Automobile Manufacturers

Industry Profile Report

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

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                                  Coronavirus Update

                                  Apr 29, 2022 - EV Sales Soar
                                  • Sales of electric vehicles (EVs) soared during the first quarter, mostly due to the debut of new nameplates. Meanwhile, the overall industry reported a 15.3% drop in new vehicle sales, to 2,516,236 units, according to figures from the Autodata Corp. EV makers Tesla and Polestar reported sharp rises in first-quarter sales in the US, compared with the same period a year ago. The only brands to post sales gains were all-electric. EVs sales were a bright spot for mainstream automakers who otherwise struggled. Ford Motor, which in March 2022 announced it will separate operations for EVs and gas-engine vehicles, reported a record 37.9% jump in EV sales in the first quarter compared to the same period last year.
                                  • Mercedes-Benz in April 2022 said it expects strong demand for high-end cars to allow it to offset rising raw material and transport costs with higher prices, Reuters reports. Strong demand amid short supply – due to the semiconductor chip shortage – is supporting its pricing strategy, the German automaker said. If it weren’t for the chip shortage, the company said it would have been able to sell more vehicles in the first quarter without lowering prices.
                                  • Major automakers halted exports of their vehicles produced in Russia shortly after Russian forces invaded Ukraine in late February 2022. The US, EU, and other countries have placed sanctions and bans on exports from Russia. Ford suspended its joint venture in Russia. Sanctions on palladium produced in Russia have driven prices up from $1.900 per ounce to $3,440. Palladium is used to make exhaust catalysts that reduce vehicle emissions. The cost of exhaust catalysts is likely to increase as supplies tighten.
                                  • Vehicle prices may never return to prep-pandemic levels, according to AutoNation CEO Michael Manley. “The manufacturers and dealers have all learned through this pandemic that overproducing is not a smart thing to do. And that you really need to produce to the level of demand. Discounts in pricing is something that is not going to come back into the marketplace,” Manley said. “What the pandemic actually did was press a reset button on the balance of inventory,” he added said. “You’ll see some mitigation in terms of margin on new cars, but I really believe that lesson is now embedded, and they will not return, in my view, back to the 2018, 2017 margins.”
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