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

                                  Mar 13, 2023 - Sales Climb for Stick Shifts
                                  • Sales of stick shifts are on the rise in 2023, accounting for 1.7% of new car sales compared to 1.2% in 2022 and 0.9% in 2021, according to data from JD Power in the Wall Street Journal. Car manufacturers are adding more models with stick shifts to their lineups to accommodate growing demand. Mini is adding four new manual models in March 2023. Acura added a manual option back to the Integra in 2022 after discontinuing stick shifts in its lineup in 2015. Of the five versions of the MX-5 Miata by Mazda Motor Corp., three are manual transmissions. The appeal for many younger drivers is that driving a clutch is more fun and runs counter to an increasingly automated world. Younger consumers accounted for more than half who bought manual Integras (between 18 and 46 years old) and a quarter of those who bought manual Miatas (between 18 and 35 years old).
                                  • US manufacturing activity contracted in February 2023, falling below the baseline for growth for the fourth consecutive month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 47.7 in February, a slight change from the 47.4 recorded in January. A reading above 50% indicates manufacturing expansion. In February, the ISM’s Purchasing Managers Index (PMI) fell to 47.4%, down from 48.4% in January. February’s New Orders Index remained in the contraction zone at 47%. The February Production Index decreased slightly to 47.3%. Of the manufacturing industries tracked by the ISM, four reported growth in February: Apparel, Leather & Allied Products; Transportation Equipment; Petroleum & Coal Products; and Electrical Equipment, Appliances & Components. Fourteen sectors reported contraction, including Computer & Electronic Products, Fabricated Metal Products, Nonmetallic Mineral Products, Plastics & Rubber Products, Primary Metals, Textile Mills, and Wood Products.
                                  • Hyundai and Kia have offered free theft deterrent software for more than eight million vehicles to better protect owners from car thefts inspired by a social media challenge that went viral on TikTok, according to an announcement from the National Highway Safety Administration (NHTSA). The “Kia Challenge” spread nationwide and resulted in at least 14 reported crashes and eight fatalities, per NHTSA. The software will be free for owners of Hyundai and Kia vehicles without an immobilizer. The software upgrades the theft alarm software logic to lengthen the sound of the alarm from 30 seconds to one minute and requires the key to be in the ignition to turn the car on. Kia and Hyundai will roll out the updates in a phased approach. Hyundai will provide its customers with a window sticker alerting potential thieves to the upgraded anti-theft protection. Both companies have been working with law enforcement agencies to offer more than 26,000 steering wheel locks to affected car owners.
                                  • New car prices were down slightly from December 2022 but up nearly 6% in January 2023 from a year ago, with the average transaction price (ATP) reaching $49,388, according to data from Kelley Blue Book (KBB). Luxury sales have been robust, and the luxury vehicle share hit a record 19.6% of total sales in January. A luxury car's average transaction price (ATP) was $65,953 in January, down slightly from December. Buyers have been paying above the average manufacturer's suggested retail price (MSRP) for more than a year, as low inventory factored into costs. According to Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive, "The transaction data from January indicates that overall prices are no longer increasing like they were a year ago. Both luxury and non-luxury prices were down month over month, but the mix of luxury vehicle sales last month – at a record high near 20% – helped keep the overall average price elevated."
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