Outlook for the Automobile Industry

Report Outline
Decline of Automobile Production and Registration
Motor Car Production in the Depression
Export Markets for American Motor Vehicles
The Automobile Industry After the Depression
Special Focus

Decline of Automobile Production and Registration

Export and Foreign Manufacture of American Cars

Production of passenger cars and trucks by automobile manufacturers in the United States during the first nine months of 1932 totaled only 1,157,029 units, which represented a decline of almost 46 per cent from the corresponding period of 1931. Production during the first nine months of 1931 had been 27 per cent below that for the same months of 1930. Automobile manufacture exhibited an upward trend during March, April, and May of the current year, but the renewed decline which began in June continued without interruption through September. Total production for the year 1932 is not expected to surpass 1,400,000 units, which will be the lowest output for any year since 1918, when the automobile industry, by comparison with postwar sales, was in its infancy. In the record year 1929 American factories produced 5,358,000 cars and trucks.

Motor vehicle registrations in the United States declined in 1931 for the first time in the history of the automobile. The market for new cars in that year was entirely restricted to replacement demand. While the long-forecast saturation point in motor ear ownership was thus reached, it is predicted that when a substantial expansion of the volume of the country's purchasing power has taken place, sales to new owners will be resumed, although probably not on a scale comparable with that maintained during the decade following the war. Satisfaction of a large deferred replacement demand is expected to provide the first active business for automobile manufacturers once economic recovery gets under way.

According to the 1929 Census of Manufactures, the automobile industry, with products valued at $3,723,000,000, ranked ahead of every other American industry. The separately classified motor vehicle bodies and parts industry had products valued at $1,538,000,000. The importance of their recovery to general economic recovery is further attested to by the fact that they are the largest purchasers of numerous raw materials and commodities, consuming more than half the output of several industries and using materials produced in every state. The automotive industry is therefore a large direct and indirect employer of labor, its prosperity contributing in substantial degree to general prosperity.