The automotive industry comprises a wide range of companies and organisations involved in the design, development, manufacturing, marketing, selling, repairing, and modification of motor vehicles. It is one of the world's largest industries by revenue with global automotive market at ~$2.75 trillion in 2025. Companies involved in the assembly and marketing of automotive vehicles are heavily dependent on other firms in their supply chain.
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History
The word automotive comes from the Greek autos (self), and Latin motivus (of motion), referring to any form of self-powered vehicle. This term, as proposed by Elmer Sperry (1860–1930), first came into use to describe automobiles in 1898.
The automotive industry began in the 1860s, with hundreds of manufacturers pioneering the horseless carriage. Early car manufacturing involved manual assembly by a human worker. The process evolved from engineers working on a stationary car to a conveyor belt system where the car passed through multiple stations of more specialised engineers. In the 1960s, robotic equipment was introduced, and most cars are now mainly assembled by automated machinery.
For many decades, the United States led the world in total automobile production, with the U.S. Big Three General Motors, Ford Motor Company, and Chrysler being the world's three largest auto manufacturers for a time, and G.M. and Ford remaining the two largest until the mid-2000s. In 1929, before the Great Depression, the world had 32,028,500 automobiles in use, of which the U.S. automobile enterprises produced more than 90%. At that time, the U.S. had one car per 4.87 persons. After 1945, the U.S. produced around three-quarters of the world's auto production. In 1980, the U.S. was overtaken by Japan and then became a world leader again in 1994. Japan narrowly passed the U.S. in production during 2006 and 2007, and in 2008 also China, which in 2009 took the top spot (from Japan) with 13.8 million units, although the U.S. surpassed Japan in 2011, to become the second-largest automobile industry. In 2024, China produced more than 31 million vehicles in a year, after breaking 30 million in 2023, reaching 29 million for the first time in 2017 and 28 million the year before. In 2024, China produced the most passenger cars in the world, with Japan, India, Germany, and South Korea trailing. This was achieved by Chinese car companies signing joint ventures with foreign manufacturers. From 1970 (140 models) to 1998 (260 models) to 2012 (684 models), the number of automobile models in the U.S. has grown nearly twofold. As of 2026, China releases 542 new models (road legal, production cars) every six months.
Safety
Safety is a state that implies being protected from any risk, danger, damage, or cause of injury. In the automotive industry, safety means that users, operators, or manufacturers do not face any risk or danger coming from the motor vehicle or its spare parts. Safety for the automobiles themselves implies that there is no risk of damage.
Safety in the automotive industry is particularly important and therefore highly regulated. Automobiles and other motor vehicles have to comply with a certain number of regulations, whether local or international, in order to be accepted on the market. The standard ISO 26262, is considered one of the best practice frameworks for achieving automotive functional safety.
In case of safety issues, danger, product defect, or faulty procedure during the manufacturing of the motor vehicle, the maker can request to return either a batch or the entire production run. This procedure is called product recall. Product recalls happen in every industry and can be production-related or stem from raw materials.
Product and operation tests and inspections at different stages of the value chain are made to avoid these product recalls by ensuring end-user security and safety and compliance with the automotive industry requirements. However, the automotive industry is still particularly concerned about product recalls, which cause considerable financial consequences.
Economy
In 2007, there were about 806 million cars and light trucks on the road, consuming over 980 billion litres (980,000,000 m3) of petrol and diesel fuel yearly. The automobile is a primary mode of transportation for many developed economies. The Detroit branch of Boston Consulting Group predicted that, by 2014, one-third of world demand would be in the four BRIC markets (Brazil, Russia, India, and China). Meanwhile, in developed countries, the automotive industry has slowed. It is also expected that this trend will continue, especially as the younger generations of people (in highly urbanised countries) no longer want to own a car, and prefer other modes of transport. Other potentially powerful automotive markets are Iran and Indonesia.
Emerging automobile markets already buy more cars than established markets. The industry's expansion has also led to specialised academic programs in automotive marketing and dealership management; for example, Northwood University in Michigan hosts the annual Northwood University International Auto Show, which is the largest student-run outdoor automotive exhibition in North America.
According to a J.D. Power study, emerging markets accounted for 51 percent of the global light-vehicle sales in 2010. The study, performed in 2010 expected this trend to accelerate. However, more recent reports (2012) confirmed the opposite; namely that the automotive industry was slowing down even in BRIC countries. In the United States, vehicle sales peaked in 2000, at 17.8 million units.
In July 2021, the European Commission released its "Fit for 55" legislation package, which contains important guidelines for the future of the automotive industry; all new cars on the European market must be zero-emission vehicles from 2035.
The governments of 24 developed countries and a group of major car manufacturers including GM, Ford, Volvo, BYD Auto, Jaguar Land Rover and Mercedes-Benz committed to "work towards all sales of new cars and vans being zero emission globally by 2040, and by no later than 2035 in leading markets". Major car manufacturing nations like the United States, Germany, China, Japan and South Korea, as well as Volkswagen, Toyota, Peugeot, Honda, Nissan and Hyundai, did not pledge.
Environmental impacts
The global automotive industry is a major consumer of water. Some estimates surpass 180,000 L (39,000 imp gal) of water per car manufactured, depending on whether tyre production is included. Production processes that use a significant volume of water include surface treatment, painting, coating, washing, cooling, air-conditioning, and boilers, not counting component manufacturing. Paintshop operations consume especially large amounts of water because equipment running on water-based products must also be cleaned with water.
In 2022, Tesla's Gigafactory Berlin-Brandenburg ran into legal challenges due to droughts and falling groundwater levels in the region. Brandenburg's Economy Minister Joerg Steinbach said that while water supply was sufficient during the first stage, more would be needed once Tesla expands the site. The factory would nearly double the water consumption in the Gruenheide area, with 1.4 million cubic meters being contracted from local authorities per year — enough for a city of around 40,000 people. Steinbach said that the authorities would like to drill for more water there and outsource any additional supply if necessary.
World motor vehicle production
By country
The OICA counts over 50 countries that assemble, manufacture, or disseminate automobiles. Of those, only 15 countries (boldfaced in the list below) currently possess the capability to design original production automobiles from the ground up, and 17 countries (listed below) have at least one million produced vehicles a year (as of 2023).
By manufacturer
These were the ten largest manufacturers by production volume as of 2017, of which the eight largest were in the top 8 positions since Fiat's 2013 acquisition of the Chrysler Corporation (although the PSA Group had been in the top 8 1999 to 2012, and 2007 to 2012 one of the eight largest along with the seven largest as of 2017) and the five largest in the top 5 positions since 2007, according to OICA, which, however, stopped publishing statistics of motor vehicle production by manufacturer after 2017. All ten remained as the ten largest car makers by sales until the merger between Fiat-Chrysler and the PSA Group in early 2021; only Renault was degraded to 11th place, in 2022, when being surpassed by both BMW (which became the 10th largest in 2021) and Chang'an.
These were the twenty largest manufacturers by production volume in 2012 and 2013, or the 21 largest in 2011 (before the Fiat-Chrysler merger), of which the fourteen largest as of 2011 were in the top 14 in 2010, 2008 and 2007 (but not 2009, when Changan and Mazda temporarily degraded Chrysler to 16th place). The eighteen largest as of 2013 have remained in the top 20 as of 2017, except Mitsubishi which fell out of top 20 in 2016, while Geely fell out of the top 20 in 2014 and 2015 but re-entered it in 2016.
Inter-company relationships
Stakes
The following tables list automobile manufacturers that have stakes in other car makers:
Mercedes-Benz Group held a combined 6.2% stake in the Renault–Nissan–Mitsubishi Alliance, and the Renault-Nissan-Mitsubishi Alliance also held a combined 6.2% stake in Mercedes-Benz Group until 2021.
Joint Ventures
Until 2022, China required foreign automotive firms to form joint ventures in order to access their market. The policy led to quality improvement across the industry.