Economic Impact of the Automotive Industry

The auto industry is a major contributor to national and global economies. Since 2000, total spending on new vehicles in the United States accounted for 4 percent of GDP – or nearly $500 billion. Last year, the industry employed 2.9 million people at automotive companies, supplier businesses and dealerships. Of this total, nearly 1 million worked directly for automakers and suppliers. The wage and salary compensation in the industry is substantial. In the United States, for example, the average weekly earnings of automotive production workers is double the average weekly earnings for all of private hourly production workers.

The influence of the industry is quite broad. For example, in the United States, the auto industry supports jobs and economic benefits through related employment at dealers, suppliers and service shops and through the expenditures of people employed by those industries, accounting for five jobs in the U.S. for each job at an automaker.1 It is the highest multiplier of any industry in the U.S. economy.

Motor vehicles and auto parts represent the single largest export sector in the United States, with $96.7 billion worth exported in 2006. The auto industry also leads U.S. manufacturing industries in the level of research and development investment, spending more than $17 billion in the United States in 2005.