Automotive Industry Overview
The United States automobile industry affects not just the individuals that live off it. Its success and downfall can also impact the people that somewhat depend on American auto technologies living inside and outside the US.
It is imperative to understand the basic economics of motor vehicles to understand the financial health of the industry as a whole, intelligently analyze past and ongoing trends, and foresee what may happen in the near future.
There is no definitive source of information about the American car industry, but below are many of the stats and facts that have been painting the portrait of the automotive landscape in the USA of late.
Notable US Automotive Industry Statistics That Are Changing the Auto Business in 2019 (Editor’s Choice)
- 2019 sales of light vehicles started weak.
- The revenue per utility vehicle auto brands pocketed in Q1 2019 skyrocketed from $800 to $33,100 compared to the same time last year.
- Over one million plug-in electric vehicles now roam American roads.
- California’s 20,285 public EV chargers outnumber the total charging stations of the next six states.
- The average weekly hours of the labor force in auto manufacturing went down, but the national average of wages improved.
- Over 360,000 auto industry workers might lose their jobs due to a possible increase in tariffs on US imports.
People Also Ask
What is the worth of the automotive industry in the USA?
According to the American Automotive Policy Council, the automotive industry is the largest manufacturing sector in the United States. The organization’s 2018 report says that the automakers in the country have exported vehicles and parts worth over $692 billion over the past five years.
The National Automobile Dealers Association highlighted in its 2018 review that new-vehicle sales breached $1 trillion. Dealerships across the country wrote over 310 million repair orders, raking in $116 billion worth of revenue in maintenance.
The Automotive Aftermarket Network estimates the value of the aftermarket segment, which includes over 530,000 individual businesses serving light, medium, and heavy-duty vehicles, to go over $400 billion in 2019.
Is the automotive industry growing?
Experts estimated the country’s auto industry size to shrink in 2018, but the retail sales exceeded expectations. According to Forbes, carmakers in the US sold a total of 17.3 million units that year, which was an increase of 0.6% from 2017.
Despite being proven wrong, industry observers once again believe that the US will sell fewer vehicles in 2019. While others expect a fall of about 4%, Fitch Solutions conservatively predicts a decline of just 1.8% in sales.
The outlook for the new-vehicle sales side of the industry may be bleak, but the forecast for the aftermarket one is bright. The Automotive Aftermarket Network is optimistic that the sales of car parts and accessories will be worth $433 billion by 2021.
Also, the used car dealers in the country have been getting bigger slices of the pie. Compared to the overall automotive industry growth rate, the value of the used-car sector has shown a much better improvement, increasing at an average of 3.9% between 2014 and 2019.
IBISWORLD believes used car dealerships to make $116.2 billion in 2019, which is 2.1% higher from the previous year.
Who are the major players in the automobile industry in the United States?
FCA US, Ford, and General Motors are the top three auto brands that drive the US automotive industry. These companies employ about two-thirds of all autoworkers and run three in every five car assembly plants in the country.
The same American Automotive Policy Council report discusses that these leading automakers produced more than 5.9 million vehicles in the country in 2017, which was equivalent to 77% of their US sales that same year.
How many people are employed in the US car industry?
The US automotive industry provides jobs to millions of Americans. Based on the national employment data (not seasonally adjusted) from the US Bureau of Labor Statistics, the manufacturing, wholesale, retail, and services sectors of the industry collectively employed an average of over 7.3 million workers throughout 2018.
Auto Sales Statistics
1. America has sold over 17 million cars for the fourth year in a row
This streak of delightful automobile sales stats may end in 2019, though. The surging interest rates are making the financing environment far less friendly, which, in turn, push consumers away from brand-new vehicles.
The sales of US light vehicles are expected to decline by 4% in 2019, which translates to 16.6 million units only. This phenomenon will begin a downward trend as the number of units sold is projected to go down to 16.5 million in 2020.
These numbers could get worse should a trade war with Europe happen due to the great disparity between the tariffs on European and American cars
2. Light-vehicle sales in 2019 are off to a bad start
Just like the experts predicted, automakers in America sold 2.9% fewer vehicles in February 2019. The figure is the lowest annualized selling rate the industry has seen in 18 months. According to the automobile stats reported in January and February, the sales were down 2.6% year to date, which is the worst decline for the first two months of a year since the end of the last decade.
3. 62% of prime car buyers chose used vehicles in Q1 2019
The industry may be selling fewer brand-new vehicles, but Americans have not stopped buying. The majority of prime consumers are becoming more interested in used vehicles, for the average price of new cars on the market has gone over $36,000, and the interest rates have turned less appealing.
4. Smartphone purchases of automotive parts and accessories will increase by 27.6% in 2019
The US auto market is becoming more digital. Analysts predict that over $7.4 billion worth of car parts and accessories will be sold using mobile phones in 2019. The figure reported in 2018 was just $5.8 billion. By 2022, smartphone sales are projected to hit the $13-billion mark.
5. Amazon will sell $8 billion worth of OEM replacement parts and car care products in 2019
“First-party sales,” or 1P sales, represent most of Amazon’s auto parts sales. Amazon’s 1P sales are projected to reach $5.3 billion in 2019, while its 3P sales will likely generate about $2.6 billion.
Before 2020 arrives, the retail giant hopes to shift more valuable high-volume auto parts to 1P, which will increase its financial clout in the United States automobile industry. At the same time, the company aims to move the low-volume automotive products and smaller brands in the space to 3P.
Automotive Industry Revenue Numbers
6. The average revenue per utility vehicle escalated from $800 to $33,100 in Q1 2019
The pockets of automakers are not hurting despite the cooling off of the overall auto retail market. Manufacturers are shifting their focus to more profitable SUVs, pickups, and crossover utility vehicles, which increased in sales by 2% in the first quarter of 2019. This automobile statistic inspires optimism for the industry’s immediate future.
7. Rising used-car demand gifted dealers a historic sales year
Dealership groups owe a debt of gratitude to scorching demand for used vehicles to achieve sales milestones in 2018. Group 1 Automotive retailed 13.9% more used cars in 2018 to attain an all-time high of $11.6 billion in revenue.
Asbury Automotive also had a prosperous 2018 after setting a new revenue record of $6.9 billion. The company’s used-car sales grew by 5%, resulting in an increase of 7% in used-vehicle gross profit.
Stunning US Automotive Industry Statistics
8. Auto sales in 2018 went over 17 million units because of millennials
The millennials saved America’s auto retail market from a probable year-over-year sales decline. Nobody saw the relatively high car demand from the millennials, for they have been widely stereotyped as consumers who are not enamored with automobiles.
Many of these adults have reached the age where private vehicle ownership is considered practical and viable, allowing them to rescue the industry for the second straight year.
9. Tesla’s revenue grew by 82.5%
The forward-looking startup, which has been criticized for its questionable profitability, shocked doubters by dominating the automotive statistics in terms of EV sales. Three of Tesla’s cars made it to the top five of 2018’s best-selling EV list, led by Model 3.
10. US upstart EV companies raised $2 billion within months to challenge Tesla
Venture capitalists are creating more competition to test the resilience of Tesla, the current EV market leader. The new breed of startups collected massive amounts of cash over the first half of 2018, most of which went to newborn automakers.
11. There were 1,241,437 plug-in EVs on American roads in May 2019
From just a little over 1,000 plug-in EVs across America in December 2010, there are now more than a million. Tesla’s Model 3 is the reigning best-seller in the automotive industry in the USA with 187,971 units sold.
12. California has more public EV charging stations than the next top six states combined
In May 2019, the Golden State has 20,285 public EV supply equipment charging outlets to help allay the range anxiety of its environment-conscious motorists. The next six states with the most public EV chargers (Texas, Florida, New York, Washington, Georgia, and Colorado) only have 16,022 altogether.
13. Number of US dealers dropped for the first time since 2013
The dealership count dipped by 0.3%, or 52 stores, bringing the number down to 18,275 in January 2019. The sum of new-vehicle franchises fell by 0.5%, or 172 franchises, which is now just 32,099.
The decrease in General Motors and Ford dealerships and franchises was the biggest factor in these amazing automotive industry stats.
Facts About the Auto Industry Jobs
14. The average weekly hours of workers in auto manufacturing declined
The labor force in automobile production in the United States saw their average weekly hours decreased between May 2018 and May 2019. In 2018, the average weekly hours of production workers in the motor vehicle and parts manufacturing was 44.7 hours. In May 2019, it dropped to 42.9 hours.
15. The national average of wages of workers in auto manufacturing increased
Although these employees work fewer hours this year compared to 2018, they are slightly making more money so far. Based on automobile industry stats from the government, the annual average of hourly earnings was $22.77 in 2018.
In May 2019, it surged to $23.13. Between May 2018 and May 2019, the hourly wage of these workers rose by $0.69.
16. Trade uncertainty could render 366,000 auto industry workers jobless
Greater tariffs on US auto imports, if imposed, would affect the cost of every motor vehicle manufactured and sold in the country, for there is no such thing as a 100% American-built car. An average vehicle assembled in the United States comprises about 40% to 50% imported content.
In consequence, the average price of a vehicle in America could go up by $2,750 and cut retail auto sales by 1.3 million units per year. The Center for Automotive Research estimates that the United States automobile industry could see a widespread job loss 96 times worse than the impact on employment of the impending closure of four General Motors plants.
17. 19,802 job cuts reported from January to April 2019
This workforce reduction is the most for the first four months of a year since the last financial crisis. March had it the worst with 8,838 job losses.
These cuts are over 200% more than those announced during the same time in 2018, and 11 times higher than those recorded in 2014.
Layoffs are happening at a rapid rate since the traditional automakers are rather struggling to cope with the ever-changing consumer demand and aggressive tech-based rivals.
18. Automakers plan to welcome 18,650 new hires
The auto industry is not just saying goodbye to its thousands of seasoned workers, many of which were offered buyouts and severance packages. It is also trying to make room for fresh blood. Auto statistics show that the job cuts may have hit a 10-year high, but the new positions about to be open outstrip them.
Automobile Industry Trends
19. Tariff risk is compelling foreign companies to set up shop in America
Other than the reasonable domestic demand, stronger protection from potentially higher tariffs is persuading German and Japanese automakers to invest more in the United States.
Volkswagen will spend $800 million to build a production facility in Chattanooga, Tennessee. The plant will begin manufacturing EVs in 2022.
In other news, Toyota and Mazda are joining forces to construct an assembly plant in Huntsville, Alabama. The factory, which costs about $1.6 billion and will have a production capacity of 300,000 units a year, will be up and running in 2021.
Despite the high level of trade uncertainty, these developments would minimize its potential negatives of tariff risk on German, Japanese, and American auto industries.
20. The auto industry is becoming widely digitized and extremely controversial
Telematics is paving the way for tremendous vehicle repair information collection and analysis. OEMs have a monopoly over the mountains of data, which can be worth billions of dollars. While the digitization of automobiles is beneficial, it has been triggering equal accessibility pleas from independent repair shops.
21. Car subscription will become the primary alternative to private vehicle ownership
If car subscription becomes fully accessible and available in multiple offerings, it would claim the largest share of miles traveled among all alternative vehicle ownership models in the US auto industry. When it transpires, car subscription programs would command 23.9% of the share, while ride-hailing and car-sharing would only have 1% and 0.8%, respectively.
22. Automaker team-ups are in vogue
Fierce rivals are partnering to lower the risks that come with the uncertainty about the industry’s future.
Private vehicle ownership is forecasted to slide down as consumers continue to embrace other mobility options, and electric and self-driving technologies require billions of dollars to develop.
As a result, traditional automakers are setting aside their egos to share the burden of contending with such challenges instead of amplifying it.
Ford and Volkswagen, as well as General Motors and Honda, shook hands to build autonomous vehicles together. Daimler and BMW had the same intention when they forged an alliance, but enriching their ride-hailing and subscription-based services was another reason for their collaboration.
Automakers experienced several highs and lows of late, but most of them are adapting well to our increasingly changing world. Whether you are a stakeholder in the United States automobile industry or not, the said stats and facts hopefully can help you understand the automotive landscape in America.
After all, your ability to comprehend what is going on with car sales and trends is just as good as the depth of your industry knowledge.