The global automotive industry is made up of multiple regions, largely defined by the United States and Europe. The region in which the majority of the automotive industry takes place is the North American Free Trade Agreement (NAFTA) and European Union. The second and third tiers of automakers include Japanese, Korean, and Chinese automakers, and other smaller ones are competing to become the world’s leading automaker. The automotive industry is a very large, global industry that is organized into three distinct segments: the first tier is comprised of the large multinational carmakers like GM, Ford, and Toyota, and the third tier is made up of smaller companies and regions.
With the global economy growing, private car ownership is on the rise. In 2008, only 36 per 1,000 people in China owned a car. By 2010, that number had risen to 58 per 1,000 people. In the 1990s, South Korea became a volume producer, and surpassed Japan and the US to become the fifth largest. In recent years, India has surpassed Canada, France, and Spain in car production, and is expected to overtake both the United States and Europe as the world’s top auto manufacturer.
Increasingly, the automobile industry is becoming transnational and increasingly integrated, as its market size expands. The industry also has global-scale value chain linkages, while maintaining local elements. However, the next impetus to global automotive industry growth will depend on the effectiveness of national economic policies. There are a number of reasons for this, but the most obvious one is the growing demand for unique and innovative features. The global automotive industry operates in an environment of excess production capacity and oversupply. This causes the intensity of competition and the gradual decline in profit rates.
The Asia-Pacific Research and Training Network on Trade, housed within the United Nations (ESCAP), examines the growth patterns in selected Asian countries. They also examine the role of governments. In China, the Asia-Pacific Research and Training Network on Trade examines changes in ownership structures, trade patterns, and government policies. In addition, the research network on automotive production focuses on key automotive production hubs in the region. This report is essential for any automotive industry, from the smallest manufacturer to the largest.
The COVID-19 outbreak has impacted the global automotive industry significantly. It has caused severe disruption of supply chains, slowed production, and resulted in measurable losses for many companies. In addition to the economic impact, the outbreak has affected the new product development process. The global automotive industry is in a period of growth and recovery, but a number of factors are keeping it from reaching a high-level of performance in the near future.
The BRIC countries (Brazil, Russia, India, and China) are becoming increasingly important for the global automotive industry. While Mexico and Canada should continue to be major importers, the BRIC countries are also establishing manufacturing facilities, including factories, and importing more original equipment parts. In fact, GM has begun importing V6 engines from China for the Equinox SUV. At the moment, these imports are mostly for aftermarket use, but these vehicles could become significant competitors for U.S. Southeast OEM suppliers. Moreover, fully assembled vehicles from these countries will affect these suppliers.