Brief Overview of the Auto Industry

Total vehicle sales in the US are scheduled to be released later today and the results are expected to show an annual pace of 13.25 million vehicles. While this is an improving number, the graph below highlights the new reality in today's US automotive industry as vehicle sales have fallen dramatically from prerecession levels that used to average roughly 17 million. To put that into context, with the average car costing $28,400 in 2010, total auto industry revenues have declined from $480 Billion plus in the mid 2000s to $376 Billion today, a loss of over $100 Billion in Revenues. In this same period of time, auto sales in China have increased from roughly 2 million vehicles in 2001 to over 19 million vehicles in 2010, an increase of roughly 28% a annually.