Car & Automobile Manufacturing in the US Industry Market Research Report Now Available from IBISWorld

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The lingering effects of the recession have significantly altered the state of the Car and Automobile Manufacturing industry over the five years to 2012. At the onset of the turmoil in 2008, automakers had already been enduring crashing consumer demand for new vehicles. Things took a turn for the worse in 2009, though, as US vehicle sales fell to historic lows and industry revenue plummeted. The future of the industry over the next five years is much brighter. Industry profit margins will be relatively healthy in 2012 as companies benefit from a combination of operational efficiency at manufacturing plants enacted in 2009 and rising vehicle sales. Moving forward, automakers will focus production on smaller, lighter and more fuel-efficient vehicles to become more competitive in the wake of rising gas prices. Shifting consumer preferences, along with a general recovery in the demand for vehicles, will drive revenue through 2017. For these reasons, industry research firm IBISWorld has updated its report on the Car & Automobile Manufacturing industry.

IBISWorld Market Research

IBISWorld Market Research

Automakers are moving toward fuel efficient vehicles to remain competitive

The lingering effects of the recession have significantly altered the state of the Car and Automobile Manufacturing industry over the five years to 2012. At the onset of the economic turmoil in 2008, automakers had already been enduring crashing consumer demand for new vehicles. The situation took a turn for the worse in 2009, though, as US vehicle sales fell to historic lows and industry revenue plummeted an alarming 36.5%. The “Big Three” automakers (General Motors, Ford and Chrysler) all took desperate measures to get back on their feet. According to IBISWorld industry analyst Tony Danova, “these measures included plant closures, suspending research and development, drastically reducing employment and making pleas for government bailouts.” Despite these efforts, Chrysler and GM sought bankruptcy protection in May and June of 2009, respectively.

Operating within such volatile conditions, company market share has varied significantly within the five-year period. For example, General Motors, the largest US-based automobile manufacturer, has seen its market share dwindle rapidly since 2007. This dynamic has left significant opportunities for smaller foreign operators to radically change the industry landscape. “Hyundai-Kia Automotive group, a South Korea-based manufacturer, achieved phenomenal growth from 2007 to 2012,” says Danova. Nonetheless, several operators were forced to exit or be acquired by larger companies during the recession, as they were unable to operating within such volatile conditions.

Concerns of further turmoil in the Car and Automobile Manufacturing industry were staunched, however, with the uptick in vehicle sales and production over the past two years. As the economy slowly improved through 2010, consumer disposable incomes rose and financing options became more widely available, allowing consumers to unleash pent-up demand for new vehicle purchases that were delayed through the recession. This restored demand for new vehicle purchases shot revenue up 40.1% in 2010, while persistent production and sustained sales boosted revenue 12.5% in 2011. Continuing this recover, revenue is estimated to grow 4.8% in 2012. The success of the past two years has helped the industry mask some of the turmoil it faced during the recession; as a result, revenue is only expected to fall at an average annual rate of 0.2% to $90.7 billion over the five years to 2012.

The outlook for the Car and Automobile Manufacturing industry over the next five years is much brighter. Beginning in 2012, industry profit margins are expected to reach a relatively healthy 2.4% as companies benefit from rising vehicle sales and the cost cutting measures enacted in 2009, including better operational efficiency at manufacturing plants. By 2017, margins are also expected to grow in spite of rising input costs. Moving forward, automakers are expected to focus production on smaller, lighter and more fuel-efficient vehicles to become more competitive in the wake of rising gas prices. Shifting consumer preferences, along with a general recovery in the demand for vehicles, will boost revenue over the next five years. For more information, visit IBISWorld’s Car & Automobile Manufacturing in the US industry report page.

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IBISWorld industry Report Key Topics

Companies in this industry manufacture cars and automobile chassis. These companies, referred to as automakers, typically produce cars (including electric cars) in assembly plants. The manufacturing of light trucks (such as vans, pickups and SUVs), heavy trucks and motorcycles is excluded from this industry.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com

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Gavin Smith
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