The global automobile market is expected to return to a growth path with high growth rates in the first quarter of 2025 due to the expansion of the Chinese domestic market, but concerns about downside risks are also rising due to the full-scale impact of the U.S. protectionist policies.

The Korea Automobile Research Institute recently looked into the global automobile market through KATECH Insight, the latest automobile market status and major issues in Industry Analysis Vol. 147.

As the global automobile market continues to grow and is expected to return to its past growth path, China and the United States in particular are leading the growth as major markets.

China's influence is so overwhelming that it is expected to account for 49% of the increase in global automobile sales in 2024 and 75% of the increase in the first quarter of 2025.

India is set to overtake Japan to become the world's third-largest automobile market in 2022.

With continued economic growth, automobile sales are also on the rise, which contrasts with the relative stagnation in ASEAN countries. Experts predict that India will benefit from reduced dependence on China and has high potential for long-term growth.

The Japanese automobile market, which had been sluggish in 2024, saw an increase in sales in the first quarter of 2025 despite the weak economic growth rate. This is analyzed to be mainly due to the resolution of production disruptions caused by quality certification fraud and supply chain issues.

The Korean market also sluggish along with Japan in 2024, but it is expected to stabilize with an increase in monthly sales in 2025. Major institutions interpret this as a result of the extension of the individual consumption tax cut and the policy to support replacement of old cars (March to June) stimulating consumption.

However, it is uncertain whether the growth trend will be maintained during the remaining period, as the Korea Automobile Research Institute predicted that sales will be good from January to April 2025 based on the 2024 quantitative model, but will be sluggish thereafter.

Toyota, Volkswagen, and Hyundai Motor Group have maintained solid positions, holding the top three positions for several years. On the other hand, Honda's sales ranking has been steadily declining, and Japanese companies in general are struggling in the Chinese market.

Chinese automakers have seen remarkable growth since COVID-19, with private companies maintaining relatively solid growth compared to state-owned enterprises. In particular, BYD is expected to enter the top 10 global auto sales in 2023, with sales increasing tenfold between 2019 and 2024.

The electric vehicle (BEV) and plug-in hybrid (PHEV) market is led by China, which accounts for more than half of the market share. In the hybrid vehicle (HEV) market, Japan, the US, and China are the top sales countries, but the market is highly dispersed, so the concentration is relatively low.

In the first quarter of 2025, PHEV market growth slowed as the BEV market growth recovered. In particular, Tesla Model Y and Model 3 are showing strength in China and the global market, but Tesla's overall sales are showing a decline compared to 2024, which is analyzed to be due to protectionist policies and changes in brand image.

There are growing concerns that the US protectionist policies and tariffs could act as downside risks to the global automobile market. GlobalData forecasts the automobile market growth rate to be 3.0% in 2025, and this could be revised downward if the US tariff policy continues.

The electric vehicle (BEV) market recovered growth in the first quarter of 2025, but the International Energy Agency (IEA) expects annual growth to remain modest at around 14%.

As Tesla's sales decline, some are speculating that the 'anti-Trump/Musk movement' may have had an impact.

Although the production of the older model has been discontinued with the launch of the new Model Y, sales declines are still confirmed in major European countries, and there are also concerns that production delays and the impact of protectionist policies may be impacted.

The global automobile market is expected to continue its recovery led by China and India, with U.S. protectionist policies and changes in the eco-friendly car market expected to be key variables.