fields of power batteries and intelligent connected vehicle technologies has further consolidated its dual advantages of”Manufacturing + Innovation”.

 Where do Auto Parts suppliers Invest Next?

• Auto parts suppliers should adjust their strategies in line with the new trends in the global automotive market. Asia, especially China, is a crucial market for layout due to its large industrial scale, complete industrial chain, and dual drivers of policy and market. They can strengthen cooperation with Chinese automakers to leverage their cost advantages and innovative achievements.
•  Although the European market is declining, Portugal shows potential because of its export-oriented nature, industrial cluster advantages, and policy support. Auto parts manufacturers can pay attention to the demand in the electric vehicle sector. 
• In emerging countries like Uzbekistan, driven by policy protection and technology introduction, auto parts suppliers may consider technology output or cooperation. Meanwhile, although traditional automotive powerhouses have saturated markets and slow transitions, there is still demand. Auto parts suppliers can provide cost-effective products to cope with their cost pressures. 
• In addition, they should focus on technological iterations, increase investment in the research, development, and production of new energy vehicle components, to adapt to the global trend of electrification and sustainable mobility, seize opportunities in emerging markets, and enhance their competitiveness.