u.s. market size

U.S. Market Size & Trends in the U.S. Automobile Industry

By Dr. Timothy G. NashProvost and COO

Northwood UniversityMichigan Campus

The World is Flat1. 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 DataData

Eco-nomic Area

GDP Purchas-ing Power

(2006)

GDPExchange

Rate

(2006)

GDP (real)

Growth Rate

(2006)

Unemploy-ment &

Underemployment Rate

(2006)

GDP per

Capita

(2006)

Inflation Rate

(2006)

Gross Dom.

Invest-ment

(2006)

Public Debt

%GDP

(2006)

World $65 trillion

$47 trillion

4.3% 30% (comb)

4-12% unemployment in dev. co.

$10,000 1-4% developing co., 5-60% developing co.

NA NA

U.S.A. $12.98 trillion

$13.22 trillion

3.5% 4.6% $43,500 3.7% 16.6% 64.7%

EU(25 Coun.)

$12.82 trillion

$13.62 trillion

2.8% 8.8% $29,300 2.2% 20.4% NA

Russia $1.75 trillion

$733 billion

6.6% 6.6% $12,100 9.8% 17.5% 15.6%

Brazil $1.62 trillion

$620 billion

3.1% 9.6% $8,600 4.2% 19.8% 50.2%

India $4.04 trillion

$796 billion

8.5% 7.8% $3,700 5.3% 24.8% 82%

China $10,000 trillion

$2.51 trillion

10.5% 4.4% urban

20% est. overall

$7,600 1.5% 44.3% 22.1%

Source: 2005 CIA World Fact Book

0%

20%

40%

60%

80%

100%

China India U.S.

Services

Industry

Agriculture

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

2005

% Change

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%


Net Profit Before Taxes $531,033 -5.1%


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

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


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


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


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 Profit as % of Net Worth 23.5%


Expectations for Dealership Profits

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

Percent of dealers expecting profit to:


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

New Car Dealerships

As of January 1


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%


New Vehicle Sales and Market Share By ManufacturerYear 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%


Dealerships’ total service and parts sales

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%

In billions of dollars:


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

Total of all Dealerships ($ billions)

Average per Dealership ($ millions)

Total of all Dealerships($ billions)

Average per Dealership ($ 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

2005 Annual Payroll of New Car Dealerships By State Source: NADA Industry Analysis Division

Vehicles in Operation - Scrappage by Year

YearTotal Vehicles in

Use New-Vehicle Registration Scrappage

Scrappage as a % of 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.

Avg. Finance Rate (%) Avg. Length Loan

(months)Avg. Consumer Expenditure* ($)

Median Family Income ($)

Avg. weeks of MedianFamily 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

Comerica New Vehicle Affordability Index

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


Details of U.S. Automotive Trade(All totals in billions of dollars)

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


European Union – Vehicles 6.1 31.0


Japan – Vehicles 0.5 32.9


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


Source: U.S. International Trade Commission

u.s. market size

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