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 242 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 1,000 workers and generates about $1.2 billion annually.

    • The automobile manufacturing industry consists of about 242 establishments that employ about 194,000 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

                                  Mar 14, 2024 - Producer Prices, Wages Increase
                                  • According to data from the Bureau of Labor Statistics, producer prices for automobile, light truck, and utility vehicle manufacturing peaked in Q4 2023 after being relatively unchanged for much of 2023. Producer prices have increased in recent years, up 9% from December 2019 to December 2023. Employment rates in the motor vehicle manufacturing industry were mostly unchanged in December 2023 compared to a year ago, but have gone up by 26.1% since 2019. Wages for the motor vehicle industry have increased significantly, with a rise of 17.5% from December 2022 to December 2023 and 23.5% since 2019, per the BLS.
                                  • According to NADA Market Beat, new light-vehicle sales exceeded expectations in February 2024, totaling 15.8 million units, up over 6% from the previous year and 6% from the last month. The average transaction price in February was $44,045, which was $1,919 lower year over year, according to JD Power. Growth in unit sales was spurred by a higher number of vehicles on dealer lots and higher OEM incentives. Average incentive spending per unit increased to $2,565 in February, which was 75.3% higher year over year and the highest level since May 2021. Driving up incentive spending is additional OEM incentives for leasing; leasing is expected to account for 23.2% of retail sales. Crossover vehicles accounted for nearly half of all new cars sold in February, followed by pick up (16.2%), SUV (9.8%) midsized car (7.4%), small car (7.4%), luxury car (4.6%), and van (4.5%).
                                  • Hybrid market share is expected to grow in 2024 as consumers continue to see hybrids as a comfortable choice in a transition away from internal combustion engine (ICE) vehicles, according to an analysis by Edmunds in its “2024 Predictions” report in Repairer Driven News. The hybrid market share reached nearly 10% in November 2023, an increase of 99% year-over-year compared to the previous year’s 4.9% share. Hybrid vehicles are outpacing EV demand, as EV market share grew by 25% during the same period. According to Ivan Drury, director of insights at Edmunds, “Sales are taking off for the humble hybrid. You’d be hard-pressed to find a hybrid—they’re almost all sold out. They’re vehicles for people who want to live their life with more benefit and less complexity.”
                                  • US manufacturing activity contracted in February 2024, falling below the baseline for growth for the sixteenth consecutive month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 47.8% in February, down 1.3 percentage points from the 49.1% recorded in January. A reading above 50% indicates manufacturing expansion. February’s New Orders Index was in the contraction zone at 40.2%. The February Production Index was 48.4%, a decrease from January’s 50.4%. Eight manufacturing industries tracked by the ISM reported growth in February: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Primary Metals; Plastics & Rubber Products; Fabricated Metal Products; Chemical Products; Miscellaneous Manufacturing; and Transportation Equipment. The industries reporting contraction in February were Furniture & Related Products; Machinery; Wood Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; and Electrical Equipment, Appliances & Components.
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