Microcar Market: Current Analysis and Forecast (2023-2030)

Microcars refers to smaller alternatives to regular sized cars. These vehicles have less than 3 m of length and smaller engine displacemnets especially lesser than 700 cc. Microcars offer higher manuervorability as compared to larger cars with easy handling in heavy traffic conditions. Smaller size of these vehicles also provide reduced cost of operation as well as ownership due which a large number of consumers have started opting for the microcars in different countries.

The Microcar Market is expected to grow at a steady CAGR of around 11.02% owing to the growing focus on the higher fuel economy of smaller cars, keeping operational costs in check. Furthermore, growing consumer interest in vehicle customization, especially in emerging markets, has boosted the demand for unique grille designs. Aesthetic appeal, personal style, and the desire to stand out are key motivators for consumers. Additionally, parking space availability has also become scarce in most of the urban places across the world, which has forced consumers to opt for smaller alternatives to large cars.

In line with this, many automotive manufacturers have announced their plans to launch new microcars under sub-3-meter lengths apt for maneuvering in heavy traffic congestions. For instance, in 2022, Renault announced the launch of its new electric quadricycle Mobilize Duo. The model is an update to the Renault Twizy.

Additionally, various government policies have also promoted the adoption of microcars as they are more sustainable mode of transportation.

Based on the propulsion, the market is segmented into internal combustion-based and electric. Of these, internal combustion engines have held a sizeable market share across the globe. The ease of refueling, as well as the lower cost of conventional engines compared to electric powertrains, has assisted the segment in holding a sizeable market share. However, with the declining cost of the lithium-ion batteries and achieving the economies of scale in the electric powertrain many of the new microcar models devising electric powertrain have embarked into the microcar market. This is one of the major shifts that would steer the electric powertrain-based microcar's market growth and help the segment hold a dominant market share in the forecast years, i.e., 2023-2030. The adoption of Microcar through non-store-based distribution channels, particularly e-commerce platforms and online retailers, has also been on the upswing. Online sales of Microcar have gained significant traction due to their convenience and accessibility. Consumers can explore a broad selection of Microcar brands, place orders, and have the products delivered to their doorsteps. This convenience, coupled with the increasing popularity of online shopping, has made it easier for consumers to access Microcar, especially for those who prefer the convenience of shopping from home. Furthermore, online retailers often provide product information and reviews, enabling consumers to make well-informed choices, contributing to the growth of Microcar adoption through non-store-based channels.

The Global Microcar market is segmented by four-wheeled and two and three wheeled vehicles in terms of drive type. Considering the ease of maneuverability and higher control on road the consumers are majorly preferring four-wheeled vehicles. These vehicles not only offer better stability on the road as many of the countries as the US, Canada, Germany, etc., consider three-wheeled vehicles under two-wheeler category tagging them unstable for road operations. Additionally, quadricycles are banned in some of the major countries as the US due to considering them unstable for commuting. Additionally, people are conditioned to buy four-wheeled vehicles over three or two wheeled vehicles due to their appearance of cars that has proven to be conducive for the demand growth of respective segment. Four-Wheeled microcars have held major market share across the globe and is anticipated to further increase their market share in the forecasted years. Some of the factors that have attributed to the growth of the segment is higher inclination of the customers towards opting for four wheelers due to their higher stability, greater load carrying capacity, better ground clearance, their appearance as a car, better passenger carrying space, etc. Additionally, microcars are seen as a smaller alternative to the larger SUVs, Sedans and Hatchbacks due to which the customer are more inclined towards opting for similar four-wheeled alternatives in smaller size for easier handling and moving through heavy traffic situations. Apart from the above-mentioned factors higher number of options available for the four-wheeled vehicles is also a prominent factor that has been central to improve the demand for the category.

Based on End-Users the global microcar market is segmented into commercial and passenger microcars. Of these passenger car segment has grabbed a sizeable market share in the microcar segment due to higher demand for microcars for personal commute application. Additionally, the range anxiety has something that had limited the application of microcars in the commercial category restricting its market growth. However, with the growing availability of microcars with improved range and focus towards electric charging infrastructure the commercial microcar segment has been witnessing a fast growth which is anticipated to be continued in the forecasted years contributing to the comprehensive market growth of microcars. Commercial segment has witnessed the fasted growth of the two segments in the microcar market. Some of the factors that have attributed to the growth were reduced range anxiety among the buyers due to increased battery capacity in the microcars as well as systematic establishment of charging infrastructure in line with the various government policies. These were some of the paramount factors that reduced some of the primitive challenges associated with the adoption of microcars for commercial applications. Additionally, microcars being smaller in size and having lucrative low cost of operation and ownership attracted a large set of consumers looking forward to reduce their fleet operation cost targeting for short-distance ferrying.

For a better understanding of the market adoption of microcar, the market is analyzed based on its worldwide presence in countries such as North America (The U.S., Canada, and the Rest of North America), Europe (Germany, The U.K., France, Italy, Rest of Europe), Asia-Pacific (China, Japan, India, Rest of Asia-Pacific), Rest of World. Asia Pacific is emerging as one of the fastest-growing markets for automotive and automotive-related products. The APAC region has witnessed remarkable economic growth over the years, leading to a surge in disposable income and an expanding middle class. As a result, there is a growing demand for automobiles. Furthermore, APAC is also home to several manufacturing giants, such as Japan, China, South Korea, and India. These countries have established themselves as leading producers of automobiles, both for domestic consumption and international exports. Moreover, urbanization is happening at an unprecedented pace in the APAC region, especially in countries like China and India. As more people migrate to cities, there is an increased need for personal transportation. This urban lifestyle shift plays a significant role in driving the demand for microcars as there is unprecedented growth in city traffic, thereby boosting the microcar market. In addition to this, microcars no longer serve just functional purposes but have evolved into a prominent area of vehicle aesthetics. In the APAC region, where consumers hold high regard for vehicle appearance, the demand for visually appealing and unique grilles has soared.

Some of the major players operating in the market include: Group PSA, Smart (Mercedes Benz), Toyota Motor Company, Honda Motor Company, General Motors, PMV Electric, LIGER Group, Geely, Micro Mobility Systems (Microlino), Group Renault S.A., Nissan Motors Co. Ltd. Etc.