Automobile Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 230 auto manufacturers in the US sell vehicles to new automobile dealers, corporations, rental car firms, utility companies, and government agencies, and make vehicles available directly to consumers through subscription services. They also sell original equipment replacement parts to dealers, fleet managers, parts wholesalers, and repair and maintenance companies.

Dependence on Economic Conditions

The automobile industry is highly cyclical: an economic boom is generally accompanied by high sales in the automobile industry, while sales usually suffer during economic downturns.

Competition from Used Vehicles

Used vehicles are a direct substitute for the new vehicles offered by automobile manufacturers.

Industry size & Structure

The average auto manufacturer employs about 900 workers and generates about $1.3 billion annually.

    • The automobile manufacturing industry consists of about 230 establishments that employ about 182,700 workers and generate about $254 billion annually.
    • The industry is highly concentrated; the top eight companies account for over 90% of industry revenue.
    • Large US-based companies include General Motors, Ford, and Tesla. Chrysler is headquartered in the US, but is a fully-owned subsidiary of Netherlands-based Fiat Chrysler Automobiles.
                                  Industry Forecast
                                  Automobile Manufacturers Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Dec 5, 2022 - Slow Progress on Self-Driving Cars
                                  • Automakers are retrenching on their autonomous-vehicle efforts amid pressure to curb expenses during an economic slowdown, The Wall Street Journal reported in November. Ford Motor and Volkswagen AG are among those pulling back on their investments in the technology. In late October, the two companies shutdown their joint investment in driverless-car startup Argos, with both partners saying they’d redeploy resources to technology more likely to be viable in the nearer future, such as advanced driving assistance systems (ADAS) that keep a human in the driver’s seat. Investors are becoming increasingly impatient with the slow progress toward fully autonomous vehicles. “It’s become very clear that profitable, fully autonomous vehicles at scale are still a long way off,” Ford’s CFO John Lawler told WSJ. Meanwhile, General Motors says it remains committed and optimistic regarding Cruise, its autonomous-vehicle startup, acquired in 2016.
                                  • Electric vehicles are expected to make up about 30% of new car sales in the United States by 2030, with EVs making up nearly 10% of the of cars and light trucks expected on US roads in 2030, according to the 2022 Joint EV Trends and Outlook Forecast commissioned by the Automotive Aftermarket Suppliers Association (AASA) and the Auto Care Association. Notably, the forecast shows that the battery electric vehicles (BEVs) share of vehicles in operation is growing faster than expected and the purchase price of BEVs is expected to reach parity with vehicles powered by internal combustion engines (ICE) as soon as 2024. By 2030, as battery prices continue to drop, the total cost of ownership for BEVs is expected to be more consumer friendly relative to ICE vehicles.
                                  • The European Union (EU) in October 2022 approved a ban on the sale of new gasoline and diesel cars and vans by 2035, the AP reported. Under the agreement by EU lawmakers and member countries, carmakers will be required to reduce the emissions of new cars sold by 55% in 2030, compared to 2021, before reaching a 100% cut five years later. The ban is part of the EU’s effort to achieve its goal of reducing greenhouse gas emissions by 55% over this decade. In the US, California recently approved a similar ban on the sale of new gasoline-powered cars and trucks by 2035. The European Parliament and member states must formally approve the ban before it comes into force, according to the AP.
                                  • New car prices hit a record in August 2022 with the average transaction price (ATP) for a new vehicle climbing to $48,301, up 0.5% over July, according to data from Kelley Blue Book (KBB). That figure represents more than 80% of median income in 15 US states, reports YAA Car Search. August’s new car prices were 10.8% higher ($4,712) year-over-year from August of 2021. Moreover, the latest industry insights from KBB and TrueCar indicate that new car prices have yet to peak. The ATP paid for a new non-luxury vehicle in August was $44,559, while luxury buyers paid $65,935 on average. Demand for luxury vehicles remains strong, although KBB points out that luxury prices in August were averaging closer to MSRP than they had in previous months.
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