Automobile Manufacturing Industry Profile

The US automobile manufacturing industry includes about 200 companies with combined annual revenue of about $200 billion. Major companies are GM, Ford, and Chrysler (which is controlled by Italy's Fiat). The US industry is highly concentrated: the top three companies account for more than 90 percent of revenue. Besides the largest automakers, the industry includes extremely small, boutique manufacturers and companies that only manufacture automotive chassis.

The global automobile manufacturing industry has annual revenue of more than $1 trillion. Leading auto companies based outside the US include Toyota (Japan), Volkswagen (Germany), Hyundai (South Korea), Peugeot (France), Fiat (Italy), and SAIC (China).

COMPETITIVE LANDSCAPE

Demand is driven by employment and interest rates. The profitability of individual companies depends on manufacturing efficiency, product quality, and effective marketing. Large companies have economies of scale in purchasing and marketing; smaller companies can compete by focusing on specialized markets. The industry is capital-intensive: average annual revenue per employee is about $1.5 million.

US-based automakers compete with numerous foreign rivals, including companies such as Toyota, Honda, and Nissan that have extensive auto assembly operations in the US. Through stateside manufacturing capacities and exports to the US, foreign carmakers collectively have about half of the US market.

Major sources of imports of cars and trucks to the US are Canada, Japan, Germany, and Mexico. Canada is the largest consumer of US exports. Operating under NAFTA, many US companies assemble autos in Mexico ...