SPT-225 Project one automotive

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Southern New Hampshire University *

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225

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Economics

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Feb 20, 2024

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Define the Problem: The US based automotive manufacturing industry has not been doing so hot since 2020 and the pandemic. Recently, Companies have been preparing for more difficult times as the Federal Reserve continues to raise interest rates due to the consistent high inflation. The high inflation has caused less spending across the board especially on more luxurious things like vehicles. The high interest rates caused for less manufacturing of cars but, in 2022 supply exceeded which lessened demand which caused manufacturing to fall off. Overall people have seemed to be buying more practical cars these days. With being environmentally aware and being more conscious of the environment all together I can see there being a bigger push and turn towards Hybrid, electric, smaller more affordable vehicles. My research will consist of both qualitative and quantitative data but mostly quantitative because it will mostly have to do with numerical based statistics and data. I will be using data from market research reports, statistics, and business journals. Provide a broad description of the US automotive manufacturing industry and its value: The US automotive manufacturing industry is an industry with many ups and downs. Over the past 5 years it has especially had its ups and downs with the pandemic and trying to adjust to people being home more and continuing to work from home. Also fuel prices have been a huge factor along with interest rates. There are three major “hubs” for the automotive manufacturing world. The first region is the great lakes region which accounts for 32.3% of locations. Some of the bigger names in the industry are there like General Motors (GM), Ford Motor Company (Ford), and Fiat Chrysler Automobiles NV, all have locations in

Michigan which make up 6.7% of the establishments alone. The second region Is the West Region which accounts for 14.6% of the industries establishments. A lot of automotive groups have joint ventures and plants in the California area making manufacturing easier. Third largest hub is the Southeast region including the US. The Southeast Region accounts for 14% of industry locations. Manufacturers like Toyota, Honda and Nissan have plants around this region. As people have overall become more health conscious and environmentally conscious the push towards electric and hybrid cars has been huge. Especially with gas prices continuing to be the way they are now. Most big players in the industry have shifted their operation focus on hybrid and compact cars. “The industry is anticipated to receive a boost in government incentives increase purchases of electric vehicles, which are likely to take up more of this industry’s products moving forward.” https://my-ibisworld-com.ezproxy.snhu.edu/us/en/industry/33611a/industry-at-a-glance#key- trends Overall the industry revenue is anticipated to grow an annualized 1.3% to $107.7 billion by 2027. Describe the current trends in the automotive market: The current trends in the US automotive market have been a push towards saving the environment and on gas. Focusing more on just getting from point A to point B without having to spend so much on gas to fuel up. There is a big push to reduce wages and Improve efficiency meaning hybrid and electric vehicles. I think going through a pandemic and realizing what’s important and what isn’t was also a big contributor to the push for electric transportation in general. People are also no longer commuting per say to work. They are working from home

and don’t necessarily need to type of vehicle they once did when they were bringing the whole neighborhood of kids to school. The vehicle demand of colors, extras and all that has gone down the concerns now are practicality and how much gas you get to the gallon. I can only see the trend continuing to lean towards more practicality than anything. People are even starting to buy more motorized scooters and bikes as a better more convenient, environmentally conscious way to get from point A to point B. https://my-ibisworld-com.ezproxy.snhu.edu/us/en/industry/33611a/about https://www.nada.org/nada/nada-data

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