The Registrations of flex-fuel vehicles in United States of America attained a value of 11,577.48 Units in 2020
The indicator recorded a historical growth (CAGR) of 21% between 2017 to 2020, and is expected to decline by...
GlobalData projects the indicator to grow at a CAGR of...
Automotive Industry in the United States of America
The value of the US automotive manufacturing industry is expected to grow in 2021, recovering from the sharp decline in production a year earlier due to the COVID-19 pandemic. The industry is set to follow a strong growth trajectory during the forecast period given that the macroeconomic environment will continue to improve. The COVID-19 pandemic had a significant impact on the automotive industry in 2020. Temporary shutdowns at manufacturing plants amid labour shortages and severe disruption in the supply chain - including a shortage of semiconductors - which persisted throughout the year, resulting in the decline of production.
Rivalry within the new cars market is intensified by the existence of large-sized companies and the high fixed costs associated with car manufacturing. However, the relatively small number of large companies in the market, due to the large economies of scale required, mitigates competition. Differentiation is a fundamental aspect of competition in the new cars market, and that serves to alleviate rivalry to some extent. Buyer power is limited as individual consumers comprise the majority of final-end users. However, the negligible switching costs and buyer price-sensitivity leads manufacturers to invest significantly in brand building as strong brands can weaken buyer power.
Car manufacturers should be wary of the possibility of dealerships agreeing to sell vehicles from rival manufacturers. Car manufacturers that have long-standing contractual agreements with loyal dealerships will be better protected from this threat. However, those with short-term contracts or those where agreements are close to expiry are more vulnerable.
A relatively small number of large companies dominate the new cars market, forming an oligopolistic market structure that relieves price competition. Economies of scale, which are the most crucial aspect in automotive manufacturing, dictate that oligopolistic market structure. In fact, the market is fairly consolidated, as companies have looked to increase their market share inorganically in the face of limited growth.
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