The rise in penetration of the all-wheel-drive (AWD) and 4-wheel drive (4WD) vehicles and government rules to support driving utility vehicles such as UTVs on-road drive the growth of the global utility vehicle market to reach $51.69 billion by 2030.
According to the report published by Allied Market Research, titled, Utility Vehicle Market (UV) by vehicle type, application and propulsion: Global Opportunity Analysis and Industry Forecast, 2021–2030, states the global UV was estimated at $ 25.73 billion in 2020 will grow at a CAGR of 9.4% till 2030.
Despite critical drivers for the growth of the UV market, there are some impediments as well. For example, the report said that the high maintenance cost of UVs and decrease in production and automotive sales hinder the market growth. On the contrary, developing electric-powered UVs and expanding dealer networks for effective product reach is expected to open new vistas for the market players in the coming years.
The major market players in this segment include BRP, Deere, CFMOTO, Kawasaki Heavy Industries, Honda Motor, Mahindra & Mahindra, Kubota, Textron, Polaris and Yamaha Motor.
The COVID-19 pandemic has impacted the demand for UVs due to commuting restrictions and UV manufacturers' weak financial performance in 2020. Furthermore, the pandemic affected the overall economy, and market players have been formulating strategic cost-saving plans.
Allied Market Research said the pandemic resulted in supply chain disruption, changes in regulatory & policies, and issues pertaining to working capital management. Moreover, most manufacturing facilities of UVs were closed due to a lack of workers, commute restrictions, and a short supply of raw materials.
IC engine powered UVs dominate the market
According to Allied Market Research, the IC engine-powered segment held the largest share in 2020, accounting for more than three-fifths of the global UV market, owing to the availability of fleet worldwide and its cost-effective solutions. However, the electric-powered segment is expected to witness the highest CAGR of 10.8% during the forecast period due to the rise in penetration of EVs and the growing trend of usage of green mobility solutions.
In terms of vehicle type, the utility terrain vehicle segment will showcase the highest CAGR of 10.4% from 2021 to 2030, driven by rising leisure activities and a wide range of applications in agricultural and industrial activities. However, the SUV segment held the largest share in 2020, contributing to more than one-third of the global UV market, due to the rise in the need to utilise all types of terrains and the practical operational ability.
The research agency said the market across Asia-Pacific held the largest share in 2020, accounting for nearly two-fifths of the industry. Moreover, the region is projected to demonstrate the highest CAGR of 10.6% during the forecast period due to increased adoption of UVs and off-road vehicle activities. On the other hand, the global UV market across North America is expected to register a CAGR of 9.6% from 2021 to 2030, the research firm said.
Courtesy: Allied Market Research. NB: Photo is representational; courtesy: Mahindra.