Automotive industry

The automotive industry comprises a wide range of companies and organizations involved in the design, development, manufacturing, marketing, selling, repairing, and modification of motor vehicles.[1] It is one of the world's largest industries by revenue (from 16% such as in France up to 40% to countries like Slovakia).[2]

An automotive assembly line at Opel Manufacturing Poland in 2015

The word automotive comes from the Greek autos (self), and Latin motivus (of motion), referring to any form of self-powered vehicle. This term, as proposed by Elmer Sperry[3] (1860–1930), first came into use with reference to automobiles in 1898.

History
Main article: History of the automobile
The Thomas B. Jeffery Company automobile factory in Kenosha, Wisconsin around 1916
Fiat 1800 and 2100 sedans being assembled at a Fiat factory in 1961

The automotive industry began in the 1860s with hundreds of manufacturers that pioneered the horseless carriage. Early car manufacturing involved manual assembly by a human worker. The process evolved from engineers working on a stationary car, to a conveyor belt system where the car passed through multiple stations of more specialized engineers. Starting in the 1960s, robotic equipment was introduced to the process, and today most cars are produced largely with automated machinery.[4]

For many decades, the United States led the world in total automobile production. In 1929, before the Great Depression, the world had 32,028,500 automobiles in use, and the U.S. automobile industry produced over 90% of them. At that time, the U.S. had one car per 4.87 persons.[5] After 1945, the U.S. produced about 75 percent of world's auto production. In 1980, the U.S. was overtaken by Japan and then became a world leader again in 1994. In 2006, Japan narrowly passed the U.S. in production and held this rank until 2009, when China took the top spot with 13.8 million units. With 19.3 million units manufactured in 2012, China almost doubled the U.S. production of 10.3 million units, while Japan was in third place with 9.9 million units.[6] From 1970 (140 models) over 1998 (260 models) to 2012 (684 models), the number of automobile models in the U.S. has grown exponentially.[7]

Safety
Main article: Automobile safety
See also: 2009–11 Toyota vehicle recalls, General Motors ignition switch recalls, and Firestone and Ford tire controversy
A 2010 Hyundai Tucson used for a crash test by the National Highway Traffic Safety Administration

Safety is a state that implies being protected from any risk, danger, damage, or cause of injury. In the automotive industry, safety means that users, operators, or manufacturers do not face any risk or danger coming from the motor vehicle or its spare parts. Safety for the automobiles themselves implies that there is no risk of damage.

Safety in the automotive industry is particularly important and therefore highly regulated. Automobiles and other motor vehicles have to comply with a certain number of regulations, whether local or international, in order to be accepted on the market. The standard ISO 26262, is considered one of the best practice frameworks for achieving automotive functional safety.[8]

In case of safety issues, danger, product defect, or faulty procedure during the manufacturing of the motor vehicle, the maker can request to return either a batch or the entire production run. This procedure is called product recall. Product recalls happen in every industry and can be production-related or stem from raw materials.

Product and operation tests and inspections at different stages of the value chain are made to avoid these product recalls by ensuring end-user security and safety and compliance with the automotive industry requirements. However, the automotive industry is still particularly concerned about product recalls, which cause considerable financial consequences.

Economy
See also: Automotive industry by country
An advertisement for the Pontiac 6, circa 1928

In 2007, there were about 806 million cars and light trucks on the road, consuming over 980 billion litres (980,000,000 m3) of gasoline and diesel fuel yearly.[9] The automobile is a primary mode of transportation for many developed economies. The Detroit branch of Boston Consulting Group predicted that, by 2014, one-third of world demand would be in the four BRIC markets (Brazil, Russia, India, and China). Meanwhile, in developed countries, the automotive industry has slowed.[10] It is also expected that this trend will continue, especially as the younger generations of people (in highly urbanized countries) no longer want to own a car anymore, and prefer other modes of transport.[11] Other potentially powerful automotive markets are Iran and Indonesia.[12] Emerging automobile markets already buy more cars than established markets.

According to a J.D. Power study, emerging markets accounted for 51 percent of the global light-vehicle sales in 2010. The study, performed in 2010 expected this trend to accelerate.[13][14] However, more recent reports (2012) confirmed the opposite; namely that the automotive industry was slowing down even in BRIC countries.[10] In the United States, vehicle sales peaked in 2000, at 17.8 million units.[15]

In July 2021, the European Commission released its "Fit for 55" legislation package,[16] which contains important guidelines for the future of the automotive industry; all new cars on the European market must be zero-emission vehicles from 2035.[17]

The governments of 24 developed countries and a group of major car manufacturers including GM, Ford, Volvo, BYD Auto, Jaguar Land Rover and Mercedes-Benz committed to "work towards all sales of new cars and vans being zero emission globally by 2040, and by no later than 2035 in leading markets".[18][19] Major car manufacturing nations like the United States, Germany, China, Japan and South Korea, as well as Volkswagen, Toyota, Peugeot, Honda, Nissan and Hyundai, did not pledge.[20]

Environmental impacts
Trucks' share of US vehicles produced, has tripled since 1975. Though vehicle fuel efficiency has increased within each category, the overall trend toward less efficient types of vehicles has offset some of the benefits of greater fuel economy and reduction of carbon dioxide emissions.[21]

The global automotive industry is a major consumer of water. Some estimates surpass 180,000 L (39,000 imp gal) of water per car manufactured, depending on whether tyre production is included. Production processes that use a significant volume of water include surface treatment, painting, coating, washing, cooling, air-conditioning, and boilers, not counting component manufacturing. Paintshop operations consume especially large amounts of water because equipment running on water-based products must also be cleaned with water.[22]

In 2022, Tesla's Gigafactory Berlin-Brandenburg ran into legal challenges due to droughts and falling groundwater levels in the region. Brandenburg's Economy Minister Joerg Steinbach said that while water supply was sufficient during the first stage, more would be needed once Tesla expands the site. The factory would nearly double the water consumption in the Gruenheide area, with 1.4 million cubic meters being contracted from local authorities per year — enough for a city of around 40,000 people. Steinbach said that the authorities would like to drill for more water there and outsource any additional supply if necessary.[23]

World motor vehicle production
World motor vehicle production[24]
Production volume (1000 vehicles)

1960s: Post-war increase

1970s: Oil crisis and tighter safety and emission regulation

1990s: Production started in NICs.

2000s: Rise of China as a top producer

Automotive industry crisis of 2008–2010
To 1950: US had produced more than 80% of motor vehicles.[25]

1950s: United Kingdom, Germany, and France restarted production.

1960s: Japan started production and increased volume through the 1980s. United States, Japan, Germany, France, and the United Kingdom produced about 80% of motor vehicles through the 1980s.

1990s: South Korea became a volume producer. In 2004, Korea became No. 5 passing France.

2000s: China increased its production drastically, and became the world's largest-producing country in 2009.

2010s: India overtakes Korea, Canada, Spain to become 5th largest automobile producer.

2013: The share of China (25.4%), India, Korea, Brazil, and Mexico rose to 43%, while the share of United States (12.7%), Japan, Germany, France, and United Kingdom fell to 34%.

2018: India overtakes Germany to become 4th largest automobile producer.
World motor production (1997–2016)

By year
See also: List of countries by motor vehicle production
Year Production Change Source
1997 54,434,000 — [26]
1998 52,987,000 Decrease 2.7% [26]
1999 56,258,892 Increase 6.2% [27]
2000 58,374,162 Increase 3.8% [28]
2001 56,304,925 Decrease 3.5% [29]
2002 58,994,318 Increase 4.8% [30]
2003 60,663,225 Increase 2.8% [31]
2004 64,496,220 Increase 6.3% [32]
2005 66,482,439 Increase 3.1% [33]
2006 69,222,975 Increase 4.1% [34]
2007 73,266,061 Increase 5.8% [35]
2008 70,520,493 Decrease 3.7% [36]
2009 61,791,868 Decrease 12.4% [37]
2010 77,857,705 Increase 26.0% [38]
2011 79,989,155 Increase 3.1% [39]
2012 84,141,209 Increase 5.3% [40]
2013 87,300,115 Increase 3.7% [41]
2014 89,747,430 Increase 2.6% [42]
2015 90,086,346 Increase 0.4% [43]
2016 94,976,569 Increase 4.5% [44]
2017 97,302,534 Increase 2.36% [45]
2018 95,634,593 Decrease 1.71% [46]
2019 91,786,861 Decrease 5.2% [47]
2020 77,621,582 Decrease 16% [48]
2021 80,145,988 Increase 3.25% [49]
2022 85,016,728 Increase 6.08% [50]

[51]

Percentage of exported cars by country (2014)[52]
Global automobile import and export in 2011

By country
Main article: Automotive industry by country

The OICA counts over 50 countries that assemble, manufacture, or disseminate automobiles. Of those, only 15 countries (boldfaced in the list below) currently possess the capability to design original production automobiles from the ground up.[53][54]


Top 20 motor vehicle producing countries (2022)
Country Motor vehicle production (units)
China
27,020,615
United States
10,060,339
Japan
7,835,519
India
5,456,857
South Korea
3,757,049
Germany
3,677,820
Mexico
3,509,072
Brazil
2,369,769
Spain
2,219,462
Others
2,030,138
Thailand
1,883,515
Indonesia
1,470,146
France
1,383,173
Turkey
1,352,648
Canada
1,228,735
Czech Republic
1,224,456
Slovakia
1,000,000
United Kingdom
876,614
Italy
796,394
Malaysia
702,275

† = cars and LCV only[55]

By manufacturer
Main article: List of manufacturers by motor vehicle production
See also: List of car brands

These were the 15 largest manufacturers by production volume in 2017, according to OICA.[51]

RankGroupCountryVehicles
1ToyotaJapan10,466,051
2Volkswagen GroupGermany10,382,334
3HyundaiSouth Korea7,218,391
4General MotorsUnited States6,856,880
5FordUnited States6,386,818
6NissanJapan5,769,277
7HondaJapan5,236,842
8Fiat Chrysler AutomobilesaItaly/United States4,600,847
9RenaultFrance4,153,589
10PSA GroupaFrance3,649,742
11SuzukiJapan3,302,336
12SAICChina2,866,913
13DaimlerGermany2,549,142
14BMWGermany2,505,741
15GeelyChina1,950,382

Notable company relationships

Stake holding

It is common 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:

China joint venture

Outside China

See also

Notes

^a These figures were before the merger of both Fiat Chrysler Automobiles and Groupe PSA; the latter of which has merged into Stellantis as of January 2021.

References
  1. Automotive industry at the Encyclopædia Britannica
  2. "The 2021 EU Industrial R&D Investment Scoreboard" (PDF). European Commission. Retrieved 27 February 2022.
  3. Scientific and Technical Societies of the United States (Eighth ed.). Washington, DC: National Academy of Sciences. 1968. p. 164. Retrieved 25 March 2014.
  4. "The Timeline: Car manufacturing". The Timeline: Car Manufacturing. The Independent. 23 October 2011.
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  6. "2012 Production Statistics". OICA. Retrieved 6 August 2013.
  7. Aichner, T.; Coletti, P (2013). "Customers' online shopping preferences in mass customization". Journal of Direct, Data and Digital Marketing Practice. 15 (1): 20–35. doi:10.1057/dddmp.2013.34. S2CID 167801827.
  8. "ISO 26262-10:2012 Road vehicles -- Functional safety -- Part 10: Guideline on ISO 26262". International Organization for Standardization. Retrieved 25 March 2014.
  9. "Automobile Industry Introduction". Plunkett Research. 2008. Archived from the original on 19 December 2010. Retrieved 25 March 2014.
  10. Khor, Martin. "Developing economies slowing down". twnside.org.sg. Archived from the original on 13 October 2012. Retrieved 21 July 2015.
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  12. Eisenstein, Paul A. (21 January 2010). "Building BRIC's: 4 Markets Could Soon Dominate the Auto World". TheDetroitBureau.com.
  13. Bertel Schmitt (15 February 2011). "Auto Industry Sets New World Record In 2010. Will Do It Again In 2011". The Truth About Cars. Retrieved 6 April 2019.
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  15. "U.S. vehicle sales peaked in 2000". The Cherry Creek News. 27 May 2015. Archived from the original on 28 May 2015. Retrieved 18 June 2015.
  16. "European Green Deal: Commission proposes transformation of EU economy and society to meet climate ambitions". European Commission. 14 July 2021.
  17. "Fit for 55: European Union to end sale of petrol and diesel models by 2035". Autovista24. 14 July 2021.
  18. "COP26: Deal to end car emissions by 2040 idles as motor giants refuse to sign". Financial Times. 8 November 2021. Archived from the original on 10 December 2022.
  19. "COP26: Every carmaker that pledged to stop selling fossil-fuel vehicles by 2040". CarExpert. 11 November 2021.
  20. "COP26: Germany fails to sign up to 2040 combustion engine phaseout". Deutsche Welle. 10 November 2021.
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  23. Raymunt, Monica; Wilkes, William (22 February 2022). "Elon Musk Laughed at the Idea of Tesla Using Too Much Water. Now It's a Real Problem". bloomberg.com.
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  29. "2001 Production Statistics". oica.net.
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  41. "2013 Production Statistics". oica.net.
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  51. OICA: World Ranking of Manufacturers
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  61. Toyota buys stake in Mazda, joint US factory, EV development planned | CarAdvice
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Further reading
  • Ajitha, P. V., and Ankita Nagra. "An Overview of Artificial Intelligence in Automobile Industry–A Case Study on Tesla Cars." Solid State Technology 64.2 (2021): 503–512. online
  • Banerjee, Preeta M., and Micaela Preskill. "The role of government in shifting firm innovation focus in the automobile industry" in Entrepreneurship, Innovation and Sustainability (Routledge, 2017) pp. 108–129.
  • Bohnsack, René, et al. "Driving the electric bandwagon: The dynamics of incumbents' sustainable innovation." Business Strategy and the Environment 29.2 (2020): 727–743 online.
  • Bungsche, Holger. "Regional economic integration and the automobile industry: automobile policies, division of labour, production network formation and market development in the EU and ASEAN." International Journal of Automotive Technology and Management 18.4 (2018): 345–370.
  • Chen, Yuan, C-Y. Cynthia Lin Lawell, and Yunshi Wang. "The Chinese automobile industry and government policy." Research in Transportation Economics 84 (2020): 100849. online
  • Clark, Kim B., et al. "Product development in the world auto industry." Brookings Papers on economic activity 1987.3 (1987): 729–781. online
  • Guzik, Robert, Bolesław Domański, and Krzysztof Gwosdz. "Automotive industry dynamics in Central Europe." in New Frontiers of the Automobile Industry (Palgrave Macmillan, Cham, 2020) pp. 377–397.
  • Imran, Muhammad, and Jawad Abbas. "The role of strategic orientation in export performance of China automobile industry." in Handbook of Research on Managerial Practices and Disruptive Innovation in Asia (2020): 249–263.
  • Jetin, Bruno. "Who will control the electric vehicle market?" International Journal of Automotive Technology and Management 20.2 (2020): 156–177. online
  • Kawahara, Akira. The origin of competitive strength: fifty years of the auto industry in Japan and the US (Springer Science & Business Media, 2012).
  • Kuboniwa, Masaaki. "Present and future problems of developments of the Russian auto-industry." RRC Working Paper Series 15 (2009): 1–12. online
  • Lee, Euna, and Jai S. Mah. "Industrial policy and the development of the electric vehicles industry: The case of Korea." Journal of technology management & innovation 15.4 (2020): 71–80. online
  • Link, Stefan J. Forging Global Fordism: Nazi Germany, Soviet Russia, and the Contest over the Industrial Order (2020) excerpt; influential overview
  • Liu, Shiyong. "Competition and Valuation: A Case Study of Tesla Motors." IOP Conference Series: Earth and Environmental Science . Vol. 692. No. 2. (IOP Publishing, 2021) online
  • Miglani, Smita. "The growth of the Indian automobile industry: Analysis of the roles of government policy and other enabling factors." in Innovation, economic development, and intellectual property in India and China (Springer, Singapore, 2019) pp. 439–463.
  • Qin, Yujie, Yuqing Xiao, and Jiawei Yuan. "The Comprehensive Competitiveness of Tesla Based on Financial Analysis: A Case Study." in 2021 International Conference on Financial Management and Economic Transition (FMET 2021). (Atlantis Press, 2021). online
  • Rawlinson, Michael, and Peter Wells. The new European automobile industry (Springer, 2016).
  • Rubenstein, James M. The changing US auto industry: a geographical analysis (Routledge, 2002).
  • Seo, Dae-Sung. "EV Energy Convergence Plan for Reshaping the European Automobile Industry According to the Green Deal Policy." Journal of Convergence for Information Technology 11.6 (2021): 40–48. online
  • Shigeta, Naoya, and Seyed Ehsan Hosseini. "Sustainable Development of the Automobile Industry in the United States, Europe, and Japan with Special Focus on the Vehicles' Power Sources." Energies 14.1 (2021): 78+ online
  • Ueno, Hiroya, and Hiromichi Muto. "The automobile industry of Japan." on Industry and Business in Japan (Routledge, 2017) pp. 139–190.
  • Verma, Shrey, Gaurav Dwivedi, and Puneet Verma. "Life cycle assessment of electric vehicles in comparison to combustion engine vehicles: A review." Materials Today: Proceedings (2021) online.
  • Vošta, M. I. L. A. N., and A. L. E. Š. Kocourek. "Competitiveness of the European automobile industry in the global context." Politics in Central Europe 13.1 (2017): 69–89. online
  • Zhu, Xiaoxi, et al. "Promoting new energy vehicles consumption: The effect of implementing carbon regulation on automobile industry in China." Computers & Industrial Engineering 135 (2019): 211–226. online
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