B2B Email Experts

Date: 6th January 2017

From the past few years, automotive industry is one of the most important economic sectors of the revenue. So in the growth of economy this industry has become a pillar for the potential development of the multiple growths. As automobile industry has spread wider the overall economic growth in the BRIC (Brazil, Russia, India, and China) countries has excellent growth rates. This leads to macroeconomic growth and technological achievements in all over the globe.

Here we shall discuss about the potential impacts about the automotive industry on an economy.

What Impact Automotive Industry Has On An Economy?

Impact of Automotive Industry On An Economy

Huge Impact on Generating Revenue

The automotive industry has a huge impact on contribution of tax revenues from vehicle sales, production tax and other resale business tax. This industry has become a potential source of income for the sales of new vehicles and used vehicles. For example in Japan, in a year auto related industry totaled around $7.72 billion tax and roughly speaking 8 to 10% of all tax revenues is increased in every year.

Additionally, automobile industry is more beneficial in generating revenue of globalization through exporting business and foreign exchange earnings. Surprisingly, the share of auto related industry is higher in developed countries than in developing countries.

Potential Growth for the New Business and Industry 

The automotive industry has made a sudden growth in the insurance industry when the new vehicles required an insurance coverage. This impacted to generate hundreds of million dollar revenue for many insurance companies. The production of new vehicles leads to the development of many businesses like maintenance and repair of car, ad agencies for promoting brand new cars and many others. The automotive industry has become more beneficial for the petroleum industry where number of cars on the road is ever expanding. The demand of new vehicles sales gave the industry to boost in profits for many new businesses and industries.

Encouraging the R&D and Creative Business

As consumer demands keep on changing, there will be more benefit for R&D and creative business. In automotive industry there is more demand for variety of products, better performance, improved safety and higher emission standards. So this industry spend more than one third of investment on R&D of any industry; approximately $108 million spent on R&D industry compared to technology and pharmaceuticals. By focusing on core process, the automobile industry has improved the profitability on several niche markets more effectively.

Employment Development

Automotive industry can increase the quality of life through increased safety and comfort of any vehicle. As per the survey, in all over the US there is one motor vehicle for every five people and one car for every 1.25 citizens. This rapid development of automobile industry has made to contribute on huge number of job creation. In 2013, more than 313,000 people were employed in the United States and another 1.1 million people worked for the adjacent industries. Altogether 5 percent of US workforce had direct and indirect links to automotive industry.

The Rise of the BRIC Auto Markets

The traditional global markets dynamics are changing as occurring into the emerging markets. Many automotive industries contribute to invest into production facilities in emerging markets in order to reduce the production costs. The emerging new BRIC (Brazil, Russia, India, and China) markets are a source of increased imports of autos and parts. So most of the automotive companies establish facilities in BRIC marketplace, especially china has resulted in the exports of more original equipment parts. These BRIC marketplace shares the US market for production and transportation of automotive equipments. Recently China’s oldest car maker has announced the manufacturing facility and parts distribution centre in Oklahoma.


To avail our service and get instant results Call us immediately to 8885705564 or write to us at oswin@b2bemailexperts.com