Emurse

The motor vehicle is an intricate series of systems, subsystems, and components assembled into a final product. Each manufactured part or component is integrated into the vehicle; none is developed to exist separately. Vehicles are constantly changing as new technology or reengineered components are incorporated, and as new and updated models are designed in response to changing consumer preferences. Motor vehicle and parts manufacturers must continually evolve to maximize efficiency and provide products that consumers want in a highly competitive market.

Motor vehicles—passenger cars, sport utility vehicles (SUVs), pickup trucks and vans, heavy-duty trucks, buses, and other special-purpose motor vehicles ranging from limousines to garbage trucks—play a central role in our society. Most U.S. residents rely on them daily to travel to work or school, shop, or visit family and friends. Businesses depend on motor vehicles to transport people and goods. The United States is the world's largest marketplace for motor vehicles because of the size and affluence of its population. According to the U.S. Department of Transportation, almost 230 million motor vehicles—nearly 136 million automobiles, 95 million trucks, and 777,000 buses—were registered in the United States in 2003. The number of light trucks—including vans, pickup trucks, and SUVs—has shown especially steady growth since the mid- to late 1980s.

Making the vehicles we drive is only a small part of the story in the motor vehicle and parts manufacturing industry. In 2004, about 9,400 establishments manufactured motor vehicles and parts; these ranged from small parts plants with only a few workers to huge assembly plants that employ thousands. Table 1 shows that about 7 out of 10 establishments in the industry manufactured motor vehicle parts—including electrical and electronic equipment; gasoline engines and parts; brake systems; seating and interior trim; steering and suspension components; transmission and power train parts; air-conditioners; and motor vehicle stampings, such as fenders, tops, body parts, trim, and molding. Other establishments specialized in manufacturing truck trailers; motor homes; travel trailers; campers; and car, truck, and bus bodies placed on separately purchased chassis.

The motor vehicle and parts manufacturing industry in the United States has become increasingly integrated into the international economy. In fact, “domestic” vehicles often are produced using the components, manufacturing plants, and distribution methods of other nations around the world, as U.S. and foreign manufacturers of motor vehicles benefit from strategic alliances in the design, production, and distribution of vehicles and parts. Collaboration in manufacturing practices has dramatically increased productivity and improved efficiency. These cooperative practices also have resulted in manufacturers from the United States, Europe, and the Pacific Rim working closely with parts suppliers and locating production plants in the countries in which they plan to sell their vehicles, to reduce distribution time and costs. Foreign motor vehicle and parts makers with production sites in the United States are known as “domestic internationals” and account for a growing share of U.S. production and employment.

Globalization of the industry has boosted competition among U.S. motor vehicle manufacturers, prompting innovations in product design and in the manufacturing process. Manufacturers have rapidly designed and produced new models aimed at niches in the market. Firms also must be fast and flexible in implementing new production techniques, such as replacing traditional assembly lines with modern systems using computers, robots, and interchangeable platforms. Plants designed for production flexibility put resources in the right place at the right time, allowing manufacturers to shift to new models quickly and efficiently.

Motor vehicle and parts manufacturers have a major influence on other industries in the economy. As major consumers of steel, rubber, plastics, glass, and other basic materials, they create jobs in industries that produce those materials. The production of motor vehicles also spurs employment growth in other industries, including automobile and other motor vehicle dealers; automotive repair and maintenance shops; gasoline stations; highway construction companies; and automotive parts, accessories, and tire stores.