HS Code:
The category of vehicles with an unladen weight not exceeding 2,000 kg (often classified under HS Code 8703 for motor cars and other motor vehicles principally designed for the transport of persons) includes a wide range of passenger vehicles such as sedans, hatchbacks, and small SUVs. This category is crucial in global trade due to its high demand in both developed and emerging markets for personal and commercial use. These vehicles are typically subject to varying tariffs and regulations based on environmental standards, safety requirements, and regional trade agreements.
Total Trade Volume
USD 250 billion
Data from 2022
Source
United Nations Comtrade Database
USD 50 billion
20% of total trade of total trade
Increasing
USD 40 billion
16% of total trade of total trade
Stable
USD 30 billion
12% of total trade of total trade
Increasing
USD 20 billion
8% of total trade of total trade
Increasing
USD 15 billion
6% of total trade of total trade
Stable
Average Rate
8.5% ad valorem
Highest Rate
25% (imposed by certain developing countries to protect local industries)
Lowest Rate
0% (under free trade agreements like EU-Japan EPA or USMCA)
Shift towards electric and hybrid vehicles
Increasing demand for eco-friendly models within this weight category, driven by government incentives and stricter emission regulations
2021-2023
Rising production in emerging markets
Countries like India and Mexico are becoming significant exporters due to lower production costs and favorable trade agreements
2020-2022
Supply chain disruptions
Semiconductor shortages and logistical challenges have slowed production and export volumes temporarily
2021-2022
The European Union has introduced new CO2 emission targets for vehicles under 2,000 kg, pushing manufacturers to accelerate the production of electric vehicles.
January 2023
Likely to increase the cost of non-compliant vehicles and boost trade in electric models within this category.
Under the United States-Mexico-Canada Agreement, tariff-free trade for vehicles meeting regional content requirements has been reinforced, benefiting exporters in the region.
July 2022
Strengthens trade flows between the US, Canada, and Mexico, especially for light vehicles.
Japan has increased subsidies for hydrogen-powered vehicles in this weight category as part of its carbon neutrality goals.
March 2023
Expected to diversify the export portfolio of Japanese manufacturers and influence global demand for alternative fuel vehicles.