Automobile Engine and Parts Manufacturing in the US Industry Market Research Report from IBISWorld Has Been Updated

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Firms will compete with electric vehicles, but fuel-efficient engines will support growth.

Los Angeles, CA (PRWEB) October 21, 2013

Automobile engine manufacturers have endured a difficult five years. Leading up to 2008, high gasoline prices deterred consumers from purchasing new vehicles, and the economic downturn only exacerbated the industry's poor performance. Light-vehicle sales fell to an all-time low in 2009, and major companies General Motors and Chrysler underwent bankruptcy reorganization, requiring a bailout by the government. Recently, however, the automotive sector has been recovering as the economy improves. As a result, the Automobile Engine and Parts Manufacturing industry's revenue rebounded, soaring 36.4% in 2010. According to IBISWorld Inustry Analyst Brandon Ruiz, “Revenue is expected to grow another 2.1% during 2013; nevertheless, the recession's effects have outweighed the industry's recent gains overall.” Consequently, revenue is anticipated to decline at an annualized rate of 1.3% to $26.3 billion over the five years to 2013.

Engine efficiency has been a hot topic across the entire automotive sector, fueled by changing consumer preferences and looming legislative standards. Generally, consumers have shifted from light trucks and sport utility vehicles (SUVs) to more compact, fuel-efficient cars. Initially, major automakers suffered from the loss of sales, but most have since made strides in improving the fuel efficiency of their engines. Engine efficiency improvements also come on the heels of updates to Corporate Average Fuel Economy standards. These rules are expected to alter engine production over the next five years toward even stronger fuel economy. Overall, industry performance will be enhanced if developers continue improving gasoline engine efficiency. However, the industry will be threatened by the growing trend toward hybrid and electric engine technologies, which are not included in this industry.

A new threat to industry demand was created when the Chevrolet Volt and Nissan Leaf entered the market in 2011. “These electric vehicles (EVs) eliminate the need for a gasoline engine by running on an electric motor and a high-powered lithium-ion battery,” says Ruiz. Despite EV sales expanding dramatically in 2011, they are still miniscule compared with overall vehicle sales. Nonetheless, more rapid EV growth could undermine demand for engine manufacturing in the next five years. In response, the industry's lineup of fuel-efficient gasoline engines is growing, and the continued success of these engines is forecast to support industry revenue growth over the five years to 2018.

The Automobile Engine and Parts Manufacturing industry has a medium level of market share concentration. The four largest companies in this industry are General Motors Company, Ford Motor Company, Toyota Motor Corporation and Chrysler Group. Concentration has drifted upward since 2008, as industry players consolidated and stole market share from companies that were not able to survive the economic downturn.

For more information, visit IBISWorld’s Automobile Engine and Parts Manufacturing in the US industry report page.

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IBISWorld industry Report Key Topics

Companies in the Automobile Engine and Parts Manufacturing industry manufacture motor-vehicle gasoline engines and related parts including valves, pistons, crankshafts, camshafts, fuel injectors and pumps. This industry does not include hybrid engines, electric vehicle (EV) motors or diesel engines.

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Major Companies
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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 or call 1-800-330-3772.

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