The Automotive Industry and Global Trade

In the United States, one city is typically synonymous with the automotive industry. It’s challenging to think of an American made car without thinking of Detroit, Michigan, and in recent years the financial trouble the automobile giant has endured. Though foreign manufacturers in Japan and Korea have gained strength and drivers in the US, it doesn’t necessarily mean US automakers are done. MSNBC reported in late 2011 that the Big 3 in Detroit – Chrysler, Ford, and GM – enjoyed a nearly 30 percent increase due to a demand in sports utility vehicles and trucks.

Quick Facts About the Automotive Industry

Since 2000, an average of 48 million passenger cars alone have been manufactured annually around the world.

According to Worldometers, China produces one of every four new cars, and more than half of all cars are produced in Asia and Oceania.

Of the approximated one billion passenger cars on the road around the world, close to 25 percent of them are registered in the United States. (Source: International Organization of Motor Vehicle Manufacturers)

According to Businessweek, the top selling car in the world is the Toyota Corolla, with sales of well over 35 million.

Major Exporters of Automobiles

While China is one of the world’s largest producers of passenger vehicles, the country is not necessarily ranked high among top global exporters. The International Trade Centre recently put out a report on top automotive exporters, with the following leading the pack:

Germany – The roots of the German automotive industry date back to the late nineteenth century and the various patents owned by Karl Benz. Where in that time the country produced barely a thousand cars a year, now over five million are manufactured. Popular German brands include Mercedes-Benz, Volkswagen, BMW, and Porsche.

Japan – Gasoline-powered vehicles have been built in Japan early as 1907. Despite natural disasters that threatened the nation’s economy, Japan has worked to maintain its place among top car producers and exporters. Toyota, one of the top selling brands of all time, is based in Japan, as are Nissan, Honda, Mazda, and Subaru.

The United States – The US auto industry took a hit in recent years due to the economy. Through a combination of asset liquidation and government funding, the major brands (Ford, Chrysler, and General Motors) have worked to stay afloat. Despite this issues, the US remains a top producer with over seven million cars made on average in the country.

Republic of Korea – Over the last decade, South Korea has established itself as an automotive power thanks to an association between Daewoo Motors and GM, and Hyundai’s presence in the US with a major assembly plant.

Canada – While the country has no major native brand, Canada is important to the automotive industry by virtue of the many plants established by foreign brands, including Ford, Toyota, Chrysler and Honda.

Major Importers of Automobiles

While many countries produce domestic brands, automobile imports remain strong in economies that seek certain qualities, such as fuel efficiency and safety features. Among the top importers of automobiles:

The United States – Of the top brands sold in the US in the last year, many names bring to mind manufacturers from other lands: the Toyota Camry and Corolla, the Nissan Altima, and the Honda Civic and Accord.

Germany – While German brands dominated domestic sales in 2011, there is enough of a demand for foreign models to make Germany an important importer. Ford, Skoda (based in the Czech Republic), and Hyundai are popular names.

United Kingdom – Luxury is often synonymous with the British automotive industry. Aston Martin, Bentley, and Rolls Royce are three makes manufactured here, though Ford, Volkswagen, and the French Peugeot are seen more often on the roads.

Italy – Italy is known for the Fiat and Ferrari, but foreign makes like the Ford Fiesta, the French Citroen C3, and the Volkswagen Golf are also in demand.

France – The French appear greatly committed to domestic brands, particularly Renault and Peugeot, but foreign models from Ford, Volkswagen and the Romanian Dacia are gaining ground in the last year.

The Aftermarket

Equally important to the automotive industry is the manufacture and sale of auto parts and accessories, commonly known as the aftermarket. Sub-industries relevant to automobile sales may include products like tires and paint, stereo and GPS, engines and chemicals needed for operation, leather and vinyl for seating and safety features. According to the Automotive Aftermarket Industry Association (AAIA), the aftermarket in the US alone totals over $250 billion.

Though faltering economies and natural disasters have given the international automotive industry a number of challenges, one can conclude sales are destined to remain strong so long as the need for personal transportation remains. How and where people will by their cars may change over time as considerations for eco-friendly features grow in demand, but so long as people continue to buy automobiles the global industry will continue to gain speed.