The global automotive industry is a highly diversified sector that comprises of
manufacturers, suppliers, dealers, retailers, original equipment manufacturers or
OEMs, aftermarket parts manufacturers, automotive engineers, motor mechanics, auto
electricians, spray painters or body repairers, fuel producers, environmental and
transport safety groups, and trade unions.
The automobile and automotive parts & components manufacturers constitute a major
chunk of automotive industry throughout the world. The automotive manufacturing
sector consists of automobile and light truck manufacturers, motor vehicle body
manufacturers, and motor vehicle parts and supplies manufacturers. This sector
is engaged in manufacturing of automotives and light duty motor vehicles, motor
vehicle bodies, chassis, cabs, trucks, automobile and utility trailers, buses,
military vehicles, and motor vehicle gasoline engines.
The Top Automaking Nations
United States, Japan, China, Germany and South Korea are the top five automobile
manufacturing nations throughout the world. The United States of America is the
world's largest producer and consumer of motor vehicles and automobiles
accounting for 6.6 million direct and spin-off jobs and represents nearly 10% of
the $10 trillion US economy. Automobile is one of the important industries in the
world, which provides employment to 25 million people in the world.
In the recent past, the auto parts manufacturing industry of Midwest lost 12.7%
of its employment. The various factors behind this decline are unemployment
recession, domestic relocation and foreign competition. This loss in employment
has badly affected this industry.
MAJOR MANUFACTURING REGIONS
Northeastern United States and Southern Great Lakes Region, Northwestern Europe,
Western Russia and the Ukraine, and Japan are the major manufacturing regions
of automotive in the world.
In North America, the prominent automotive manufacturing regions are New England,
New York and the Mid-Atlantic, Central New York, Pittsburgh/Cleveland, Western Great
Lakes, St. Lawrence Valley, Ohio and Eastern Indiana, Kanawha and middle Ohio Valley,
St. Louis, the Southeastern region, Gulf Coast, Central Florida, and the West Coast.
The European Union has the largest automotive production regions in the World. The key
automobile manufacturing regions are United Kingdom, Rhine-Ruhr River Valley, Upper
Rhine - Alsace - Lorraine region, and the Po Valley in Italy.
In the Western Russian and Ukraine Region, the leading industrial regions are Moscow,
the Ukraine region, the Volga region, the Urals regions, and the Kuznetsh Basin Region.
Major Industry Players
The worldwide automobile industry is largely dominated by five leading automobile
manufacturing corporations namely Toyota, General Motors, Ford Motor Company, Volkswagen AG,
and Daimler Chrysler. These corporations have their presence in almost every country and
they continue to invest into production facilities in emerging markets namely Latin America,
Middle East, Eastern Europe, China, Malaysia and other markets in Southeast Asia with the
main aim of reducing their production costs.
Global Automobiles and Components % Share, (By Volume 2004)
MAJOR SEGMENTS OF AUTOMOTIVE INDUSTRY
- General Motors - 10.10 %
- Toyota - 7.90 %
- Ford - 7.70 %
- Others - 74.30 %
Auto components amount to 31.5% share of the global automobiles and components industry
group's value. The global automotive component industry is highly diverse and comprises
of various product segments like engine parts, drive transmission and steering parts
suspension & braking parts, electrical parts and other auto components parts.
segment in the automotive component industry comprises of different parts
like engine parts, fuel delivery system and productssuch as pistons, piston rings
, engine valves, carburetors,and diesel-based fuel delivery systems. Engine parts form
one of largest product segment of the automotive components industry and have a
production share of 31%. A technology intensive segment, engine parts are moving
towards improved designs for optimal fuel consumption and lesser emission. The latest
trend in this sector is of outsourcing a part of the engine from vendors.
segment comprises of generators, starter motors and spark plugs
important and relatively larger product segment - engine parts are gaining popularity
at a faster pace in the global automotive parts & components industry. Electric start
mechanism in different scooter and motorcycles is the latest concept in the automobile
industry. Electrical parts sector contribute around 9% to the auto components industry.
Drive Transmission and Steering Parts
segment has sub segments like gears, wheels,
steering systems, axles, and clutches
. Having 19% share, this segment is considered
the largest product segment after engine parts segment. The emergence of different
leading automotive manufacturers is intensifying the competition in the sector
especially for products like gears
Suspension and Braking Parts
segment comprises of automobile components like brakes,
brake assemblies, leaf springs
, shock absorbers, brake linings. Suspension and braking
parts segment has around 12% share in the global auto component industry.
Body and Chassis Parts
segment comprises of body and chassis, sheet metal components
, and plastic-molded parts. The global sourcing of automotive components comprise of
chassis, frames, brakes, steering and much more has reached to US $ 185 billion in
2008-09. This product segment has 12% share in the global automotive component and
KEY INDUSTRY DRIVERS
The highlighting features of global automotive industry are:
- Offers support to other industries such as iron, steel, rubber, glass, plastic,
petroleum, textiles, oil & gas, paints & coatings, transportation industries.
- Rising foreign investments have led to the rapid growth in terms of automobile
production and exports. Overseas companies are making huge investments and are
installing extensive production capacities in developing countries.
- Continuous investment in research & development has resulted in increased
productivity and better quality automobiles, automotive accessories and parts.
- Increase in standards of living and purchasing power parity have resulted in the
increase demand of automobiles especially four-wheelers in developing nations, mostly
in South Asian region.
- This sector provides employment to major chunk of human population in the world
i.e. 25 million. This industry not only provides millions of jobs to the people, but
also produces billions of dollars in terms of worldwide revenues.
- Adequate infrastructural facilities in form of power supply, machinery, capital,
ready availability of raw materials and labor help in the tremendous growth of this
The automotive industry is witnessing tremendous and unprecedented changes these days.
This industry is slowly and gradually shifting towards Asian countries, mainly because
of saturation of automobile industry in the western world. The principal driving
markets for Asian automotive industry are China, India and ASEAN nations.
Low cost vehicles namely scooters, motorcycles, mopeds and bicycles have led to the
massive growth of some of the fastest developing economies like China and India. The
future of automotive industry in the Asian countries such as Thailand, Philippines,
Indonesia, and Malaysia is bright and promising because of the ASEAN free trade area
under which the export tariffs are very less.
On a global scale, the assets of the top ten automotive corporations accounts for 28%
of the assets of the world's top 50 companies, 29% of their employment and 30% of their
total sales. In the year 2006, the United States of America sold around 16 million of
new automobiles, Western Europe sold around 15 million, while China and India sold 4
million and one million respectively. Latin America, Middle East, Eastern Europe,
China, Malaysia and other South-Asian nations are now emerging as the dominant markets
of the automotive industry.
Most of the major automotive players are shifting their production facilities in these
emerging markets with the main purpose of gaining better access and reduction in their
production costs. There is an estimation that the automotive markets in South America
and Asia will witness a boom in the near future. The various factors such as cheap
financing and prices discounts, rising income levels and infrastructure developments
will assist in the growth and development of automotive sector in the majority of Asian
With the upcoming marketing strategies of the manufacturers, the auto parts industry is
xpected to have reached a value of USD 586 billion by year 2009. According to reports,
the compound annual growth rate of this industry is 2.6% for the period of 2004 - 2009.
|Global Auto Components Forecast
Value - USD billion 2004 - 2009
||2004 - 2009 : 2.6%
It is believed that by 2015, the global auto component industry would reach US$ 1.9 trillion.
With different low cost countries emerging at a fast pace in this industry, it is also expected
that around 40% of the money will be sourced from such countries. India is one of such low cost
countries. At present, it has only 0.4% of the global auto components trade of US$ 185 billion.
By the year 2025, it is expected that India might be among the top five auto component