Automotive Manufacturing Industry

After conducting extensive research into the current automotive industry status, where I focused on the performance and expectations for the industry’s future, the 2021 measured revenue of the US car and automobile manufacturing was $75 billion. This is compared to previous years, such as 2020 $69 billion, and in 2019 and 2018 $92 billion. Although we saw a rise from 2020 to 2021 in revenue the automobile manufacturing industry revenue will continue to not keep pace with previous years. As the domestic demand for new vehicles trends higher, three automotive hubs are expected to gain greater traction over the next few years. With that said the US automotive industry is heavily established in the Great Lakes region. This region represents just over 36% of the automobile manufacturers in the US. Some of the most successful automobile making are located here which include the Ford Motor Company, General Motors, and Fiat Chrysler. All these manufacturers are in Michigan which makes up 15% of all automobile manufacturing revenue in the US. With that said there are 2 more regions where automobile manufacturers operate that make up 50% of all us manufacturers’ locations. The Regions are the West Region, making up 25.4% of the industry locations, and the Southeast Region, making up 24.6% of the industry locations. After conducting research, the consumer’s current mindset is shifting towards a “greener” option for the automobile. This option would have a smaller carbon footprint, providing an increase in producing vehicles that are more environmentally friendly. As a result of this new stance on a “greener” option by the consumer the hybrid and the electric car are gaining popularity and are expected to multiply over the next five years (MarketLine 2018). “In 2025 the North American hybrid and electric cars market is forecasted to have a value of $36,474.6 million, an increase of 38.4% since 2020”

Due to the COVID-19 pandemic and the aftermath of that pandemic and the highest inflation the country has seen in years this past year has displayed limited growth in the automotive industry. With that said, experts expect the automotive industry to recover as our economic conditions improve or normalize. With the recent increase in oil prices during the last year has helped shift the consumer market away from large trucks and sedans. Meanwhile, electric car vehicle manufacturing has experienced significant growth in their industry. The current market is saturated by gasoline and diesel engines, but experts expect a shift to a greener option. Furthermore, competitors are not likely to join the industry based on the high entry barriers within the automotive manufacturing industry. The current industry challenges are better fuel efficiency, safety regulations, and consumer demands. “Recent pressures on consumers and the government to consider alternative fuel options to limit the effects of pollution has been mounting, and the combination of the pressure together with a healthier automotive market has helped to spur o the hybrid and electric car market”. The impacts that should be considered to cost and profit are the prices of steel and aluminum.

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