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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jun 17, 2024 - Higher US Light-Vehicle Sales
                                  • The US new light-vehicle seasonally adjusted annualized sales (SAAR) rose 2.4% in May 2024 year over year, totaling 15.9 million units, and up 0.8% from the previous month, according to NADA Market Beat. Categories performing well in May included more affordable small and mid-size vehicles crossover utility vehicles and sedans. Average incentive spending per unit increased to an estimated $2,640 in May, which was 48% higher year over year. New light-vehicle inventory declined 0.3% from the beginning of May to the end of the month. Sales volumes are expected to increase in 2024, with projected light vehicle sales of 15.9 million units.
                                  • 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.
                                  • The US government recently announced that it would be raising import tariffs on Chinese battery electronic vehicles (BEVs), semiconductors, solar cells, and other sensitive sectors to help protect domestic manufacturing from unfair competition, according to Just Auto. US President Joe Biden announced that the US would increase import duties on Chinese-made BEVs from 25% to 100%, citing unfair trade practices by China. Currently, the Chinese-manufactured BEVs account for a small percentage of US sales. However, the US has invested billions in electric vehicles and battery manufacturing facilities, creating a foundation for a future growth market for US manufacturers. The US is China’s largest trading partner, and some are concerned the tariffs could create a trade rift between the countries.
                                  • Tesla is laying off more than 10% of its global workforce, approximately 14,000 employees, as it faces a weaker market for electric vehicles, according to the Wall Street Journal. In an email to employees, Tesla CEO Elon Musk noted that the job cuts were needed to reduce costs and increase productivity. Tesla reported its Q1 2024 sales declined 8.5% from a year ago, with 387,000 deliveries globally. While Tesla remains the world’s largest EV seller, the WSJ piece noted that Tesla has shown signs of stress as the overall EV market has slowed while also facing fierce competition from other automakers, including China’s BYD. BYD surpassed Tesla as the largest global EV seller in Q4 2023, but Tesla has since reclaimed the title. Motor Intelligence reported that US hybrid sales increased 43% in Q1 2024 while EV sales were only up 2.7%. Tesla accounts for about half of the US electric market.
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