Friday, September 29, 2023

The automotive sector, the pillar of the US economy

With nearly 10 million jobs, the auto sector is a major player in the U.S. economy that is at risk of suffering the effects of the strike by workers at the three largest manufacturers that began Friday.

“The automotive ecosystem generates $1 trillion annually for the U.S. economy, or nearly 5% of gross domestic product,” the Alliance for Automotive Innovation says on its website, noting that the sector will directly account for more than 9,000 by the end of 2022. 67 million people will be employed.

Citing a study by S&P Global Mobility, Allianz states that 13.5 million new vehicles will be sold in the country in 2022.

That year, the sector exported $96.6 billion and imported a total of $282 billion, bringing $126.2 billion into federal coffers.

The country has a vehicle fleet of 284 million registered vehicles, including 100.61 million passenger cars, 103.26 million minivans, 59 million pickup trucks and 15.73 million vans.

Combustion/hybrid engines remain the majority at 280.87 million, ahead of 2.14 million electric vehicles (EV).

This industry is benefiting from the growth of the manufacturer Tesla, which produced 1.36 million electric vehicles worldwide in 2022 (+47%). Sales reached $81.5 billion (+51%), and net profit doubled to $12.6 billion.

According to Kelley Blue Book, a subsidiary of Cox Automotive, the average price of a new car in July 2023 was $48,334 (+2.7% year-to-date). For electric vehicles, the price continued to fall until it reached $53,469 in July (US$61,000 in January).

According to the Center for Automotive Research (CAR), investments in electric switching totaled $109.1 billion between 2018 and 2023.

According to the US Bureau of Statistics, the average hourly wage in the manufacturing sector was $27.99 in August 2023, with an average weekly work of 44.3 hours.

The AAPC association, which represents the three major historic manufacturers General Motors, Ford and Stellantis, also called the “Big Three,” says they alone account for 3% of GDP. It presents the automobile industry as the largest manufacturing sector in the country.

These three groups, with roots in Detroit, Michigan, operate 60% of the country’s assembly plants. They have announced more than $34 billion in investments over the past six years.

Since this Friday, the three have been the subject of a historic strike, the “major risk of which, if extended, is a deterioration in the supply chain and the financial health of suppliers,” commented Garrett Nelson, CFRA analyst.

General Motors employs 92,000 people in the United States, according to its website. $10.9 billion in taxable wages were paid.

The company has 120 locations, just over 4,000 dealers and more than 5,700 suppliers, on which it will spend $39 billion in 2022.

GM delivered 2.27 million Chevrolet, Buick, GMC and Cadillac vehicles in the USA in 2022.

In 2022, revenue rose 23% to $157 billion and net income fell 1% to $9.9 billion.

Founded 120 years ago, Ford employs about 177,000 people, including 86,000 in the United States, and is the largest American automobile exporter.

The Ford brands – particularly the F-150 pickup, which has been the best-selling vehicle in the country for decades – and Lincoln are manufactured. Nearly 80% of its vehicles are assembled in the United States.

Net profit reached $17.9 billion in 2022.

Stellantis, the French-Italian-American group, produces 14 brands including Ram Trucks, Jeep, Chrysler, Dodge, Peugeot, Alfa Romeo, Maserati, Opel, Peugeot and Fiat. The company is present in more than 30 countries and sells its production in more than 130 markets.

The company, created from the merger of Fiat-Chrysler and France’s PSA in 2021, employs 264,000 people worldwide.

In 2022, the company recorded a second year of record profits with a net profit of 16.8 billion euros.

According to Autos Drive America, which represents foreign manufacturers, they produced 4.4 million vehicles in the United States in 2022.

According to a 2022 study by Ernst and Young, their production volume has increased by more than 85% over the past 25 years and they have invested more than $100 billion over six decades.

Its share of production in the United States increased from 1% in 1979 to 45% in 2022.

The brands BMW, Kia, Honda, Lexus, Infinity, Mercedes, Mazda, Nissan, Toyota, Volvo, Volkswagen, Subaru, Hyundai, Acura have factories in the United States.

Its 65 models manufactured on American soil are exported to more than 130 countries worldwide (695,000 vehicles exported in 2022).

In 2022 they directly employed 156,000 people.

Nation World News Desk
Nation World News Desk
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