Automobile Production, Selected Countries, 1950-2021

Automobile Production, Selected Countries, 1950-2021

Source: International Organization of Motor Vehicle Manufacturers.

The second half of the 20th century has seen a major shift in car production. In 1950, the United States accounted for more than 80% of the global car production, excluding commercial vehicle production. However, this share declined to about 4.6% in 2010 and 2.7% in 2021, reflecting a loss of competitiveness in the American car manufacturing system. The United States, even if it represents the largest car market in the world, has been thoroughly motorized. This implies that the American market is mainly one of replacement with acute competition between manufacturers for market share. Roughly the same number of cars was produced in the United States during the 1990s as during the 1950s.

In the 1960s, two major players in the car industry emerged; Japan and Germany. By 1990, they accounted for 27.4% and 12.7% of the global car production. However, like the United States, the market share of Japan and Germany declined to 11.6% and 5.4% of the global car production in 2021. This underlines that a growing share of car manufacturing is taking place in newly industrialized economies. However, the main consumption market remains in the developed world, and production is controlled by American, Japanese, and German car manufacturers. Car manufacturing in China has experienced spectacular growth, reaching 37.5% of the global production in 2021. Still, the United States remains the largest producer of commercial vehicles such as trucks and vans.

The financial crisis of 2008 had a substantial impact on global car production, with production in the United States, Japan and Germany plummeting. However, production recovered afterward, in part of latent demand in some advanced economies (consumers often postpone purchasing a vehicle during a recession). Still, North America, Western Europe, and Japan are replacement markets, implying that the majority of car sales are for people replacing their existing cars. Between 2005 and 2021, China has been the most important driver of the growth in global car production, accounting for 26.3% of the additional car production. This is indicative of the fast motorization of the economy and rapid highway construction. Still, since 2017, global car production has been in a steep decline, partly attributed to the peaking of motorization in China and the manufacturing lockdowns imposed during the Covid-19 pandemic in 2020 and 2021.