New analysis from Frost & Sullivan, Strategic Overview of the North American Microelectric Vehicles Market, forecasts a compound annual growth rate (CAGR) of 39.30 percent between 2010 and 2017.
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By 2013, the total count of microelectric vehicles in North America is likely to increase to 150 types, with the introduction of 34 new base models. The microelectric vehicles market has gained momentum with five out of ten global vehicle manufacturers expected to enter the market as major stakeholders.
Medium-speed vehicles (MSVs) and city electric vehicles (CEVs) are expected to experience tremendous advancement, boosted by infrastructure development, primarily through sales to private consumers.
Consumer preference for features, such as eco-friendliness and reduced vehicle ownership costs, has driven the demand for small urban vehicles powered by alternate fuels. Changing mobility trends dictated by consumers, who are battling increasing fuel prices, are encouraging vehicle manufacturers to launch larger numbers of microelectric vehicles in the North American market. At the same time, their efforts are boosted by many government subsidies and exemptions, which is expected to increase revenue.
Tighter emission controls, heavy investment costs, range anxiety, rising vehicle costs from the addition of new components as per legislative norms, and the limited speed of vehicles in the low-speed vehicle (LSV) and MSV segments restrict the capacity of original equipment manufacturers (OEMs). Safety is another primary concern; however it can be addressed through the application of stricter levels of vehicle crash-worthiness. Strict federal laws impact the long-term sale and production of MSVs, an increasingly popular category.
"The rising popularity of MSVs is affected by strict federal laws, which hinder the long-term sale and production of these vehicles," said Frost & Sullivan Industry Analyst Vishwas Shankar. "Currently, low-speed vehicles (LSVs), MSVs and A-segment vehicles are tackling this challenge by incorporating conventional engine variants with carbon dioxide emissions, thereby qualifying them for regional grants and benefits, including access to high occupancy vehicle lanes and parking charge exemptions."
This development has enabled the entire automotive industry to evolve into an era of microelectric vehicles, which also address parking space availability issues in crowded city centers. New age business models targeted at fleets could also help overcome challenges faced by the increasing sales of microelectric vehicles. Tax breaks will drive consumer sales, as tax credits will reduce vehicle prices by half, on certain low-priced models.
In North America, the focus on alternate fuel driven vehicles, the increasing cost of vehicle ownership and the presence of neighborhood electric vehicles (NEVs) is expected to propel microelectric vehicle sales several fold. Although MSVs are expected to outshine LSVs, the A-segment vehicles are expected to grow faster than LSVs or MSVs, due to their speed and power.
MSVs and A-segment vehicles have clear growth strategies to commercialize electric vehicles and thereby reduce their carbon footprint. The CEV is forecast to be the most popular class, as it meets the needs of a larger consumer group and features lower upfront costs and comparable operating costs.
Strategic Overview of the North American Microelectric Vehicles Market is part of the Automotive & Transportation Growth Partnership Services program, which also includes research in the following markets: Strategic Analysis of the European Microcars Market, Sustainable and Innovative Personal Transport Solutions – Strategic Analysis of Carsharing Market in Europe, Strategic Analysis of Passenger Vehicle Market in Malaysia, Russian and CEE Automotive Industry Outlook, Strategic Analysis of Passenger Vehicle Market in Thailand, Strategic Analysis of Passenger Vehicle Market in Indonesia, and Strategic Analysis of Passenger Vehicles Market in Vietnam. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.