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The automobile industry surged ahead worldwide in recent years, with particularly sharp growth in the U.S. and China. Estimates of the global automobile market vary substantially from one source to another. Analysts at IHS Automotive estimated the global market at 88.6 million units for 2015.
Car sales within North American markets have been running at very high rates. According to Plunkett Research estimates, U.S. car and light truck sales will total from 17.1 million to 17.4 million units for 2015, provided the economy does not slow significantly during the final quarter of the year. This would represent excellent growth from 16.5 units sold in 2014 and 15.6 million units sold in 2013. Mexico’s sales were expected to grow by as much as 20% in 2015, to 1.13 million units, while Canadian sales were expected to grow slightly to 1.86 million, according to analysts at Scotia Bank.
The biggest upward trend in auto sales has been in China. While estimates of its annual unit sales vary widely, China has clearly become the world’s largest car market. However, China’s sales are heavily subject to economic growth, the availability of credit and the regulatory environment. As of late 2015, the Chinese economy was slowing, and sales of discretionary items were down, particularly luxury items. China’s government has a great deal of control over the market, as, at any time, it may increase sales by encouraging new auto loans, or decrease sales by adding new registration fees or restricting traffic in major cities in order to reduce congestion and pollution.
One of the biggest winners by far in today’s highly competitive automobile market has been Korea, where Hyundai, along with its brand Kia, have enjoyed soaring global sales. Consumers are attracted to their reasonable prices, excellent warranties and world class manufacturing quality. 
There are approximately 260 million cars and light trucks in operation in the United States, as of 2015. Around the world, there were about 1.15 billion cars and light trucks on the road in late 2015, a number that has been growing by roughly 40 to 50 million yearly.
Most major car makers are aggressively pushing their crossover vehicles, which are an excellent compromise that offers large passenger and cargo compartments, good visibility and reasonably good gas mileage. Crossovers are essentially replacing sedans and some vans as the new family car. For the first nine months of 2015, light truck sales (including pickups, crossovers, SUVs and vans) were up 11.7% over 2014. Crossovers were the best sellers by far. 
At the same time, manufacturers are forced to continue to invest in smaller, high efficiency vehicles due to U.S. government mandates that they meet high average miles-per-gallon rules. Chrysler is relying heavily on its relationship with Fiat for new, fuel efficient models of modest size. Honda, Volkswagen, Toyota, Hyundai, Nissan and Peugeot all have invested in new, advanced small cars. All major luxury brands like Mercedes, BMW, Lexus and Audi have relatively small cars on the market and will steadily introduce a wide range of fuel efficient designs. BMW introduced its iSeries high efficiency cars in 2013, including a three-cylinder engine that is part of a new plug-in hybrid.
Engineers are pushing technological changes in their larger cars and light trucks in order to enhance their fuel efficiency. An excellent example is the launch of Ford F150 full-size pickup trucks that rely on the use of aluminum body panels and advanced engine/transmission combinations to dramatically reduce weight and improve mileage. This truck has been selling in very large numbers in the U.S., as have the Chevy Silverado and Chrysler Ram full-size pickups. Recent drops in gasoline prices have boosted this trend.
GM is betting heavily on its Chevrolet Cruze, a small sedan capable of 36 miles per gallon (mpg) on the highway and stuffed with convenience features that consumers appreciate. Ford’s revamped Fusion earned rave reviews, and it comes in either a hybrid model or a standard engine version that gets 31 mpg on the highway.
One result of frugal consumers and buyers who prefer greener goods has been strong demand for Toyota’s Prius gasoline-electric hybrid car. The company has also made investments that enable it to manufacture hybrid versions of many of its popular models, including the Camry and several models of the Lexus. Hybrids are now available from a wide variety of makers, and technology has steadily improved. Nonetheless, hybrids remain a very small fraction of the overall car and truck market due to their relatively high initial costs.
One of the most disappointing launches has been GM’s Volt, which debuted in very low production volume as a 2011 model. This car includes a gasoline-powered engine capable of charging its batteries for those occasions when it is not convenient to plug in, as well as providing a boost to acceleration when needed. Nissan offers competition in the electric vehicle sector with its all-electric model called Leaf. However, the high prices and limited range of batteries will cause many consumers to stay away from electric cars. An exception is Tesla, the U.S.-based maker of luxury, fully electric cars. Tesla’s current models are expensive, but they offer long range due to their unique battery strategy. Overall, however, the electric car market is likely to begin good growth when advanced, long-range batteries become available at much lower cost, which may take until 2020 or later. Many of the world’s top research organizations are working steadily on this challenge.
Clean diesel engines for passenger cars suffered a massive setback in September 2015, when Volkswagen was accused of designing certain of its small car diesels so that they would perform better in emissions tests than they do during actual road driving. This is not only a massive scandal and a huge potential financial liability for VW (an estimated 11 million cars had been sold worldwide that may possibly contain such engines, including about 2 million Audis), but also potentially a substantial setback, through negative consumer perceptions, for all diesel car makers. Manufacturers including BMW, Volkswagen and Mercedes-Benz have been making and selling diesel cars, particularly in Europe. Diesels accounted for 53.1% of all new cars sold in Western Europe during 2014.
Meanwhile, the use of ethanol as a gasoline additive in America has grown rapidly, whether or not it makes any environmental or economic sense, thanks to requirements enacted by Congress. However, Congress has dropped its financial subsidies to ethanol.
The rising affluence of consumers in China has been creating both huge opportunities and major problems. China has become the world’s largest user of energy overall and one of the world’s largest importers of petroleum products, partly to fuel its burgeoning fleet of cars and trucks. Streets and highways are clogged with vehicles, to the extent that traffic and smog are nightmarish. Automakers from abroad have raced to establish plants and partnerships in China. 
India has also seen significant growth in its automotive manufacturing in recent years, and its auto exports are growing. India-based Tata now owns the prestigious Jaguar and Land Rover brands.
Not to be overlooked are the vast changes taking place in automobile manufacturing plants. Flexible factories have reduced man-hours and cut costs per car, while offering a much wider range of choices for customization by consumers. The wide use of robotics, advanced factory software and lean inventory methods have completely revamped the modern car factory. Today, more than ever, car manufacturers and their suppliers are cooperating in the design and manufacture of new cars in ways that are revolutionizing the entire process. Bankruptcies at GM and Chrysler in 2009 enabled these firms to shed debt, cut employees, renegotiate contracts and dramatically reduce operating costs.
Inexpensive cars manufactured in China are now on the market in many emerging nations. The question is not whether China will export cars and trucks, but whether consumers in advanced markets such as America will be convinced that they offer safety and reliability. Meanwhile, U.S. automakers have made intense demands on their component suppliers for lower prices—these suppliers are, in turn, looking to low-cost production in China, Mexico and elsewhere.
European manufacturers are facing challenges of their own. High costs, tough labor laws and daunting government regulations are constant challenges to manufacturers there. Nonetheless, firms like Volkswagen and Daimler/Mercedes-Benz have found great success in the global market over a period of many decades, often locating plants in nations where their products sell well. 
European car makers and parts manufacturers were struggling to reduce both costs and manufacturing capacity through 2015. After very soft total unit sales from 2008 through 2013, the European market rebounded. The European Automobile Manufacturers’ Association reported that unit sales were 12.6 million vehicles in 2014, and might grow to 13 million in 2015. However, this remains well below the 2007 peak of nearly 16 million vehicles.
The thought of the next billion automobile owners is either the most intriguing or the most terrifying vision for the near future, depending on how you look at it. Despite the recent woes of the automobile industry, future global demand for cars will far outstrip former peaks, creating immense business opportunities. While incomes are rising in the developing world, the price of entry-level automobiles is dropping. Car makers are rushing to introduce their own low-cost options for buyers in China, India and elsewhere.
In its report World Economic Outlook April 2008, the International Monetary Fund showed how, under one method of analysis, the number of cars in emerging and developing economies could increase by 1.9 billion from 2005 to 2050, bringing the world’s total to nearly 3 billion automobiles. Will this actually occur? The personal income needed to acquire the cars will be there, but many other questions loom:  Will that many consumers find automobile ownership to be desirable? Will public transportation, car sharing systems, commuter trains and other alternatives to individual car ownership reduce demand for personal automobiles? Will fuel, whether gasoline, hydrogen or electricity, be affordable and readily available?  Will roads, parking and other traffic infrastructure be adequate to support car ownership on this scale? The same massive inconveniences and costs of individual car ownership that face residents of extremely dense cities such as Tokyo and Manhattan today may dampen desire.
Car sharing plans have soared in popularity. Surveys show that many young adults have little interest in owning a car of their own, which is vastly different from the attitude that was held one generation earlier. Car sharing is such a growing trend that car rental giant Avis acquired Zipcar, a pioneer in this area. Even major auto makers, like BMW with its DriveNow program, are starting their own car sharing schemes, hoping to develop strategies that are well in tune with changing consumer trends.
Car safety has made dramatic progress in recent years, mainly by adopting technologies such as backup cameras, anti-skid, advanced brakes and collision avoidance systems. Now, virtually all major car makers are working intensely on technologies that will enable cars to essentially drive themselves. By 2015, many luxury vehicles had very advanced features in this regard, but remained short of self-driving on the road. Eventually, the end result will be vehicles that communicate with each other while utilizing advanced technologies to safely stay in lanes, regulate speeds and avoid other vehicles as well as pedestrians.
Automobiles are rapidly becoming high-powered computers on wheels, as many automotive systems are now controlled by chips and software. At the same time, automakers are finding innovative ways to use the latest in wireless and smartphone technologies, including apps, to enhance the entertainment, information and communications capabilities of vehicles. Automotive “infotainment” has become such a dominant theme that Apple, as of late 2015, was pressing ahead with research and development of a new Apple automobile. If it comes to pass, the Apple vehicle will doubtless set a new standard for the linking of the latest in computers, entertainment, wireless and cars.
New traffic and safety technologies may smooth traffic flow, while highly efficient electric cars topped off by safer nuclear generation plants and concentrated solar plants may eventually turn fuel consumption and pollution into modest problems. In any event, it is reasonable to assume that the world’s economies will, over time, advance to the point that 3 billion people will desire, and be able to pay for, access to advanced transportation, whether or not that takes the form of individual automobile ownership or car sharing on a massive scale.

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