The manufacturing sector is widely regarded as the lifeblood of the United States economy and the automotive industry is its heart.

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According to the non-profit Center for Automotive Research, the automobile industry contributes between three and 3.5% of the United States total GDP (see glossary). Over 1.7-million people are directly employed in the industry and another eight million jobs are dependent on the industry, which represents about 4.5% of private sector employment. About 20% of all retail sales in the United States are motor vehicles and parts. The United States Census Bureau’s Annual Trade Survey for 2012, which was released in March 2014, shows motor vehicle and parts have increased every year since 2009.

Estimated Motor Vehicle and Parts Dealer Sales (in US$-millions)

Kind of Business 2008 2009 2010 2011 2012
Retail sales, total 3,946,406 3,630,408 3,841,454 4,132,996 4,344,140
Retail sales, total (excl. motor vehicle and parts dealers) 3,159,327 2,956,406 3,095,334 3,314,293 3,449,342
Motor vehicle and parts dealers 787,079 674,002 746,120 818,703 894,798
Automobile dealers 650,927 554,455 624,759 690,983 761,391
New car dealers 576,614 488,278 551,948 613,642 678,789
Used car dealers 74,313 66,177 72,811 77,341 82,602
Other motor vehicle dealers 59,898 45,454 43,621 45,231 50,489
Automotive parts, access., and tire stores 76,254 74,093 77,740 82,489 82,918
Car Manufacturers rely on suppliers from around the world for a broad range of parts, components and materials. The United States Census Bureau statistics shows transportation equipment worth about $20-billion is imported every month. The automotive industry is the largest purchaser of metals, rubber, textiles, plastics and computer chips. The industry also spends about $15-billion every year on research and product development and is a huge consumer of legal, financial, advertising and healthcare services. The composition of the automotive industry has changed dramatically over the past 20 years. Toyota, Honda, Nissan and Hyundai have slowly eroded General Motors and Ford’s dominance of the automobile market in the 1960s, when their combined sales accounted for 75% of the total market. According to statistics by Wards Auto, an influential trade magazine, General Motors had 17.52% market share in 2013 and Ford had 15.70%. Yet the industry remains concentrated with over 98% of vehicle sales in the United States being made by 15 companies in 2013. Of these sales, over 68% were by the top five companies: General Motors, Ford, Toyota, Chrysler and Honda. While the domestic industry had historically been centred on Detroit, direct investments by European and Asian manufacturers have been in non-traditional locations for automotive employment. The industry now stretches in a wide band from Michigan in the north to Kentucky in the South, the home of UPS’s giant Worldport distribution centre. Working with over 18,000 automotive dealers every day as well as with thousands of aftermarket retailers, service centres and installers, UPS has developed specialised solutions for the automotive industry. UPS’s international supply chain network provides efficient cross-border trade, improving visibility and reducing order-to-delivery cycles.