Economics of the Automotive Industry

McManus, W. 2006. State of the Auto Industry 2005.
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The state of the U.S. automotive industry at the beginning of 2006 is highly mixed. A set of very positive trends is making the overall industry appear healthy. At the same time some negative trends are exposing troubling weaknesses in some industry participants. The future is more uncertain now than at any time in the last 10 to 15 years. This white paper is a summary of the trends and issues that influenced the industry in 2005 and continue to influence it in 2006 and beyond, with enough historical background to provide some perspective. The opportunities some face are exciting. The challenges some face are daunting. It is the best of times. It is the worst of times. By way of introduction, here are some of the contradictory trends and some comments on them.