Passenger Car Segment of the Global Ethanol-Based Vehicle Market to Record Robust Growth Until 2020, Says Technavio
According to the latest market research report by Technavio, the ethanol-based
vehicle market is likely to produce over 7 million units
by 2020.
In this report, Technavio
covers the present scenario and growth prospects of the global
ethanol-based vehicle market for 2016-2020. The report segments
the market by passenger cars and commercial vehicles. The passenger car
segment includes, compact, subcompact, midsize, full size, and SUVs that
weigh less than 8,500 lbs, while the commercial vehicle segment
includes, pickup trucks, small passenger vans, and vans that include
both passenger and cargo vans that weigh up to 10,000 lbs.
“In 2015, the ethanol-based vehicle market for passenger cars stood at
3.72 million units and by 2020, the market is slated to achieve over
5.21 million units growing at a CAGR of close to 7%. This segment may
register a healthier growth rate compared to commercial vehicles, with
the launch of new vehicles anticipated during the forecast period.
Factors that majorly drive the sales of passenger flexible fuel vehicles
(FFVs) include, higher product availability and better awareness in
response to emission norms,” said Siddharth Jaiswal, one of Technavio’s
lead industry analysts for automotive
research.
Global ethanol-based vehicle market by geography 2015 (% share)
|
Americas – 91%
|
|
EMEA – 6%
|
|
APAC – 4%
|
Source: Technavio research
Americas: largest market for ethanol-based vehicles
Brazil and the US are the largest producers and consumers of automotive
ethanol. These nations will continue to lead the market for
ethanol-based vehicles over the forecast period. The US Energy
Independence and Security Act of 2007 considers ethanol to be an
accurate solution to cut gasoline consumption and a means to reduce
dependence on petrol imports. US vehicles have been using E10 for more
than two decades and E85 flexi-fuel for vehicles powered by a lesser
blend of ethanol. The Canadian Ministry of the Environment and Climate
Change mandates 5% ethanol content in gasoline, which is also a major
revenue booster for this market.
Brazil has the oldest national program for promoting the use of ethanol
in vehicles. The program dates back over 40 years. It was designed to
promote the use of ethanol-based vehicles and mandates the use of
ethanol in automotive fuels. However, ethanol content was reduced to
18%-20% since 2012 from 25% earlier. The mix was expanded to 25% in 2013
and was further raised to a maximum of 27.5% in 2015.
EMEA: second largest market for ethanol-based vehicles
The European transportation sector makes for the second largest
contribution to Europe’s greenhouse gas emissions. To overcome this
problem, Europe has placed stringent emission norms to curb greenhouse
gas emissions. This places EMEA at a double-digit growth rate during the
forecast period. Further, Europe is also likely to take corrective
measures to meet COP21 ambitions, which hinge on alternative fuel-based
vehicles.
Currently, Sweden accounts for the majority share of FFVs in Europe. It
accounts for over 70% of Europe’s total FFVs and has the largest number
of flex-fuel refilling stations in Europe. The country’s prominence in
the FFV market stems from its National Climate in Global Cooperation
Bill and the vow to free Sweden from fossil fuels by 2020.
Ethanol-based vehicle market in APAC
The ethanol-based vehicle market in APAC is predicted to reach a CAGR of
over 12% until the next four years. In 2016, the Chinese government is
likely to enforce the ethanol blend of 5% as an expansion in the use of
ethanol for automotive use to address problems in cash flows faced by
sugar mills in India. This move is expected to provide additional cash
inflows to sugar industry of India, while boosting the market for
ethanol for fuel in the region. Such a move can lead to an increase in
the promotion and production of ethanol in the region.
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About Technavio
Technavio
is a leading global technology research and advisory company. The
company develops over 2000 pieces of research every year, covering more
than 500 technologies across 80 countries. Technavio has about 300
analysts globally who specialize in customized consulting and business
research assignments across the latest leading edge technologies.
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techniques to ascertain the size and vendor landscape in a range of
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and top-down approaches, besides using in-house market modeling tools
and proprietary databases. They corroborate this data with the data
obtained from various market participants and stakeholders across the
value chain, including vendors, service providers, distributors,
re-sellers, and end-users.
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