Passenger vehicles in the United States

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The United States is home to the largest passenger vehicle market of any country, which is a consequence of the fact that it has one of the largest Gross Domestic Products of any country in the world. Overall there were an estimated 243,023,485 registered passenger vehicles in the United States in the year 2004. Since 1960 this number has increased steadily, along with the average age of vehicles, indicating a growing number of vehicles per capita. The United States is also home to three of the world's largest vehicle manufacturers which are commonly referred to as the "Big Three." Overall the motor car has become an integral part of American life with vehicles outnumbering licensed drivers.

Contents

Statistics

The United States department of Transportation's Federal Highway Administration as well as the National Automobile Dealers Association have published data in regards to the total number of vehicles, growth trends, and ratios between licensed drivers, the general population and the ever increasing number of vehicles on American roads. Overall passenger vehicles have been outnumbering licensed drivers since 1972 at an ever increasing rate, while light trucks and vehicles manufactured by foreign marques have gained a larger share of the automotive market in the United States.

Total number of vehicles

According to the US Bureau of Transit Statistics there are 243,023,485 registered passenger vehicles in the US. Out of these roughly 243 million vehicles, 136,430,651 (56.13%) were classified as cars, while 91,845,327 (37.79%) were classified as "Other 2 axle, 4 tire vehicles," presumably SUVs and pick-up trucks. Yet another 6,161,028 (2.53%) were classified as vehicles with 2 axles and 6 tires and 2,010,335 (0.82%) were classified as "Truck, combination." There were approximately 5,780,870 motorcycles in the US in 2004, which accounts for 2.37% of all registered passenger vehicles.

According to cumulative data by the Federal Highway Administration (FHA) the number of motor vehicles has also increased steadily since 1960, only stagnating once in 1997 and declining from 1990 to 1991. Otherwise the number of motor vehicles has been rising by an estimated 3.69 million each year since 1960 with the largest annual growth between 1998 and 1999 as well as between 2000 and 2001 when the number of motor vehicles in the United States increased by eight million.^{[#endnote_FHAdrivers]} Since the study by the FHA the number of vehicles has increased by approximately eleven million, one of the largest recorded increases. The largest percentage increase was between the years of 1972 and 1973 when the number of cars increased by 5.88%.

Vehicle and population ratios since 1960

2.72
Year	Population	Drivers	Motor vehicles	Increase in vehicles	% Growth
1960	180	87	74	N/A	N/A
1961	183	89	76	2
1962	186	91	79	2
1963	188	94	83	3
1964	191	95	86	3
1965	194	99	90	4
1966	196	101	94	4
1967	197	103	97	3
1968	199	105	101	4
1969	201	108	105	4
1970	204	112	108	3
1971	207	114	113	5
1972	209	118	119	6
1973	211	122	126	7
1974	213	125	130	4
1975	215	130	133	3
1976	218	134	139	6
1977	220	138	142	3
1978	222	141	148	6
1979	225	143	152	4
1980	227	145	156	4
1981	230	147	158	2
1982	232	150	160	2
1983	234	154	164	4
1984	236	155	166	2
1985	239	157	172	6
1986	241	159	176	4
1987	243	161	179	3
1988	246	163	184	5
1989	248	166	187	3
1990	248	167	189	2
1991	252	169	188
1992	255	173	190	2
1993	258	173	194	4
1994	260	175	198	4
1995	263	177	202	4
1996	265	180	206	4
1997	268	183	208	4
1998	270	185	208	0
1999	273	187	216	8
2000	281	191	218	2
2001	281	191	226	8
2002	288	195	230	4
2003	291	196	231	1
All numbers in millions; SOURCE: US Departement of Transportation

Since 1960 the number of passenger vehicles has risen farther and farther and since 1972 has outgrown the number of licensed drivers. Considering the population in the United States of 293,655,404 in the year 2004, there is one passenger vehicles for every 1.20 persons in the United States, meaning that there are 833.34 passenger vehicles for every 1,000 Americans. According to the Federal Highway Administration there were an estimated 196 million licensed drivers in the United States in the year 2003. Considering the slightly lower number of motor vehicles for 2003 there were an estimated 1.17 motor vehicles per licensed driver, meaning that there are more vehicles than drivers in the US, with vehicles outnumbering drivers 1.2 to one.

Since 1960 in the US has risen by 157 million (212.16%), while the population of licensed drivers grew by 109 million (125.28%). The trend vehicles outnumbering the population of licensed drivers can be dated back to 1972. Between 1971 and 1972 the number of motor vehicles in the US increased by four million, a record at the time. Since then the gap between the number of cars and driver has continuously risen. While in 1972 there were only one million more motor vehicles than drivers, cars outnumber drivers by thirty-five million in 2003. This means that while there were 0.84% more motor vehicles than drivers in 1972, there are now 17.85% more vehicles than drivers.

Age of vehicles in operation

In the year 2001 National Automobile Dealers Association conducted a study revealing the average age of vehicles in operation in the US. The study found that of vehicles in operation in the US 38.3% were older than ten years, 22.3% were between seven and ten years old, 25.8% were between three and six years old and 13.5% were less than two years old. According to this study the majority of vehicles, 60.6% of vehicles were older than seven years in 2001. This relatively high age of automobiles in the US might be explained through gradually declining sales figures since 1998.

The median and mean age of automobiles has steadily increased since 1969. In 2005 the overall median age for automobiles was 8.9 years, a significant increase over 1990 when the median age of vehicles in operation in the US was 6.5 years and 1969 when the mean age for automobiles was 5.1 years. Of all body styles, pick-up trucks had the highest mean age (9.4 years), followed by cars with a mean age of 8.4 years and van with a mean age of 7.0 years. As SUVs are part of a relatively new consumer trend originating mostly in the 1990s, SUVs had the lowest mean age of any body style in the US (6.1 years). The average recreational vehicle was even older with a mean age of 12.5. The mean age has increased continuously for all body styles from 1969 to 2005.

Sales

In the year 2004, 7,505,932 passengers cars were sold in the United States according to the US Department of Transportation. This figure " Includes domestic and imported vehicles." (Department of Transportation) The number of vehicles sold in the US has been decreasing at a gradual yet continuous rate since 1999, when nearly 8.7 million vehicles were sold in the US. Looking back at history however, reveals that such decline is only part of normal market trends and most likely only a temporary affair. Overall 1985 was a record year with cars sales totaling just over eleven million. While imports have gaining ground in terms of units sold during the 2000s and have regained roughly the same market share they held in 1992, the sales of domestic vehicles are still more than double those of imported vehicles. It should be noted however that the US Bureau of Transportation Statistics "Includes cars produced in Canada and Mexico" as domestic vehicles as both countries are part of the North American Free Trade Agreement (NAFTA). In 2004 the sales of vehicles made in NAFTA states totaled 5,4 million, while the sale of imported vehicles totaled 2.1 million. 798,000 vehicles were imported from Japan, making it the greatest importer of vehicles into the US. Germany was the second largest importer of vehicles into the US, with 542,000 units imported in 2004. Imports from all other nations, except Germany and Japan, totaled 809,000.

Pricing

In July 2004, Edmunds.com published a report stating that the average sticker price on a vehicle sold in the United States was $29,746. In the US passenger vehicles are, however, commonly sold at considerable discounts and customers rarely ever pay the sticker price or MSRP (Manufacturer's Suggested Retail Price). The discount is commonly determined by the company's marketing strategies and tends to be larger the slower selling a vehicle is. Due to what many American consumers have perceived as a declining quality among the automobiles manufactured by the "Big Three" throughout the 1980s and early 1990s, discounts tend to be larger on domestic vehicles. In 2003 the average discount on a domestic vehicle was 20.6% below MSRP. For Japanese and Korean vehicles the average discount was 10% and 12.8%. The lowest discounts were given on vehicles from European manufacturers, where the average discount was 7.7% below MSRP. Overall the average discount in July 2004 was $4,982 (16.8%), meaning that while the average MSRP was almost $30,000, the average buyer of a new car paid only $24,764. Dr. Jane Liu, the Vice President of Data Analysis for Edmunds.com further stated that, "New models are being introduced at higher price points, but the competitiveness of the market is dramatically pushing down net prices, resulting in a record average discount." The lowest discounts among all car segments were given on luxury SUVs, where buyers received an average 10% discount, resulting in a $43,725 net price, versus the sticker price of $48,586.

Fuel economy

The American automobile industry became notorious for the manufacture of gas guzzlers during the 1960s and 1970s when fuel prices and consumer awareness concerning fuel economy were at an all-time low. In the 1960s and 1970s American made cars took on enormous proportions as consumers placed their emphasis on comfort, power and style. Large sedans from this era came to be known as Landyachts, often rivaling today's largest pick-up trucks in terms of length and width. In 1977, the Lincoln Continental Mark V was reviewed by the German automobile magazine, Autobild and still holds the record for the worst fuel economy of any vehicle ever tested by the magazine with an average of seven miles for the gallon.

Following the oil crisis of the early 1970s, however, smaller vehicles, often imported from Japan, became more and more popular with the American public as these vehicles featured better fuel economy ratings. In the late 1970s the US government passed minimum fuel economy standards and in the 1980s American automobile manufacturers drastically downsized their cars, only a few vehicles such as those using the Ford Panther platform retained their over-sized glory. The downsizing did, however, backfire in some cases. After downsizing the entire Cadillac line-up in the late 1980s, General Motors scrambled to save its most prestigious marques. Many American manufacturers again increased the size of their vehicles in the 1990s, while better technology allowed for better fuel economy ratings among sedans.

According to the United States Department of Transportation the average motor vehicle, including light trucks, in the US had a fuel economy rating of 17.1 miles a gallon or 13.8 liters per 100 kilometers. The average fuel economy for passenger vehicles in the United States has remained stagnant throughout the 1990s and 2000s, peaking in 1998 and 2001. Overall the past decade has seen the slowest increase in fuel economy since 1960, with fuel economy increasing from 16.4 miles a gallon in 1990 to 17.1 miles a gallon today. This is in contrast to the 1980s when the average fuel economy improved somewhat more significantly from 13.3 miles a gallon in 1980 to 16.4 miles a gallon in 1990. The lackluster increase in fuel economy during the 1990s is most likely due to the rising popularity of Sport Utility Vehicles or SUV's, whose status as light trucks gains them exception from the fuel economy restrictions placed on sedans and other cars. According to the Sierra Club "In 1997 all three US automakers violated CAFE standards for light trucks." The Sierra Club is one of many environmental organizations who warn of the bad fuel economy of SUV and hold these vehicles largely responsible for the low average fuel economy of vehicles in the United States.

Average fuel economy in miles per gallon according to the US Department of Transportation.
MPG 1960 1965 1970 1975 1980 1985 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
12.4 12.5 12.0 12.2 13.3 14.6 16.4 16.9 16.9 16.7 16.7 16.8 16.9 17.0 16.9 16.7 16.9 17.1 16.9 17.0 17.1

Body style and size

Mainstream mid-size sedans such as the Toyota Camry or Ford Taurus are often perceived to be the typical and most common body style in the United States. While mid-size sedans are indeed among the country's best selling vehicles, pick-up trucks and SUV's currently hold the top positions are rivaling sedans in the terms of total numbers sold. In the year 2000 the best selling models were the Ford F-150 with 876,716 units sold, Chevrolet Silverado with 645,150 units sold, and the Ford Explorer with 445,157 units sold. The Toyota Camry, Honda Accord, and Ford Taurus held the next three top positions as the best selling cars.

Manufacturing

The US was the largest producer of vehicles in the world for 2003, followed by Japan and Germany. While most vehicles sold in the US were manufactured by the Big Three, foreign corporations such as Japan's Toyota Motor Company have starting manufacturing in the US and are now an integrated part of the American automobile industry. According to many sources the extended US operations of foreign based companies are now rivaling those of American automobile manufacturers. Toyota Motor Company for example now operates twelve manufacturing plants in the US, producing 1.55 million vehicles, 61.66% of the roughly 2.5 million vehicles the company sells in the US each year.

Overall a wide variety of vehicles is manufactured in the United States from minis to full-size luxury vehicles. The American automobile industry itself is probably best known for the manufacture of large cars, leading to the common public perception of American cars being larger than those from other countries and making the US well known for the production of so called, Landyachts. Currently light trucks (including SUVs) of all sizes and full-sized sedans constitute the majority of vehicles made by workers of the United Auto Workers union (UAW). The Lincoln Town Car is currently the most expensive and largest car made in the US by an American manufacturer , while the Cadillac Escalade ESV Platinum is the most expensive SUV (This title used to held by the Hummer H1 until it was cancelled in May 2006). The overall largest passenger vehicle currently produced in the United States is the Dodge Ram Extended Cab.

Domestic vehicles

While the denotation of domestic vehicle includes all vehicles made in the United States, the term "Domestic vehicle" in the United States is usually only applied to vehicles made by the "Big Three" and their traditional marques. The term domestic vehicle does not include vehicles sold under marques who used to be headquartered outside the United States and are now owned by the Ford Motor Company or General Motors. Vehicles such as those sold under the marques Volvo and Land Rover, both owned by Ford are therefore still considered to be imports. Ironically vehicles made outside the US by the traditional marques of the "Big Three" are considered to be domestic vehicles, while vehicles made inside the US by foreign manufacturers are not considered domestic but rather import vehicles. Another contradiction is regarding DaimlerChrysler. All four marques, Mercedes-Benz, Chrysler, Dodge, and Jeep are wholly owned by DaimlerChrysler, yet Mercedes-Benz vehicles are considered import vehicles, while vehicles by the Chrysler Group are considered domestic vehicles.

Import vehicles

As with the term domestic vehicles, there is no actual definition of the term "Import vehicle." While the two largest American automobile manufacturers, the Ford Motor Company and General Motors, own many subsidiaries who were formerly headquartered in other countries, the vehicles sold under these subsidiaries are still considered to be foreign or import vehicles. This becomes very clear when looking at the Ford Motor Company. Both Volvo and Jaguar are subsidiaries wholly owned by the Ford Motor Company. Both subsidiaries share components with other "domestic" Ford marques and are operated and owned by Ford Motor, yet the vehicles sold by Volvo and Jaguar are still considered to be imports as both subsidiaries used to be foreign marques. Vehicles made by foreign manufacturers or marques made inside the United States are also considered to be import vehicles. The Toyota Camry for example is largely manufactured in the US, yet due to the national origin of its manufacturer, all Toyotas carry a Vehicle Identification Number (VIN) identifying them as import vehicles.

The Big Three

"The Big Three" refers to the three largest automobile manufacturers headquartered in the United States. While there have been roughly 1,800 car manufacturers in the US over the course of the 20th century, only three large corporations with considerable sales numbers were left by the 1970s^{[[Citing sources citation needed]]}. The terms is applied to General Motors, the Ford Motor Company, and the Chrysler Corporation (now Chrysler Group within Daimler-Chrysler).

General Motors

See General Motors for a complete overview of the corporation

General Motors is the largest automobile manufacturer in the United States and the world. GM is headquartered at the Renaissance Center in downtown Detroit, employs approximately 327,000 people, sold 9.17 million cars world-wide and had a $192.6 billion revenue for the year 2005. The corporation sells its vehicles in the United States under the following divisions and subsidiaries:

Ford Motor Company

See Ford Motor Company for a complete overview of the corporation

The Ford Motor Company (FoMoCo) was founded in 1904 by Henry Ford and remains America's second largest and the world's third largest vehicle manufacturer according to total sales volume. In 2005 the Ford Motor Company had a total revenue of $178.1 billion. The corporation sells vehicles under the following brand names and subsidiaries:

Aston Martin
Ford
Jaguar (also has the rights to the Daimler brand in some markets)
Land Rover
Lincoln
Mazda (Ford has a 33.4% controlling interest in the company)
Mercury
Volvo

Chrysler Group, DaimlerChrysler Corporation

See Chrysler and DaimlerChrysler for more detailed description

Formed in 1925 by Walter Percy Chrysler, the Chrysler Corporation has since been one of the most important American automobile manufacturers, consistently ranking as the third-biggest for most of the post-war period.

In 1998, the Chrysler Corporation officially merged with Daimler-Benz of Germany, into a new entity, DaimlerChrysler (DCX), which is heaquartered both in Stuttgart, Germany and Auburn Hills, Michigan (where headquarters of both merged companies were). This raised a dispute on whether Chrysler (or, more specifically, the Chrysler Group within DCX, which consists of most former Chrysler Corporation operations and is headquartered in Auburn Hills specifically) can still be seen as a domestic manufacturer, nevertheless the term "Big Three" is still applied. The merger also sparked some controversy as to the nature of the transaction, which is discussed in the DaimlerChrysler article.

In 2005, the Chrysler Group employed 83,130 people and sold 2.83 million vehicles globally generating $57.4 billion in revenue. The Chrysler Group manufactures and sells vehicles under the following brands:

Other automakers with manufacturing operations in United States

BMW

See BMW AG for a complete overview of the corporation

BMW opened its American manufacturing plant in Spartanburg, South Carolina in 1994, to manufacture the BMW Z3 roadster, later replaced by the BMW Z4 model. Since 2000, the plant also manufatures the BMW X5 SUV. All those models are made exclusively at Spartanburg for both the domestic market and worldwide exports (not counting CKD operations in some countries).

Honda

See Honda for a complete overview of the corporation

Honda was the first Japanese automaker to build a factory in the United States. Following the success of the Accord, the company opened a new plant in Marysville, Ohio in 1982 to assemble the model, which went on to become the most popular car in the US in 1989. Honda expanded their operations and the scope of models manufactured in the US, building the Anna engine plant and East Liberty automobile assembly plant, and in 2001 opening Honda Manufacturing of Alabama in Lincoln. Almost all models sold under the Honda and Acura brands in North America are currently manufactured in either the USA or Canada, but few vehicles are exported to other continents.

Hyundai

See Hyundai Motor Manufacturing Alabama for more detailed description

Hyundai Motor Company started manufacturing in the United States in 2005 only, when their plant in Montgomery, Alabama started the production of the Hyundai Sonata sedan. It was joined in 2006 by the new Hyundai Santa Fe SUV. All Hyundais made in Alabama are only sold in North America.

Mercedes-Benz, DaimlerChrysler

See Mercedes-Benz U.S. International for more detailed description

Apart from manufacturing operations within the Chrysler Group and Truck Group, DaimlerChrysler also operates a plant within the Mercedes Car Group. In 1997, a year before the merger, the former Daimler-Benz followed the steps of their Bavarian competitor and opened a plant in Tuscaloosa County, Alabama, to serve as a worldwide production location for the new M-Class. The M-Class was since then replaced by a newer generation and joined by the new R-Class and GL-Class, also manufactured exclusively in Alabama.

Mitsubishi Motors Corporation

See Diamond Star Motors for more detailed description

Mitsubishi Motors entered the American market through a long-standing partnership with Chrysler Corporation, and later this partnership was extended into a 50/50 joint venture manufacturing operation named Diamond Star Motors (DSM) in Normal, Illinois. In 1991, Mitsubishi took over Chrysler's share in DSM and in 1995 renamed it Mitsubishi Motor Manufacturing of America, Inc (MMNA). The plant has been producing a number of Mitsubishi models and their Chrysler, Dodge, Plymouth and Eagle derivatives, and currently manufactures vehicles based on the American-designed PS platform - the Galant, Eclipse and Endeavor. Manufacturing of related Chrysler-branded vehicles was taken over by Chrysler Group, and while other related Mitsubishi vehicles are sold worldwide, MMNA vehicles are only sold in North America.

Nissan

See Nissan Motors for a complete overview of the corporation

Nissan opened their first factory in the 1980s in Smyrna, Tennessee, joined in the new millennium by another plant in Canton, Mississippi. Almost all models sold under the Nissan brand in United States, as well as Infiniti FX and QX, are currently manufactured there - contrary to Toyota or Honda, the company does not have any manufacturing operation in Canada. Most North American models are specific to this market, although some models, like the Murano and Quest, are exported to other continents.

Subaru

See Subaru of Indiana Automotive, Inc. for more detailed description

Subaru teamed up with fellow Japanese manufacturer Isuzu, forming a joint-venture called Subaru Isuzu Automotive to built and operate a manufacturing plant in Lafayette, Indiana. The plant made Subaru cars and Isuzu SUVs for the American market mostly until 2003, when Isuzu, facing faltering sales in America, decided to quit the venture selling their share to Subaru for as little as $1. From then on, the production was limited to Subaru models such as Legacy and its derivatives Outback and Baja, as well as the new Subaru B9 Tribeca. The two latter models are only built in Indiana for all markets where they are sold. After Toyota acquired a stake in Fuji Heavy Industries, the parent company of Subaru, it announced that it will shift some of the Toyota Camry production to the Lafayette plant.

Toyota Motor Corporation

See Toyota Motor Manufacturing North America for more detailed description

Toyota's first foray into automobile manufacturing in the United States was NUMMI, a joint venture with General Motors based on the latter's production facility in California, which started in 1984 and has been manufacturing Toyota models and their versions branded as Geo, Chevrolet and Pontiac. Toyota went on to establish a number of wholly-owned plants in states such as Kentucky, Indiana, California, West Virginia and Alabama, as well as in Canada. It does not, however, operate a plant in Mexico. Most of Toyota vehicles sold in the United States comes from American plants, as well as some Lexus-branded models, but all Scions are imported from Japan.

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