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 252 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 1,200 workers and generates about $1.2 billion annually.
- The automobile manufacturing industry consists of about 252 establishments that employ about 295,600 workers and generate about $296 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 subsidiary of Netherlands-based Stellantis.
Industry Forecast
Automobile Manufacturers Industry Growth
Recent Developments
Sep 24, 2024 - Auto Sales, Shipments Down
- Sales of new autos declined 10.2% in June 2024 compared to a year ago and were down 10.2% from the previous month, according to the Census Bureau. Automobile shipments declined 6.3% in June 2024 compared to a year ago and were down 7.5% from the previous month. Automobile inventories were 2.7% lower in June 2024 year over year and were 1.4% higher than the previous month. Quarterly sales for motor vehicles and parts companies decreased in Q1 2024, down 1.5% from Q1 2023 and down 2.7% from the previous quarter. Consumer spending, a leading indicator for the industry, increased 2.6% in June 2024 compared to a year ago and was up 0.2% from the previous month, according to the Bureau of Economic Analysis.
- US new light-vehicle seasonally adjusted annualized sales (SAAR) declined 1.1% in August 2024 year over year, totaling 15.1 million units, according to NADA Market Beat. Categories performing well in August included more affordable small car and crossover utility vehicle segments. Average incentive spending per unit increased to an estimated $3,035 in August, which was 59.5% higher year over year. New light-vehicle inventory has climbed throughout 2024. While sales volumes are expected to decrease in September 2024, a recent interest rate cut and potential subsequent cuts are expected to boost both new and used vehicle sales moving forward.
- The CDK Global software cyberattack that lasted about three weeks this summer is expected to cost car dealers more than $1 billion, according to a study cited in the Detroit Free Press. The incident shut down systems at about half of the nation’s car dealerships, forcing slowdowns in sales as many dealers had to move to pen-and-paper to complete deals. The estimate from Anderson Economic Group was revised upward to reflect the total direct losses from the estimated 56,200 new car sales that were lost during the period. The estimate accounts for lost earnings in the parts and service department, higher staffing and IT service expenses, and additional floor plan interest charges on inventory not sold, according to the report. Not included in the estimate are any damages to customers, reputational damages suffered by dealers, litigation costs, and other related damages.
- Several recent studies show that many US consumers are still reluctant to purchase an EV vehicle. A KPMG study reported by Reuters showed only one-fifth of consumers would buy an electric vehicle over a gas-powered or hybrid car, with 60% of buyers wanting EV charging times to be 20 minutes or less. A new AAA study showed that only 18% of US adults said they would be very likely or likely to buy a new or used EV, down from 23% in 2023, citing cost, range anxiety, and concerns about charging options. People were more willing to try a hybrid vehicle, with 31% saying they’d be very likely or likely to buy one, in the AAA study.
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