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
Recent Developments
Apr 16, 2024 - Tesla Announces Layoffs
- 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.
- New light-vehicle sales SAAR totaled 15.5 million units in March 2024, up nearly 4% from the previous year but down slightly from the last month, according to NADA Market Beat. The average transaction price in March was $44,186, which was 3.6% lower year over year, according to JD Power. Growth in unit sales was generated by a higher number of vehicles on dealer lots and higher OEM incentives. Average incentive spending per unit increased to $2,800 in March, which was 66% higher year over year. New light-vehicle inventory on the ground and in transit was up 40% in March 2023 compared with March 2023. Sales volumes are projected to rise throughout the year, with the 2024 new-vehicle sales forecast expected to be 15.9 million units.
- 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 expanded in March 2024, rising above the baseline for growth after sixteenth consecutive months of contraction, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 50.3% in March, up 2.5 percentage points from the 47.8% recorded in February. A reading above 50% indicates manufacturing expansion. March’s New Orders Index was in the expansion zone at 51.4%. The March Production Index was 54.6%, an increase from February’s 48.4%. Nine manufacturing industries tracked by the ISM reported growth in March: Textile Mills; Nonmetallic Mineral Products; Paper Products; Petroleum & Coal Products; Primary Metals; Food, Beverage & Tobacco Products; Fabricated Metal Products; Chemical Products; and Transportation Equipment. The industries reporting contraction in March were Furniture & Related Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Machinery; Computer & Electronic Products; and Miscellaneous Manufacturing.
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