Automobile Industry and Economic Indicators

Presented by:Presented by:

Stacy Hunt, Nadege Lewis, Jessica Rodriguez, Stacy Hunt, Nadege Lewis, Jessica Rodriguez, Lina Rodriguez, Ed Simone, Esther VenturaLina Rodriguez, Ed Simone, Esther Ventura

Automobile Industry

Agenda

• Esther – Industry and the GDP• Jessica – Inflation Rates• Lina – Market Volume• Stacy – Market Value• Ed – Unemployment Rate• Nadege – Market Segmentation

Brief History

• 1885: Damier and Benz• 1893-1895: Charles E. & J. Frank

Duryea • 1800-1900: Europe• After 1900: United States• 1901: Texas’ oil

fields/Oldsmobile• 1913: Henry Ford

Gross Domestic Product (GDP)

• Millions of Vehicles

Year

6.0

10.0

14.0

8.0

12.0

16.0

2.04.0

19961998 2000 200

2

11

.8

12

.0

12

.8

12

.3

Inflation Rates

• Inflation Jumps, Car Prices Fall• The core inflation rate edged up by

0.1 in July. This price category was helped in July by a 1% drop in new car prices, the biggest decline since January 1975.

• Retail sales rose by 1.8%, the best showing in three months

• Auto sales by up 6.7%• Excluding autos, retail sales were

up a smaller 0.3% in July.

Market Volume

Year Units Million % Growth

2001 57.1

2002 57.2 0.20%

2003 58.4 2.10%

2004 60.5 3.70%

2005 63.1 4.30%

CAGR, 2001-2005: 2.6%

Increased from 2001-2005

Market Value

• What is the current state of the automobile industry’s market value?

• To what factors do we contribute their rise or fall to?

• Will we be continuing on this track in the future or is there evidence to suspect a change?

• The United States new cars market grew by 1.8% in 2004 to reach a value of $202 billion.

211

206.1

201.3

198.5

202

192

194

196

198

200

202

204

206

208

210

212

$ Bi

llion

s

2000 2001 2002 2003 2004

United States Market Value

Market Value

• The global automobiles industry grew by 5.4% in 2005 to reach a value of $1,161.2 billion.

1003.51017.1

1050.4

1101.7

1161.2

900

950

1000

1050

1100

1150

1200

$ B

illio

ns

2001 2002 2003 2004 2005

Global Market Value

Market Value

Market Value

• Research and Development

• Cleaner, safer, and more fuel efficient– E85, 85% Ethanol– Hybrid or Alternate Fuel Vehicles– Diesel and Biodiesel

• Consumer Acceptance of Higher Fuel Costs

Unemployment Rate

• The percentage of the total labor force that is unemployed but actively seeking employment and willing to work

• From 1948 to 2004, the monthly U.S. unemployment rate has ranged between about 2.5% to 10.8%, averaging 5.6%.

• Considered a lagging indicator, confirming but not foreshadowing long-term trends.

• The number of unemployed persons was essentially unchanged for the month of June.

• Unemployment rate holding steady at 4.6%

International Statistics

• Trade is important indicator of state of automotive industry

• U.S. accounts for 25.2% of international new car market

• American car brands accounted for 69% in 1986 & 35% of market share in 2005

• The only increase in American car sales came from large passenger vehicles

http://www.trade.gov/td/auto/domestic/roadahead06.pdf

1990 30.8% 30.3% 75.0%

1995 32.9% 20.7% 55.6%

2000 44.2% 10.0% 54.3%

2005 50.2% 6.5% 60.7%

http://www.trade.gov/td/auto/data/Japan.pdf

Year .

Automotive Deficit

Share of U.S.World Deficit

Share of total U.S Japan Deficit

U.S. Automotive Trade Deficit

Conclusion

• Indicators provide a glimpse into the state of the automotive industry

• Economic standings of consumers bears a strong relationship to automobile manufacturing and sales.

• Global competition greatly affects vehicle production & sales in the U.S.

Reference

• Bureau of Labor Statistics

• Datamonitor

• Trade.gov