Auto Industry 101. Today: How big?

A growth market it is not

A growth market it is not

Due to the recent interest in disrupting the auto industry, here a short course in same. The course is bite-sized, and kept extremely simple, Auto Industry for the Twitter Generation. Those in the industry will find nothing new. Those new to the industry hopefully will find a helpful primer

The auto industry is one of the most complex and, next to pornography, one the most alluring in the world. How big is it? Statista puts the 2013 revenues of the world’s 17 largest automakers at 1.25 trillion euro, or 1.31 trillion USD. This number is skewed by the undervalued Euro. A year ago, and with a stronger Euro, the same revenue was worth 1.75 trillion USD. The global auto industry consists of some 50 players, and not of 17. Large companies such as Volkswagen, GM, or Toyota use the equity method for their China operations, China does not show up in their revenues. China is about one third of Volkswagen’s and GM’s business. It is probably a safe bet to estimate total worldwide annual auto manufacturer revenues at around 2 trillion $US. Total industry size, including ancillary businesses, such as parts, service etc., is probably twice that. That would be a generous $4 trillion, and a healthy chunk of business. However, it is not the $10 trillion that are frequently thrown around.

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