Market Size of Automobile Industry - PowerPoint

Document Sample
Market Size of Automobile Industry - PowerPoint Powered By Docstoc
					U.S. Market Size & Trends in the
   U.S. Automobile Industry
       By Dr. Timothy G. Nash
          Provost and COO
        Northwood University
         Michigan Campus
                      The World is Flat
1. Global Economic freedom is at an all time
   high…
2. Global Competition has increased the
   demand for skilled human capital and natural
   resources (thus wages and costs are higher).
3. Communication costs less and is better than
   ever…
4. Business barriers to entry of all kinds are
   declining in today’s global economy…
5. It is more difficult to monitor the flow of
   people, goods and services, information, etc.
Source: The World is Flat by Thomas L. Friedman
                                Key Economic Data
 Data       GDP        GDP       GDP       Unemploy-       GDP      Inflation    Gross    Public
          Purchas-   Exchange    (real)     ment &          per       Rate       Dom.      Debt
 Eco-    ing Power     Rate     Growt     Underemploy     Capita     (2006)     Invest-     %
nomic      (2006)     (2006)    h Rate     ment Rate      (2006)                 ment      GDP
 Area                           (2006)      (2006)                              (2006)
                                                                                          (2006)
World    $65         $47        4.3%      30% (comb)      $10,000 1-4%       NA           NA
         trillion    trillion             4-12%                   developing
                                          unemployment            co., 5-60%
                                          in dev. co.             developing
                                                                  co.
U.S.A.   $12.98      $13.22     3.5%      4.6%            $43,500 3.7%          16.6%     64.7%
         trillion    trillion
EU       $12.82      $13.62     2.8%      8.8%            $29,300 2.2%          20.4%     NA
(25      trillion    trillion
Coun.)
Russia   $1.75       $733       6.6%      6.6%            $12,100 9.8%          17.5%     15.6%
         trillion    billion
Brazil   $1.62       $620       3.1%      9.6%            $8,600    4.2%        19.8%     50.2%
         trillion    billion
India    $4.04       $796       8.5%      7.8%            $3,700    5.3%        24.8%     82%
         trillion    billion
China    $10,000     $2.51      10.5%     4.4% urban       $7,600   1.5%        44.3%     22.1%
         trillion    trillion             20% est. overall
Employment by Sector
A More Educated America
Education Pays Huge Lifetime Dividends
Major expenses for the average dealership in 2005



    Payroll                             $2,400,000

    Advertising                             $360,225

    Rent and equivalent                     $318,000



  Source: NADA Industry Analysis Division
                                    Average Dealership Profile
                                                                        % Change
                                                      2005              2004-2005

        Total Dealership Sales                          $32,318,461                 -2.1%

        Total Dealership Gross                           $4,307,479                 -1.3%

           As % of Total Sales                                 13.3%

        Total Dealership Expense                         $3,776,446                 -0.7%

           As % of Total Sales                                 11.7%

        Net Prof it Bef ore Taxes                            $531,033               -5.1%

           As % of Total Sales                                  1.6%

        Net Pretax Prof it in Constant 1982 Dollars          $288,605               -5.1.%


        New Vehicle Department Sales                    $19,469,000                 -3.2%

           As % of Total Sales                                 60.2%

        Used Vehicle Department Sales                    $9,067,128                 -0.6%

           As % of Total Sales                                 28.1%

        Service and Parts Sales                          $3,782,334                 -0.5%

           As % of Total Sales                                 11.7%

        New Vehicle Average Selling Price                     $28,381                1.1%

        Used Vehicle Average Selling Price                    $14,923                4.7%


        Average Net Worth (as of 12/31)                  $2,258,753                 -1.9%

        Net Prof it as % of Net Worth                          23.5%



Source: NADA Industry Analysis Division
         Expectations for Dealership Profits
Percent of dealers expecting profit to:
                            Increase             Not Change     Decline          Index Value
April 1993                          54.8%              38.8%              6.5%             158
April 1994                                67.8           29.1              3.1             180
April 1995                                32.2           46.1             21.6             112
April 1996                                54.1           35.0             11.0             154
April 1997                                42.4           44.0             13.6             135
April 1998                                41.9           43.3             14.8             134
April 1999                                56.5           37.8              5.7             164
April 2000                                49.0           39.9             11.1             149
April 2001                                31.5           40.7             27.8             107
March 2002                                53.2           36.7             10.1             153
March 2003                                13.5           46.2             40.2             133
March 2004                                 7.8           31.7             60.4             163
March 2005                                 9.4           39.6             51.1             151
March 2006                                15.9           41.4             42.7             134

Source: NADA Industry Analysis Division
New Car Dealerships
   As of January 1
    1985         24,725
    1986         24,825
    1987         25,150
    1988         25,025
    1989         25,000
    1990         24,825
    1991         24,200
    1992         23,500
    1993         22,950
    1994         22,850
    1995         22,800
    1996         22,750
    1997         22,700
    1998         22,600
    1999         22,400
    2000         22,250
    2001         22,150
    2002         21,800
    2003         21,725
    2004         21,650
    2005         21,640
    2006         21,495   Source: NADA Industry Analysis Division
               New Vehicle Sales By Month



                    2005        2005 SAAR*        2004       2004 SAAR*      % Change
                   Actual       (in millions)     Actual     (in millions)   2004-2005


 Full Year      16,945,000           16.9       16,866,500       16.9          0.5%




Source: NADA Industry Analysis Division
       New Vehicle Sales and Market Share By Manufacturer
Year        DaimlerChrysler       Ford    General Motors     Toyota      Honda       Nissan    Volkswagen   Other Imports       Total

1995              2,164,300   3,801,000        4,841,600   1,083,400    794,600     770,300       106,600       1,166,300   14,728,000

                    14.70%      25.81%           32.87%       7.36%       5.40%       5.23%         0.72%          7.92%

1996              2,450,800   3,843,400        4,743,600   1,159,700    843,900     749,800       163,300       1,142,700   15,097,200

                    16.23%      25.46%           31.42%       7.68%       5.59%       4.97%         1.08%          7.57%

1997              2,303,800   3,807,100        4,734,100   1,230,100    940,400     728,400       172,000       1,214,400   15,130,200

                    15.23%      25.16%           31.29%       8.13%       6.22%       4.81%         1.14%          8.03%

1998              2,510,000   3,860,200        4,570,100   1,361,000   1,009,600    621,600       267,200       1,342,300   15,541,900

                    16.15%      24.84%           29.41%       8.76%       6.50%       4.00%         1.72%          8.64%

1999              2,638,600   4,115,600        4,974,600   1,475,400   1,076,900    677,900       381,500       1,555,300   16,895,800

                    15.62%      24.36%           29.44%       8.73%       6.37%       4.01%         2.26%          9.21%

2000              2,522,700   4,147,700        4,911,700   1,619,200   1,158,900    752,800       435,900       1,800,800   17,349,700

                    14.54%      23.91%           28.31%       9.33%       6.68%       4.34%         2.51%         10.38%

2001              2,273,200   3,915,500        4,852,500   1,741,300   1,207,600    703,700       438,900       1,989,200   17,121,900

                    13.28%      22.87%           28.34%      10.17%       7.05%       4.11%         2.56%         11.62%

2002              2,205,450   3,576,250        4,815,150   1,756,150   1,247,850    739,850       423,850       2,052,950   16,817,500

                    13.11%      21.27%           28.63%      10.44%       7.42%       4.40%         2.52%         12.21%

2003              2,127,450   3,437,700        4,716,050   1,866,300   1,349,850    794,800       389,100       1,953,450   16,634,700

                    12.79%      20.67%           28.35%      11.22%       8.11%       4.78%         2.34%         11.74%

2004              2,206,000   3,271,100        4,657,400   2,060,050   1,394,400    855,000       334,050       2,088,500   16,866,500

                    13.08%      19.39%           27.61%      12.21%       8.27%         5.07        1.98%         12.38%

2005              2,304,900   3,106,900        4,456,800   2,260,300   1,462,500   1,076,900      307,250       1,969,450   16,945,000

                    13.60%      18.34%           26.30%      13.34%       8.63%       6.36%         1.81%         11.62%

Average           2,337,018   3,716,586        4,752,145   1,601,173   1,135,136    770,095       310,877       1,661,395   16,284,400

1992-2002           14.35%      22.82%           29.18%       9.83%       6.97%       4.73%         1.91%         10.20%


Source: NADA Industry Analysis Division
Dealerships’ total service and parts sales
            In billions of dollars:
                                          Amount      % Change
            1995                             $56.57         2.6%
            1996                             $60.76         7.4%
            1997                             $62.93         3.6%
            1998                             $63.56         1.0%
            1999                             $67.66         6.5%
            2000                             $73.83         9.1%
            2001                             $80.10         8.5%
            2002                             $83.11         3.8%
            2003                             $85.35         2.7%
            2004                             $85.48         0.2%
            2005                             $85.16         -0.4%

Source: NADA Industry Analysis Division
    Estimated number of new-car dealership employees in 2005
                Source: NADA Industry Analysis Division




              Total of all Dealers      Average number per Dealership
Total U.S.:      1,138,000                          53


     Average Weekly Earnings Per Dealership Employee: $870
                2005 Annual Payroll of New Car Dealerships By State
                                                  Source: NADA Industry Analysis Division
                Total of all Dealerships     Average per Dealership                         Total of all Dealerships     Average per Dealership
                              ($ billions)               ($ millions)                                     ($ billions)               ($ millions)

Alabama                            $0.60                       $1.87       Montana                             $0.15                       $1.13
Alaska                               0.11                       2.73       Nebraska                              0.27                       1.26
Arizona                              1.33                       5.22       Nevada                                0.57                       5.07
Arkansas                             0.34                       1.26       New Hampshire                         0.33                       1.92

California                           7.03                       4.24       New Jersey                            1.76                       2.91

Colorado                             0.86                       3.05       New Mexico                            0.30                       2.22

Connecticut                          0.79                       2.37       New York                              2.43                       2.04

Delaware                             0.18                       2.87       North Carolina                        1.44                       2.05

D.C.                                 0.00                       1.47       North Dakota                          0.12                       1.16

Florida                              3.58                       3.74       Ohio                                  1.79                       1.81

Georgia                              1.56                       2.53       Oklahoma                              0.68                       2.29

Hawaii                               0.24                       3.39       Oregon                                0.62                       2.26

Idaho                                0.23                       1.84       Pennsylvania                          2.18                       1.78

Illinois                             2.06                       2.06       Rhode Island                          0.16                       2.30

Indiana                              0.92                       1.68       South Carolina                        0.62                       1.86

Iowa                                 0.48                       1.21       South Dakota                          0.14                       1.14

Kansas                               0.42                       1.53       Tennessee                             1.00                       2.33

Kentucky                             0.53                       1.69       Texas                                 4.09                       2.99

Louisiana                            0.72                       2.09       Utah                                  0.37                       2.43

Maine                                0.22                       1.41       Vermont                               0.12                       1.17

Maryland                             1.16                       3.12       Virginia                              1.50                       2.71

Massachusetts                        1.23                       2.30       Washington                            1.08                       2.76

Michigan                             1.81                       2.35       West Virginia                         0.22                       1.26

Minnesota                            0.84                       1.83       Wisconsin                             0.87                       1.40

Mississippi                          0.35                       1.43       Wyoming                               0.09                       1.27

Missouri                             0.95                       1.87       Total U.S.                         $51.51                       $2.40
Vehicles in Operation - Scrappage by Year
         Total Vehicles in   New-Vehicle                 Scrappage as a % of
Year                  Use    Registration   Scrappage         Registrations
1995          193,440,393     15,058,699    10,332,303                 68.6

1996          198,293,459     15,663,707    10,810,641                 69.0

1997          201,070,397     15,285,529    12,508,591                 81.8

1998          205,042,639     15,637,540    11,665,298                 74.6

1999          209,509,161     16,130,124    11,663,602                 72.3

2000          213,299,313     18,088,911    14,298,759                 79.0

2001          216,682,936     17,505,343    14,121,720                 80.7

2002          221,027,121     17,639,934    13,295,749                 75.4

2003          225,882,103     16,939,662    12,084,680                 71.3

2005          231,398,281     17,419,471    11,903,293                 68.3

2006          238,697,097     16,690,280     9,988,864                 59.8

Source: The Polk Co.
                             Comerica New Vehicle Affordability Index
                                           Avg. Length Loan       Avg. Consumer      Median Family            Avg. weeks of Median
                   Avg. Finance Rate (%)           (months)       Expenditure* ($)      Income ($)         Family Income to Buy Car*

1999Q1                              7.38               52.8                22,121           54,423                              24.6

1999Q2                              7.43               52.5                22,262           55,054                              24.5

1999Q3                              7.45               51.9                22,357           55,759                              24.4

1999Q4                              7.96               53.5                22,437           56,618                              24.3

2000Q1                              7.98               52.9                22,038           57,796                              23.3

2000Q2                              7.82               54.3                22,403           58,987                              22.9

2000Q3                              8.34               55.7                22,084           59,777                              23.1

2000Q4                              7.75               56.7                23,000           60,763                              23.2

2001Q1                              8.13               55.1                22,872           61,626                              26.3

2001Q2                              7.58               56.8                23,434           61,100                              26.5

2001Q3                              7.16               57.4                23,584           61,503                              26.5

2001Q4                              5.42               51.1                22,675           61,504                              23.8

2002Q1                              6.41               53.9                25,250           62,833                              25.5

2002Q2                              6.86               57.3                25,527           63,625                              26.1

2002Q3                              4.34               58.9                24,537           64,185                              24.4

2002Q4                              4.44               57.3                24,936           64,185                              25.0

2003Q1                              3.65               59.1                25,486           66,264                              24.6

2003Q2                              2.61               61.1                25,733           66,906                              24.1

2003Q3                              3.55               63.0                26,949           64,663                              24.8

2003Q4                              3.80               62.5                27,139           65,982                              25.1

2004Q1                              3.24               59.7                26,909           68,469                              24.6

2004Q2                              3.65               60.2                27,126          69,,582                              24.6

2004Q3                              5.54               60.9                25,529           68,380                              25.3

2004Q4                              5.01               61.3                25,988           70,205                              25.0

2005Q1                              4.86               59.3                26,054           70,275                              24.8

2005Q2                              5.18               59.5                26,315           70,974                              24.7

2005Q3                              5.80               60.2                28,105           70,690

2005Q4                              5.97               61.1                29,200           70,337

Source: Comerica Bank (compiled from Commerce Department and Federal Reserve data                    * With Possible Rebates
         Wired Dealerships in 2005

“98% of all U.S. Automobile Dealerships
  have web pages and use the internet to
 influence dealership traffic and/or sales.”



Source: Wards Automotive
Motor Vehicle Sales in China
                                         2005
 Select Manufacturers          Numbers          Percent
      GM-Shanghai
 GM-SAIC/Wuling-Trucks
 GM-SAIC/Wuling-Buses
        GM-TOTAL                  665            11.2
   VW-First Auto Works            277
      VW-Shanghai                 287
         VW-Total                 564             9.5
    Honda-Guangzhou               256             4.3
     Hyundai-Beijing              234             3.9
          Cherry                  190             3.2
       Toyota-FAW
       Toyota-Total               179             3.0
           Ford                   200             3.4
        FAW-XIALI                 180             3.0
         NISSAN*                  166             2.8
         GEELY*                   140             2.4
          TOTAL                  5,920          100.00

             Source: NADA Industry Analysis Division
Details of U.S. Automotive Trade
         (All totals in billions of dollars)
         Source: U.S. International Trade Commission

                                              2004
    Trading Partners               Exports             Imports
   Canada – Vehicles                 18.4               46.5
       - Auto Parts                  29.9               19.2
    Mexico – Vehicles                 4.1               19.1
       -Auto Parts                   11.3               21.4
     NAFTA Totals:
       -Vehicles                     22.5               65.6
      -Auto Parts                    41.2               40.6
European Union – Vehicles             6.1               31.0
       -Auto Parts                    4.6               10.9
    Japan – Vehicles                  0.5               32.9
       -Auto Parts                    1.5               15.4
    Korea – Vehicles                  0.1               10.0
       -Auto Parts                    0.5                1.9
    China – Vehicles                  0.1                0.1
       -Auto Parts                    0.6                3.8
    World – Vehicles                 34.6               141.8
      -Auto Parts                    52.6               80.4

				
DOCUMENT INFO
Description: Market Size of Automobile Industry document sample