Current U.S. Automotive Industry and How it is Trending

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Executive Summary
[Date]
Description of Problem
Industry changes are commonplace in contemporary business operations. Organizations work as efficiently as possible to stay competitive and sustainable in their industries. Presently, the US automotive industry is one of the most challenging industries. With advancements in electric cars and growth into self-driving cars, the industry is poised to change fast for its key players (Wagner, 2021). Organizations that are focused on singular operational portfolios must change before they are rendered irrelevant soon.
This study intends to employ a systematic review to explore the US automotive industry with an emphasis on diversification avenues. A systematic review employs specific research questions and key search terms to seek data. The studies targeted for this review are both qualitative and quantitative. The versatile data sets will be important in understanding the empirical aspects of the automotive industry changes while also addressing prospects such as customer feelings and causes of the trends through qualitative data.
Description of the Current U.S. Automotive Industry
The US automotive industry is one of the most established and important industries in the history of the nation. The auto and auto parts stores constitute 20% of the total US sales, thereby making them the largest component of total US retail sales (Wagner, 2021). The 2020 data indicates that the automotive industry contributed 3% of the US GDP, amounting to $627 billion. The industry also employs an average of 4.1 million Americans. In 2019, 10.8 million cars and trucks were produced, while 13.7 million were sold. The production is poised to increase to 12 million per year on average by 2025 (Wagner, 2021).
The US automotive industry anchors its success on its versatile exploration of different industries. California is the top region by car sales in the US. As of 2020, California car sales were valued at $107.7 billion. That number accounted for 10.99% of the entire US car sales (Wagner, 2021). The other regions that lead in car sales include Michigan, New York, Florida, and Texas that all contributed to 38.76% of the total car sales in the US as of 2020. When analyzed by the fuel type, light trucks with gasoline-fueled internal combustion engines (ICE) were the biggest sellers in 2020. The ICEs commanded a market share of 52%. By April 2021, light trucks were still the leading in sales by type showing a 112% increase in sales compared to the previous year in the same period (Amadeo & Kelly, 2021).
Current Automotive Market Trends
The biggest trend in the US auto industry presently is the introduction of electric vehicles. Electric vehicles target buyers who need low-emission, high-performance, and fuel-efficient vehicles. The government is fueling the growth of the electric vehicle industry with its commitment to reduce greenhouse gas emissions. The electric vehicle industry was valued at $162 billion in 2019. The industry is projected to reach $802 billion by 2022 (Wagner, 2021). Low maintenance costs and the futuristic nature of electric vehicles make them more desirable, especially for the emerging technology-savvy generations.
Customer trends in the automotive industry are changing steadily. Automakers are fast adopting electric cars. While the industry is still dominated by gasoline cars, the trend should change by 2045 when more electricity is produced compared to gasoline cars. Presently, manufacturers are taking mild steps towards electric cars bearing customer demands and government regulations. More people are buying hybrid cars. In 2013, hybrid cars reached a 3.19% share in US car sales (Amadeo & Kelly, 2021). While the numbers dropped significantly from then, the hybrid cars are gaining popularity among customers considering a share of 2.4% in the 2019 sales. Bearing the trends above, customers are demanding more efficiency and comfort. Vehicles with high technological integrations such as self-driving cars, effective sensors, and communication platforms are attracting more of the younger generations.
Autos and heavy trucks are the other biggest sellers in the US within the same period. It is worth remarking that cross-over SUV cars were the biggest sellers in the US, accounting for 40% of the total sales in 2020 (Wagner, 2021). Some of the leading brands in the category include Toyota’s RAV4, Nissan’s Rogue, and Honda’s CR-V. In 2019, RAV4 was the biggest seller with a total of 450,000 units. Motor vehicle sales in the US also vary with the fuel type. Gasoline-powered cars are still the most dominant fuel type, with a market share of 7...