Automobile Industry in Society

Automobile Industry in Society

The article examines the function of the automobile industry in industrialized nations’ economies. The work highlights the significant contribution of the automotive sector to GDP growth, job creation, the ability of the sector to contribute to tax bases and state budget revenues, as well as the contribution of the sector to the growth of auxiliary industries and the promotion of scientific and technological advancement.

The socioeconomic development of the nation depends significantly on the capital- and knowledge-intensive automobile sector. The automobile industry is currently flourishing, including a rising number of nations in the production of cars, while the market’s power structures are continually shifting. The presence of motor transportation in the infrastructure of the national economy determines the role of the automobile industry in the growth of the contemporary economy and the prospects for its growth. The article discusses the historical progression of the automotive sector in industrialized nations, examines the current environment, offers projections, and identifies the key trends.

Without the growth of the automobile sector, it is currently difficult to envision the expansion of the nation’s economy. The global production of vehicles and trucks in 2017 was 73.4 million cars and 23.84 million trucks, according to the “OICA” international association of automakers. 1 International estimates place the global vehicle industry’s average yearly revenue at more than 2.75 trillion Euros2 or 3.65% of the global GDP. Production increased by 25% in the automobile sector over the past 10 years (2007–2017). With global auto exports by country3 estimated at 698.2 billion dollars in 2016, cars rank among the world’s greatest export products, surpassing oil income, for instance. USA. Along with being a key innovator, the sector has invested more than 84 billion Euros in development and research.

The manufacturing of process equipment, the automotive industry, and pharmaceuticals and biotechnology dominate among the 2500 leading firms in R&D investment. For instance, just the amount of investment in R&D business VW AG4 increased from roughly 13 billion Euros in 2014 to about 13.2 billion US dollars in 2016. It is important to note that 26 developed nations receive more than 430 billion Euros in tax revenue each year from the automobile industry.


Steel, iron, aluminum, plastic, glass, carpeting, textiles, computer chips, rubber, and many more materials are consumed by the vehicle industry. According to statistics, the car industry is responsible for over half of the world’s consumption of oil, rubber, around 1/4 of the production of glass, and 1/6 of the production of steel. In terms of the volume of other industries’ products consumed, the sector comes in second to airplane construction. A 1% increase in the automobile industry results in a 1.5% increase in GDP in industrialized nations. Through associated industries that get orders from the automobile industry, the indirect impact of the automotive industry on GDP is strengthened.

The most important segment of machine construction in developed nations is the automotive industry. No major economy exists without a sizable automobile industry within its borders. As a result, the automobile industry accounts for between 5 and 10% of the GDP of wealthy nations. Germany produces 14% of this branch’s output for machine-building, Japan 12%, and South Korea 10%. The automobile industry generates a $3 gain in GDP for every dollar invested (average multiplier). This statistic shows that no other sector can match the automotive industry. According to several projections, the auto industry‘s gross revenue will dramatically increase and generate an additional 1.5 trillion dollars in revenue by 2030. (A 30% rise in revenue). While the proceeds from the sale of conventional cars, after-sale service, and spare parts will total around 5.2 trillion USD. This amount was only 3.5 trillion USD in 2015. These revenues taken as a whole may raise the automobile sector’s yearly growth rate to 4.4%. The International Organization of Automobile Manufacturers, or “OICA,” compared the global automotive industry’s performance overall to that of the sixth-largest economy in the world.


Modern automakers and industry experts anticipate that the global automotive market will increase by 3.6% year, approximately matching the dynamics of the global GDP. 6 Because it contributes to the growth of other industries and the nation as a whole, the automobile industry is one of the essential sectors of the economy. The welfare and future of millions of people, as well as to a significant extent the nation’s ability to defend itself, are crucial to the auto-building complex’s ability to function successfully. A striking illustration of the development of a worldwide “super-industry” is the automotive sector in nations like the US, Japan, Germany, and South Korea. The ratio between these nations’ macroeconomic factors and the automotive industry’s development.

The greater this country’s GDP proportion of global production. It is significant to remember that the amount and composition of exports and imports particularly reflect the economy’s level of development. Engineering, which includes automotive, makes up 25 to 40% of the industrial structure in the US, Germany, Japan, and South Korea. This percentage is less than 10% in poor nations. The bigger the economy’s contribution to global exports, and the higher the proportion of high-tech goods and lower the proportion of raw resources in the export mix. These nations are among the top 10 exporters.

Automobiles, aircraft, machinery, equipment, computers, other electronics, high-end home goods, etc. make up the bulk of these nations’ exports. However, automobiles, auto parts, and accessories make up the majority of these nations’ exports. The amount of machinery and equipment exported from these nations is regarded as the most significant indicator of the state’s technological level, and changes in this sector’s trends reflect the efficiency of state administration. Around the world, there is a sophisticated and intricate infrastructure for the automotive sector. Today, the export industry and every other international economic activity are about to undergo significant structural changes.


The automotive industry supports the growth of the tax base and state budget revenues, fosters the development of auxiliary industries, influences scientific and technological advancement, reflects the level of solvent demand and the standard of living of the populace of the nation, among many other things. Therefore, for any nation, the efficient operation and growth of the automotive sector are crucial for both its economic and social significance.

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