Automotive industry

Please help improve this article or section by expanding it. Further information might be found on the talk page or at requests for expansion. (August 2008)

Industrial robots welding a car body in the white section of a production line.

The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2007, more than 73 million motor vehicles, including cars and commercial vehicles were produced worldwide.^[1]

In 2007, a total of 71.9 million new automobiles were sold worldwide: 22.9 million in Europe, 21.4 million in Asia-Pacific, 19.4 million in USA and Canada, 4.4 million in Latin America, 2.4 million in the Middle East and 1.4 million in Africa. ^[2] The markets in North America and Japan were stagnant, while those in South America and Asia grew strongly. Of the major markets, Russia, Brazil and China saw the most rapid growth.

In 2008, with rapidly rising oil prices, industries such as the automotive industry, are experiencing a combination of pricing pressures from raw material costs and changes in consumer buying habits. The industry is also facing increasing external competition from the public transport sector, as consumers re-evaluate their private vehicle usage.^[3]

Crisis in U.S. Auto industry

Main article: Automobile industry in the United States

The "Big Three" (General Motors, Ford and Chrysler) have done poorly in recent years. They have lost most of the market to imports and "transplants" (cars made in U.S. factories owned by foreign makes). The first signs came when Volkswagen and Honda started importing cheap, well-made cars in the 1960s. Detroit convinced Congress to impose quotas, and the foreign companies responded by opening their own plants in the U.S.

The "transplants" were built in the South and are non-union. Facing steady financial losses, The Big Three have closed many factories and drastically cut employment, especially in Michigan. They are handicapped by union contracts which require them to "buy out" union workers when plants close, at a typical cost of %100,000 to $150,000 each. Health care and pension costs add $1500 to the cost of each vehicle made by the Big Three, and their wage levels are much higher than the transplants. Average annual wages for production workers at the Big Three were $67,480 in 2007, and $81,940 for skilled workers. GM spun off some of its divisions into independent companies, such as Delphi in 1999. The spin-offs have shared Detroit's downturns, as have the U.S. owned plants in Canada.

In 2008 a series of damaging blows drove the Big Three to the verge of bankruptcy. Part of the cause was very high labor costs (much higher than the foreign plants in the U.S.), which prevents lower prices. The Big Three had in recent years stressed expensive, fuel-guzzling SUVs and large pickups. They were much more profitable than smaller, fuel-efficient cars. When gasoline prices shot past $4 in 2008, Americans stopped buying the big vehicles, and the Big Three saw their sales plummet. The Financial Crisis played a role as no one was willing to loan GM the money to buy Chrysler. Consumer credit has tightened and it became much harder for people with average or poor credit to obtain a bank loan to buy a car, so sales fell further. Stock prices fell as shareholders worried about bankruptcy; GM's shares fell to 1942 levels. Intense debate is underway about a massive bailout, that would be in addition to a $25 billion loan Congress passed in September 2008 to assist in increasing fuel efficiency.

In addition to the Big Three hundreds of large suppliers of parts are in financial crisis as well; most would go under if the Big Three go bankrupt.

Big Three bankruptcy scenario

Bankruptcy of the Big Three would be very expensive to the American economy as a whole and the government. Economists estimate it would mean loss of 240,000 very high paying jobs at the Big Three,^[4] a loss of 980,000 high-paying jobs at the suppliers and local dealers, plus the loss of 1.7 million additional jobs throughout the economy--a loss of 3 million jobs It would cause a decline in personal income of $151 billion the first year, and $398 billion over three years. The federal, state and local governments would lose tax revenue and spend on welfare programs a total of $156 billion over three years.^[5]

History

Germany

Main article: Automobile industry in Germany

Daimler-Benz is the industry's oldest firm, building automobiles since the late 1880s; its current structure dates from 1926. In 1998 it bought the American Chrysler, then sold out in 2007 at a heavy loss as it never integrated the new car in its line.

In the popular market, Opel and Volkswagen are most famous. Opel was a bicycle company that started making cars in 1898; General Motors bought it out in 1929, but the Nazi government took control and GM wrote off its entire investment. In 1948 GM returned and restored the Opel brand.

Volkswagen is dominant in the popular market; it purchased Audi in 1964. VW's most famous car was the small, beetle-shaped economical "people's car" with a rear-mounted, air-cooled engine. It was designed in the 1930s by Ferdinand Porsche upon order from Adolf Hitler, who was himself a car enthusiast. However production models appeared only after the war; until then only rich Germans had automobiles. By 1950 Volkswagen was the largest German automobile producer.^[6]

Germany is famous for its upscale sedans. They are designed for high-speed cruising over the autobahns. They feature well-designed suspension systems that provide both a soft ride and good handling characteristics on winding country roads. Engines are designed for sustained high-speed operation, though in general they are weak on acceleration.

Daimler-Benz produces the upscale Mercedes-Benz, long a famous name in racing. BMW (founded 1916) and Porsche are major factors in the luxury market.^[7] Porsche formed his own company, which today produces expensive, high-quality sports cars.^[8]. In 2008 the Porsche company sought control of the much larger Volkswagen company; Porsche corned the market for Volkswagen stock and made profits of tens of billions of Euros, while apparently gaining control of the bigger company.

World motor vehicle production

v • d • e « previous year Top 20 motor vehicle producing countries 2007
Motor vehicle production (1000 units)
Country																				1000										2000										3000										4000										5000										6000										7000										8000										9000										10000										11000										12000
Japan																																																																																				11596
United States																																																																																				10781
PR China																																																																																				8882
Germany																																																																																		6213 (includes GM Belgium)
South Korea																																																													4086
France																																																		3019
Brazil																																																		2971
Spain																																																	2890
Canada																																														2578
India																																											2307
Mexico																																									2095
UK																																						1750
Russia																																					1660
Italy																																	1284
Thailand																																1238
Turkey																															1099
Iran																														997
Czech Rep.																													939
Belgium																												844
Poland																												785
Reference: "World Motor Vehicle Production by Country: 2006–2007". OICA. Retrieved on 2008-03-18.

Top vehicle manufacturing groups (by volume)

The table below shows the world's largest motor vehicle manufacturing groups, along with the marques produced by each one. The table is ranked by the latest production figures from OICA 2007^[9] for the parent group, and then by marque.

Marque	Country of origin	Ownership	Markets
1. Toyota Motor Corporation ( Japan)
Daihatsu		Subsidiary	Global, except North America
Lexus		Division	Global, apart from South America with the exception of Chile and Argentina.
Scion		Division	United States
Toyota		Division	Global
2. General Motors Corporation ( United States)
Buick		Division	North America, China
Cadillac		Division	Global
Chevrolet		Division	Global
Daewoo		Subsidiary	Asia, Europe, South America
GMC		Division	North America, Middle East
Holden		Subsidiary	Australia, New Zealand, Middle East
Hummer		Division	Global
Pontiac		Division	North America
Opel		Subsidiary	Continental Europe, South Africa, apart from Asia, with the exception of Japan
Saab (cars)		Subsidiary	Global
Saturn		Subsidiary	North America, Japan, Republic of China
Vauxhall		Subsidiary	United Kingdom
3. Volkswagen Group (Volkswagen AG) ( Germany)
Audi		Subsidiary	Global
Bentley		Subsidiary	Global
Bugatti		Subsidiary	Global
Lamborghini		Subsidiary	Global
Scania		Subsidiary	Global
SEAT		Subsidiary	Europe, Latin America, South Africa
Škoda		Subsidiary	Global, except North America
Volkswagen		Subsidiary	Global
4. Ford Motor Company ( United States)
Ford		Division	Global
Lincoln		Division	North America, Middle East
Mercury		Division	North America, Middle East
Troller		Subsidiary	South America
Volvo		Subsidiary	Global
5. Honda Motor Company ( Japan)
Acura		Division	North America, China
Honda		Division	Global
6. PSA Peugeot Citroën ( France)
Citroën		Subsidiary	Global, except North America
Peugeot		Subsidiary	Global, except United States and Canada
7. Nissan Motors ( Japan)
Infiniti		Division	North America, Middle East, Taiwan, Korea
Nissan		Division	Global
8. Fiat S.p.A. ( Italy)
Abarth		Subsidiary	Global, except United States and Canada
Alfa Romeo		Subsidiary	Global, Canada (the 8C is sold in the USA)
Ferrari		Subsidiary	Global
Fiat		Division	Global, except United States and Canada
Iveco		Subsidiary	Global, except North America
Lancia		Subsidiary	Global, except North America
Maserati		Subsidiary	Global
9. Renault S.A. ( France)
Dacia		Subsidiary	Europe, Latin America, Asia, Africa
Renault (cars)		Division	Global, except United States and Canada
Renault Samsung		Subsidiary	Asia, South America
10. Hyundai Motor Company ( South Korea)
Hyundai		Division	Global
11. Suzuki Motor Corporation ( Japan)
Maruti Suzuki		Subsidiary	India, Middle East, South America
Suzuki		Division	Global
12. Chrysler LLC ( United States)
Chrysler		Division	Global
Dodge		Division	Global
Jeep		Division	Global
13. Daimler AG ( Germany)
Freightliner		Subsidiary	North America, South Africa
Maybach		Division	Global
Mercedes-Benz		Division	Global
Mitsubishi Fuso		Subsidiary	Global
Smart		Division	Western Europe, Southeast Asia, North America, South Africa
14. BMW AG ( Germany)
BMW		Division	Global
MINI		Division	Global
Rolls-Royce		Subsidiary	Global
15. Mitsubishi Motors Corporation ( Japan)
Mitsubishi		Division	Global
16. Kia Motors ( South Korea)
Kia		Subsidiary	Global
17. Mazda Motor Corporation ( Japan)
Mazda		Division[10]	Global
18. AvtoVAZ ( Russia)
Lada		Division	Russia, Finland, Sweden
VAZ		Division	Russia, Eastern Europe
19. First Automobile Works ( People's Republic of China)
Besturn		Division	China
Hongqi		Division	China
Huali		Subsidiary	China
Xiali		Subsidiary	China
20. Tata Motors Limited ( India)
Hispano		Subsidiary	Europe
Jaguar		Subsidiary	Global
Land Rover		Subsidiary	Global
Tata		Division	India, South Africa
Tata Daewoo		Subsidiary	South Korea
21. Fuji Heavy Industries ( Japan)
Subaru		Division	Global
22. Chang'an Motors ( People's Republic of China)
Chana		Division	China, South Africa
23. Isuzu Motors ( Japan)
Isuzu		Division	Global
24. Beijing Automotive Industry Holding Corporation ( People's Republic of China)
BAW		Subsidiary	China
25. Dongfeng Motor Corporation ( People's Republic of China)
Dongfeng		Division	China
26. Chery Automobile ( People's Republic of China)
Chery		Division	China, South Africa, Southeast Asia except Thailand
27. Shanghai Automotive Industry Corporation ( People's Republic of China)
MG		Subsidiary	UK
Roewe		Division	China
SsangYong		Subsidiary	South Korea, South Africa
28. Brilliance China Automotive Holdings ( People's Republic of China)
Brilliance		Division	China
Jinbei		Subsidiary	China
29. GAZ ( Russia)
GAZ		Division	Russia
LDV		Subsidiary	Europe
LiAZ		Subsidiary	Russia
30. Volvo Group ( Sweden)
Mack		Subsidiary	Global
Renault (trucks)		Subsidiary	Global
Nissan Diesel		Subsidiary	Global
Volvo (trucks)		Division	Global
31. Harbin Hafei Automobile Industry Group ( People's Republic of China)
Hafei		Division	China
32. Geely Automobile ( People's Republic of China)
Geely		Division	China
Maple		Subsidiary	China
33. Anhui Jianghuai Automobile ( People's Republic of China)
JAC		Division	China
34. Mahindra & Mahindra Limited ( India)
Mahindra		Division	India
35. Paccar Inc ( United States)
DAF		Subsidiary	Global except United States and Canada
Kenworth		Division	North America
Leyland		Subsidiary	Europe
Peterbilt		Division	North America
36. Great Wall Motor ( People's Republic of China)
Great Wall		Division	China
37. Jiangxi Changhe ( People's Republic of China)
Changhe		Division	China
38. Porsche ( Germany)
Porsche		Division	Global
39. BYD Auto ( People's Republic of China)
BYD		Division	China
40. China National Heavy Duty Truck Group ( People's Republic of China)
CNHTC		Division	China

Note 1: The OICA statistics rank the Toyota subsidiary companies Daihatsu and Hino separately; in this table they are included with Toyota.

Note 2: Ford and Renault own the rights to the Volvo and Renault marques for cars only; Volvo Group owns the rights to both marques for trucks.

Company relationships

It is not uncommon for automobile manufacturers to hold stakes in other automobile manufacturers. These ownerships can be explored under the detail for the individual companies.

Notable current relationships include:

• Porsche holds a 42.6% stake in the Volkswagen Group ^[11]
• The Renault-Nissan alliance involves two global companies linked by cross-shareholding, with Renault holding 44.3% of Nissan shares, and Nissan holding 15% of (non-voting) Renault shares.
• Ford holds a 33.9% stake in Mazda.^[12] and an 8.3% share in Aston Martin.
• Hyundai Motor Co. holds a 38.67% stake in Kia Motors.^[13]
• Daimler AG holds a 19.9% stake in Chrysler Holding LLC.^[14]
• General Motors still holds a 3% stake in Suzuki. Suzuki is also partner with GM in GMDAT and CAMI.^[15]
• The Volkswagen Group holds a 37.73% stake in Scania (68.6% voting rights).
• Renault holds 20.5% of the voting stakes in Volvo Group.
• Toyota holds a 51% stake in Daihatsu hence having a controlling interest in the company, and 16.5% in Fuji Heavy Industries, parent company of Subaru.^[16]

See also

Look up Automotive industry in
Wiktionary, the free dictionary.

• Category:Automotive industry by country
• Automotive market

References

External links

• Alliance of Automobile Manufacturers Alliance of Automobile Manufacturers at Wikipedia
• Automotive Industry Analysis
• The British Library - finding information on the automotive industry UK emphasis
• All vehicle manufacturers in the world (in Dutch with English etc. translation)
• Car makes of the world, 1894—present
• Automotive history and photos
• Automaker Rankings 2007: The Environmental Performance of Car Companies
• Computer Systems for Vehicle Distribution and Aftersales Support

Why are we here?
All text is available under the terms of the GNU Free Documentation License
This page is cache of Wikipedia. History