Microcars Market

Microcars Market Growth Outlook (2023 to 2033)

Global demand for microcars is estimated to increase at a CAGR of 5.2% from 2023 to 2033. Currently, the global microcars market is valued at US$ 30 billion and is thus expected to reach a valuation of US$ 50 billion by the end of 2033.

There is a need to abandon the 'highway-centric' approach of urban development and prioritize the simplicity and convenience of local trips. The majority of car trips are short and only involve one person.

The bulk of the energy is squandered in supporting the vehicle's own weight. Oversized vehicles are the underlying cause of urban pollution, congestion, and waste of energy, public space, and materials.

As cities globally shift to a low-speed, high-density, low-impact model, a new kind of personal vehicle is needed to help people get around. One solution is to use microcars. The term 'microcar' refers to compact, lightweight cars with engines smaller than 700 cc. Microcars include cycle cars, quadricycles, and bubble cars. This is often a three- or four-wheeled vehicle that is available for both commercial and personal use.

Microcar is appropriate for urban and suburban environments since it needs less parking space, less upkeep, and is efficient for short trips. BMW Isetta, Fiat 500, Toyota iQ, Volkswagen Up, Smart Fortwo, and others are examples of microcars available on the market.

Growth in urbanization and the need for smart cities worldwide has significantly increased the use of passenger cars and light commercial vehicles, which is expected to support the global market growth over the forecast period. Numerous vehicle manufacturers are aggressively spending on R&D to create new autonomous and connected vehicles.

Several microcar makers see their vehicles providing an autonomous shuttle service in the near future. They are collaborating with businesses specializing in autonomous driving to develop this solution, which requires vehicles that are low-cost, energy-efficient, flexible, and prepared for use quickly.

Using autonomous technologies in this manner has the potential to alleviate nationwide concerns such as transit in crowded cities, a shortage of transportation options, and dwindling parking spots.

• Honda is creating the 'CiKoMa' to assist individuals in Japan in getting around in self-driving microcars. Honda sees Japan's elderly population, dropping birthrate, and the pandemic-like situations as reasons for the need for compact self-driving cars that people can hail and even rely on for basic transportation.

Report Attributes	Details
Market Size in 2023	US$ 30 Billion
Projected Market Value (2033)	US$ 50 Billion
Global Market Growth Rate (2023 to 2033)	5.2% CAGR
Asia Pacific Market Share (2022)	36%
Market Share of 4-wheel Microcars (2022)	76.2%
Key Companies Profiled	Ford Motor Company Mitsubishi Motors Corporation Nissan Motor Co., Ltd Honda Motor Co., Ltd Daimler AG General Motors Company Hyundai Motor Company Mahindra & Mahindra Ltd

Why are Microcars Growing in Popularity?

“Increase in Government Emission Control Norms”

Concerns about air pollution and climate change are pushing governments throughout the world to impose stricter rules on vehicle emissions. This encourages automakers to incorporate innovative components and technologies that reduce vehicle emissions.

Emerging economies such as India, China, Mexico, and Brazil are aiming to authorize emissions stages similar to Euro 6 in the coming years. The adoption of such measures is expected to enhance demand for microcars during the forecast period.

In the near future, governments of several countries are expected to check vehicle companies' compliance with carbon dioxide targets annually. In the event of non-compliance, vehicle companies may face consequences varying from sales restrictions and fines to public proclamations.

Microcars are smaller in size, use less fuel, and have a lower carbon impact than standard vehicles. This is expected to raise the sales of microcars over the projected period.

“Rising Popularity of Electric Microcars”

The rising popularity of electric microcars is expected to provide lucrative opportunities for market players in the years ahead. Given the increased interest in microcars, several automobile firms are expanding their product offerings to include ecologically friendly, energy-efficient, and cost-effective microcars. Furthermore, government agencies throughout the world are pushing the manufacturing of electric vehicles by offering attractive incentives and tax breaks.

Electric microcars consume no fuel and emit no pollution. Moreover, many countries are working on establishing city-wide charging networks to support the adoption of electric microcars.

• Endesa X and Cepsa formed an alliance in 2021 to build the most extensive ultrafast charging network in Portugal and Spain.

The global market is also benefitting from the dropping prices of the batteries used in electric microcars. Advances in the battery manufacturing industry and increased sales of electric cars have resulted in lower prices for electric car batteries, allowing electric microcar manufacturers to compete with gasoline microcar OEMs.

Advancements in battery production and chemistry, together with the boosting sales of electric vehicles, have resulted in battery producers pricing their goods competitively to increase sales. Moreover, since batteries are a crucial component of electric vehicles, lowering their prices lowers the overall cost of the vehicle, generating revenue.

What are the Primary Concerns of Companies Manufacturing Microcars?

“Concerns Regarding Safety, Regulations, and Vehicle Design”

Safety, regulations, and vehicle design are common issues with microcars. Since microcars share the road with normal cars, driver safety is a top priority. There are opportunities for development, whether it is a stronger vehicle frame and the addition of airbags to safeguard the driver from collisions or the construction of better suspension to keep the driver in control when driving over potholes.

More rules mandating safety measures will be required to help improve the development and sturdiness of microcars. Several of these microcars are legal motorized vehicles; however, they lack the standardization and restrictions that automobile makers must follow. Also, certain microcars do not need a driver's license.

Country-wise Insights

What Makes Japan and South Korea Lucrative Markets for Microcar Suppliers in Asia Pacific?

“Increasing Vehicle Manufacturing in These Countries”

Asia Pacific is spearheading the worldwide market for microcars. Asia Pacific accounted for 36% of the global market in 2022. This is due rising preference for affordable automobiles in the region.

Customers in Asia Pacific prefer small automobiles since they are less expensive to own and maintain. Moreover, the availability of auto finance at affordable rates and an increase in disposable income are the primary causes for the development of car penetration in emerging nations.

Japan and South Korea are major markets in the region due to a consistent increase in vehicle manufacturing in these countries. Furthermore, microcars are widely used for personal purposes in Japan and South Korea, which is increasing their demand.

How are the United Kingdom and Germany Driving the European Market?

“Growing Adoption of Electric Microcars in United Kingdom and Germany”

The United Kingdom and Germany are considerably contributing to the regional market due to the growing adoption of electric microcars. Congestion in urban areas is driving customers in these countries to choose micro electric vehicles, which are small and easy to park.

The expanding trend of micro-mobility and the increasing releases of innovative vehicles in the United Kingdom and Germany are also helping the regional market growth.

• For example, in April 2019, Siticars, a London-based EV start-up, released Me, a compact two-seater microcar for drivers residing in ultra-low emission zones. The Me, which is available in pick-up, box van, and passenger vehicle variants, has a top speed of 49.5mph and a range of 94 miles owing to its 10bhp 72V electric motor.

Why is the United States Expected to Be One of the Leading Markets?

“Escalating Demand for Electric Microcars”

North America is experiencing considerable growth in the worldwide market. Strong government efforts to push the adoption of microcars and the incorporation of advanced technologies, such as advanced driving assist systems (ADAS), are projected to boost regional market growth. The United States is a significant market for microcars in the region due to escalating demand for electric microcars.

Category-wise Insights

Why is Demand for 4-wheel Microcars Booming?

“Higher Fuel Efficiency Offered by 4-wheel Microcars”

4-wheel microcars held 76.2% of the global market in 2022. 4-wheel microcars are more fuel efficient than 3-wheel microcars and are favored by most customers. The 4-wheel microcar can keep its balance even on rough terrain and during sharp turns. It also offers an improved steering-handling experience.

Why are Electric Microcars Widely Preferred Over Petrol/Diesel-powered Microcars?

“Implementation of Strict Norms and Regulations Regarding Vehicle Emission”

The demand for electric microcars is growing significantly globally due to the implementation of strict vehicle emission norms and regulations. Hybrid microcars are also witnessing high demand due to their great fuel efficiency and longer driving range. While pure-battery-powered electric vehicles are projected to gain popularity in the long run, hybrid electric vehicles are expected to witness significant growth in the short term.

Consequently, manufacturers are developing hybrid microcars using an electric motor and a traditional combustion engine. Moreover, government subsidies and tax breaks for increasing electric vehicle production are also important factors in the expansion of the market for microcars, particularly electric microcars.

Competitive Landscape

Key players in the microcars market are fortifying their market positions through methods such as mergers and acquisitions, collaborations, and new developments. Moreover, to boost their market share, these players are using advanced artificial intelligence (AR) technologies, such as augmented reality (AR) and in-car virtual assistant systems. Furthermore, many start-ups active in the global market are focusing on producing innovative electric microcars.

• PMV electric, an Indian personal mobility electric vehicle start-up, debuted EaS-E, a smart microcar for everyday use, in November 2022. This microcar is offered in three models with ranges from 120 to 200 kilometers.
• ElectricBrands absorbed Artega in April 2022 to extend its product lines with the latter's signature micro electric cars. The company is expected to debut an electric two-seater KARO in the second half of 2023 as part of the acquisition. The car is only 1.50 meters wide and 2.48 meters long, has a range of 200 kilometers, and has a top speed of 90 kilometers per hour, making it suitable for urban mobility.
• Citroen announced in September 2021 that the Ami microcar would be marketed in the United Kingdom after over 12,000 British customers expressed interest in the vehicle. Ami is a more environmentally friendly, practical, and safe mode of transportation than bicycles, scooters, and mopeds.
• Triggo, a European engineering design business, unveiled its first electric urban mobility car in July 2021. The company's goal with the launch was to address the increasing demand for "future-oriented" mobility in major metropolitan European markets while relieving pressure on existing congested urban transportation. The micro-electric vehicle combines the safety and comfort of a car with the parking convenience and maneuverability of a scooter.

Key Segments of Microcars Industry Research

• By Wheel :

  • 4-wheel Microcars
  • 3-wheel Microcars

• By Drive Type :

  • All-wheel Drive (AWD)
  • 2-wheel Drive/1-wheel Drive

• By Fuel Type :

  • Electric
  • Petrol/Diesel
  • Hybrid

• By Application :

  • Commercial
  • Personal

• By Region :

  • North America
  • Latin America
  • Europe
  • Asia Pacific & China
  • Middle East & Africa