automotive industry

Automotive in 2022: back to near-normal

As part of our industry outlook for 2022, EIU has taken a look at the growth prospects, top risks and key trends facing the automotive sector next year. At a global level, EIU expects new vehicle sales will rise by 7.5% in 2022, taking them back past 2019 levels. Global sales of new electric vehicles (EVs) will continue to soar, rising by 51%, though still struggling to meet demand amid continuing supply-chain disruptions.

The automotive sector has seen a strong recovery in demand, particularly for electric vehicles. But frustratingly, many companies are struggling to meet that demand because of supply-chain blockages for inputs from semiconductors to magnesium. This will make it harder for them to invest in the new vehicle models needed to meet emissions targets.

Arushi Kotecha, automotive analyst at EIU

Key things to watch for in 2022:

  • Foreign carmakers will look to increase their stake in car production joint ventures (JVs) in China, as the country will remove ownership caps from January 2022. On the other hand, we expect mergers and acquisitions among Chinese new energy vehicle (NEV) companies, in line with the government’s plan to consolidate the market to achieve synergies. 
  • More electronics and technology companies will foray into the e-mobility business. Foxconn (Taiwan) could emerge as a major solutions provider through its software and hardware open platform for Electric vehicles, MIH, and a contract manufacturer for EV companies.  
  • Fleet electrification will play a key role in the shift towards sustainable transportation. In 2022 we expect more car rental companies to collaborate with EV manufacturers to electrify their fleets. 
  • Self-driving cars will edge forward. Honda (Japan), BMW and Mercedes (Germany) will be among those testing level-3 autonomous vehicles (at level 3, the car is responsible for avoiding obstacles) in 2022.
  • Fuel-cell EVs (FCEVs) go off-road. Hyundai (South Korea) wants to apply hydrogen fuel-cell technology to all its commercial vehicles by 2028. In 2022 it will start testing the Grenadier FCEV off-roader, the fruit of its partnership with INEOS, a hydrogen-fuel supplier.

For more insights into how the automotive sector will fare next year, download our “Automotive in 2022” report.