Electrification and the rise of new manufacturing hubs will be central to global automotive industry growth as the overall sector evolves, according to a Frost & Sullivan update.
Their latest analysis shows that growth opportunities will come from greater collaboration between automakers, technology firms, and suppliers. This in turn will help drive advancements in autonomous driving, connectivity, and electrification, and are described as key factors shaping the market.
“The entry of Chinese OEMs into established markets such as North America and Europe is expected to intensify competition, compelling legacy automakers to accelerate innovation, reduce costs, and enhance adaptability,” the firm said in its update.
Frost & Sullivan also noted that the Russo-Ukrainian war has reshaped the European automotive landscape. The result is supply chain disruptions, increased production costs, and increased Chinese electric vehicle imports into Russia. However, Chinese OEMs are expected to face greater challenges in maintaining profitability in Western markets.
Still, China’s dominance in EV production and battery technology is expected to continue over the next five to seven years. This would be due to the country’s ability to maintain control over critical raw materials and advanced battery manufacturing.
The analysis firm’s Growth Expert, Joe Praveen, also highlighted the increased focus on solid-state batteries and efficiency improvements that will be important in reducing costs, boosting energy density, and expanding global production capacity.
“In parallel, additive manufacturing (3D printing) will become an essential tool for automakers by 2030, enabling faster product development, mass customization, and low-volume production,” said Joe Praveen, Growth Expert at Frost & Sullivan, in a statement.
Beyond China, Frost & Sullivan notes that OEMs are diversifying production by establishing new manufacturing hubs as global supply chains evolve. They are seeing a push for regionalized production. Which is driven by “a need to mitigate geopolitical risks, reduce logistics costs, and comply with evolving trade regulations.”
