AMERICAN AUTOMOBILE INDUSTRY

American Automobile Industry



American Automobile Industry

Executive Summary

The compound annual growth rate of the market volume in the period 1999-2003 was -0.7%. The US new cars market experienced a decline in 2008 and 2009. The US motorcycles market had total revenue of $4,508.1 million in 2010, representing a compound annual rate of change (CARC) of -19% between 2006 and 2010. There are a relatively large number of buyers within the motorcycle market, which coupled with a high level of product differentiation, weakens buyer power further. Amongst the providers, there are large, multinationals with a strong presence within the global markets which boosts their power. New entrants are likely to be put off by recent market decline and the filing of bankruptcy by large market players General Motors and Chrysler. Additionally, many of the major new car markets have faced recession, with buyers avoiding expensive purchases such as a new car. The main substitutes threatening players in the new cars market are used cars, alternative forms of personal transport, and public transport. Auto manufacturers totally committed to conventionally-powered cars may see hybrid powered vehicles as a threat. The United States motorcycles market is concentrated, with the top four players - namely Honda, Yamaha, Suzuki and Harley Davidson holding about 90.7% of the market share by volume.

Industry definition

The automotive industry is a vital part of the American economy. The motor car industry in America has very bright future and is focusing on the agenda of low carbon emission. It is investing in research and development, which will ensure safer, cleaner and fuel efficient motor cars. The US automotive manufacturing industry generated total revenue of $203.6 billion in 2010, representing a compound annual rate of change (CARC) of -7.7% between 2006 and 2010. Industry production volumes decreased with a CARC of -8.2% between 2006 and 2010, to reach a total of 8,329.5 thousand units in 2010 (Henry, 2008).

Industry profile

In 2003, the United States automobile market shrank, by 1.4% to reach a value of $398.1 billion. The compound annual growth rate of the market volume in the period 1999-2003 was -0.7%. Market maturity and the arduous economic conditions, have all contributed to the recent stagnation of the American automobile manufacturing industry. The competitive nature of the US market has been further emphasized by the increasing presence of European and Japanese brands among the best selling vehicles. However, US established companies continue to dominate the market with General Motors and Ford vying for pole position. The US new cars market experienced a decline in 2008 and 2009. The market recovered with strong growth in 2010, which is expected to last until the end of the forecast period. The US new cars market had total revenue of $197.1 billion in 2010, representing a compound annual rate of change (CARC) of -3.5% between 2006 and 2010. In comparison, the European market declined with a CARC of -1.6%, and the Asia-Pacific market increased with a compound annual growth rate (CAGR) of ...