Automotive industry

Industrial robots welding a car body in an assembly line.

The automotive industry designs, develops, manufactures, markets, and sells the world's 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, India and China saw the most rapid growth.

About 250 million vehicles are in the United States. Around the world, there were about 806 million cars and light trucks on the road in 2007; they burn over 260 billion gallons of gasoline and diesel fuel yearly. The numbers are increasing rapidly, especially in China and India.[3]

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.[4]

Contents

Crisis in the auto industry

Main article: Automotive industry crisis of 2008

The automotive industry crisis of 2008 occurred mainly as a result of the global financial crisis and the related credit crunch. In the United States, other contributing factors were pricing pressures on raw materials and substantially more expensive automobile fuels which, in particular, caused customers to turn away from large vehicles such as SUVs. In certain countries, particularly the United States, the industry has also suffered from relatively cheap imports available from countries such as Japan ]] and Europe. As of November 2008, the Big Three manufacturers, (General Motors, Ford and Chrysler), indicated that unless additional funding could be obtained over the short to medium term, there would be real dangers of bankruptcy.

History

Britain

Main article: British motor industry

The British motor industry has always been export oriented. Today it employs about 850,000 people and produces about 1.5 million cars and 216,000 commercial vehicles per year, 75% of which are exported.[5] The top five UK car producers are Nissan, Toyota, Honda, MINI and Land Rover.[6]

1896-1945

Hindered by the Red Flag Act (legislation designed to severely restrict the use of mechanically propelled vehicles on the public highway) the auto industry developed late in Britain. Following a law change in 1896, the Daimler Motor Company became the first British company created for the production of automobiles, and by 1900 there were more than fifty, and by 1905 more than two-hundred and twenty British companies concentrating on automobile production, with only America and France having a higher annual automobile production.[7] The stress was on high quality hand-made craftsmanship, regardless of high cost.

Ford opened a UK plant as early as 1911 and briefly had 40% of the British market. General Motors entered in 1925 by buying Vauxhall Motors.

By the end of the 1920s, the Morris Motor Company (founded by William Morris) and the Austin Motor Company (founded by Herbert Austin) dominated the domestic market, taking a 60% share between them. Morris modeled his methods after Henry Ford, and sought high volume production of inexpensive cars geared to the urban middle class. In 1931 Ford opened the largest auto plant in Europe at Dagenham, near London. In 1932 Britain became Europe's largest auto producer ahead of France. Rootes by this time had acquired Hillman and Humber and later in the 1930s added Talbot and the Sunbeam Car Company. At the end of the 1930s the leading producers were Morris, Austin, Ford, the Standard Motor Company, Rootes and Vauxhall.

Social impact

The 1920s were the great decade of expansion; private cars in use grew from 315,000 in 1922 to 1,042,000 in 1930, along with 334,000 trucks and 700,000 motorcycles. The gentry who bought cars before 1939 found driving was easy on rural Britain’s smooth road surfaces in its generally mild weather. The rural roads were famously narrow and winding, so cars were small with stiff springs for good handling characteristics on them. High taxes on gasoline and crowded streets encouraged smaller, fuel-efficient cars in the cities, where traffic lights came into use in the 1930s. Most cities replaced their trams with trolley-buses between 1926 and 1939. In London the first double-decker buses appeared in 1923.[8]

1945-2005

During the war all production was concentrated on war materials. After 1945 Britain became the world's largest automobile exporter, providing 52% of the world's exported vehicles in 1950. In 1953 Morris merged with Austin to form the British Motor Corporation (BMC), becoming the UK's largest producer. BMC specialized in small, economy sedans and sports cars, with 4 cylinder engines.

By the late 1950s, West German automobile manufacturers were benefiting from the Economic miracle and rapidly gained market share, followed soon by the French and Italian producers, and the UK lost most of its continental market through neglect and stagnation. At the end of the 1950s, the Rootes group acquired Singer. In 1966 BMC merged with Jaguar Cars and Pressed Steel to form British Motor Holdings, which then merged, in 1968, with the Leyland Motor Corporation, which had by then acquired the Rover Company and the Triumph Motor Company, to form the British Leyland Motor Corporation (BLMC) as Europe's fourth largest automaker.[9] Chrysler UK finished acquiring the Rootes group in 1967, a process it had started in 1964.

By 1970 Japanese firms identified the British market as the first major European market to attack because of the relative weakness of the domestic car industry.[10]

Stiff competition from Japanese and German cars, a reputation for shoddy workmanship and a breakdown in labor relations brought the British companies to near bankruptcy by 1975. The UK government effectively nationalized the bankrupt BLMC in 1975, rationalising the company into British Leyland, which produced 40% of the cars sold in Britain. The government provided £11 billion (in terms of 2008 £, or $16.5 billion in 2008 $) in bailouts. Wildcat strikes consumed more than 32 million worker-hours in 1977. Management cut employment in half, from 200,000 to 105,000 to cut expenses. In 1977 Chrysler sold its European interests to Peugeot, with Chrysler UK being renamed Peugeot Talbot.

After a decline in the UK market's significance for multinational automakers, Japanese manufacturers hoping to get around EEC trade restrictions established manufacturing plants in the UK. Nissan, Toyota and Honda all manufacture passenger cars in UK factories, primarily for car markets in Europe, Africa and the Middle East.

After a series of divestitures, British Leyland was renamed the Rover Group, which was eventually acquired by BMW, then split up into various divisions that were sold separately. MG Rover finally went bankrupt in 2005, ending the era of mass production by UK-owned automobile manufacturers. The remnants were bought by the Chinese government-owned manufacturers, SAIC and NAC, which later merged. Former British Leyland car brands include Jaguar and Land Rover, now owned by Tata Motors, MINI, owned by BMW and MG owned by SAIC/NAC. Only 22,000 workers remain employed at successor firms.[11]

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 automobile manufacturer Chrysler, then sold out in 2007 at a heavy loss as it never managed it to achieved long term profitability.

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 orders 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.[12]

Germany is famous for its upscale sedans. They feature well-designed suspension systems that provide both a soft ride and good handling characteristics. Many manufacturers limit their automobiles electronically to driving speeds of 250 km/h (155 mph) for safety reasons.

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.[13] Porsche formed his own company, which today produces expensive, high-quality sports cars.[14]. In 2008 the Porsche company sought control of the much larger Volkswagen company; Porsche cornered the market for Volkswagen stock and made profits of tens of billions of Euros, while apparently gaining control of the bigger company.

Japan

Main article: Japanese automobile industry

Japan, with its large population squeezed into very high density cities with good public transit, has limited roadways that carry very heavy traffic. Hence most automobiles are small in terms of size and weight. From a humble beginning, Japan is now the biggest auto manufacuring country in the world. Nissan began making trucks in 1914, and sold cars under the Datsun brand until it switched to Nissan in the 1980s. It opened its first U.S. plant in Tennessee in the early 1980s and a U.K. plant in 1986. It is 44% owned by Renault of France. Its luxury models carry the brand Infiniti. Honda, which began with motorcycles, emerged after World War II. Its luxury vehicles are sold under the Acura brand. Toyota began making cars in the 1930s and is now the world's largest producer. Its luxury models carry the Lexus brand. Toyota is famous for its innovative, quality-conscious management style, and its hybrid gas-electric vehicles, especially the Prius, which was launched in 1997. Other major companies include Subaru, Mitsubishi, Mazda, Suzuki, and Isuzu. Japan became the world's leading auto maker in 1980, the first year since 1905 that the United States had been outproduced by any other nation.

World motor vehicle production

See also: List of countries by motor vehicle production

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[15] for the parent group, and then alphabetically by marque.

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

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

** "Global" may be misleading; Ford has traditionally maintained largely distinct ranges under the Ford marque in the United States, United Kingdom, and mainland Europe, but these distinctions are fading and have gone altogether within Europe (including the UK).

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:

See also

References

  1. "World Motor Vehicle Production by Country: 2005 - 2007". OICA.
  2. "2008 Global Market Data Book", Automotive News, p. 5
  3. Plunkett Research, "Automobile Industry Introduction" (2008)
  4. IBISWorld Newsletter, June 2008, GLOBAL TRENDS Oil – The Crude Reality of Current trends, IBISWorld
  5. "Record breaking figures for 2007 UK vehicle production". SMMT (2008-01-25). Retrieved on 2008-11-19.
  6. "Motor Industry Facts 2008". SMMT.
  7. Jonathan Wood, ed. (1996). The Motor Industry of Britain Centenary Book. Eclat Initiatives. 
  8. Charles Loch Mowat, Britain between the Wars, 1918-1940 (1955) pp 231-35.
  9. Timothy R. Whisler, The British Motor Industry, 1945-1994: A Case Study in Industrial Decline (1999)
  10. Peter Johnson, ed. The Structure of British Industry (1988) ch. 8
  11. Nelson D. Schwartz, "A British Lesson on Auto Bailouts," New York Times, Nov. 17. 2008
  12. Terry Shuler, Volkswagen: Then, Now and Forever (1997)
  13. David Kiley, Driven: Inside BMW, the Most Admired Car Company in the World (2004); Ferry Porsche, We at Porsche: The Autobiography of Dr. Ing. h.c. Ferry Porsche (1977)
  14. Giancarlo Reggiani, Porsche: The Legend: 1948 to Today (2007)
  15. "World Motor Vehicle Production: World Ranking of Manufacturers 2007". OICA. Retrieved on 2008-07-29.
  16. "Mazda Motor Corporation". Hoovers.
  17. "Ford parks 33.9% ownership of Mazda in holding company" (PDF). Mazda. Retrieved on 2007-06-02.
  18. "Shareholder". Kia Motors. Retrieved on 2007-07-31.
  19. "Cerberus Takes Over Majority Interest in Chrysler Group and Related Financial Services Business for EUR 5.5 Billion ($7.4 billion) from DaimlerChrysler". DaimlerChrysler. Retrieved on 2007-07-31.
  20. "General Motors history". General Motors. Retrieved on 2007-10-06.
  21. Yumiko, Nishitani (2008-04-11). "Japan's Fuji Heavy shares rally on expanded alliance with Toyota group", Thomson Financial News. Retrieved on 2008-04-12. 

External links