The transforming automotive industry

The automotive industry is alive and well in Southeast Michigan. We are a global hub of the industry, as evident by the North American International Auto Show (NAIAS) that is opening this week at Cobo Center, where tens of thousands of industry leaders, professionals, and news media come to celebrate the newest development and innovations in this key industry.

The automotive industry sold more cars and trucks in the U.S. in 2015 than ever before, with Detroit automakers (GM, Ford, and FCA US, aka “Detroit Three”) reporting their best sales in a decade. Detroit Three’s market share is stabilizing at approximately 45 percent.

In Michigan, automotive manufacturing itself is contributing 10 percent of the state’s GDP, while its jobs only account for 4 percent of the state’s total employment. Auto manufacturing employment has increased by 48,000, or 39 percent since the end of 2009 “Great Recession.” It will not gain all its jobs back, but that reflects the transforming changes of the industry.

Productivity continues to improve in the automotive industry, and technology plays an increasingly critical role in the “new” automotive manufacturing process. The following table shows the top occupations with the largest percent growth over the last three years within the Automotive Manufacturing cluster for Michigan. Six of the 12 fastest growing occupations are technology-related (see highlighted cells). For example, there are 2,530 more computer-controlled machine tool operators for metal and plastic processing in 2014 than 2012.

While this dataset is new and only a snapshot for the last three years, it provides some evidence of how the Automotive Manufacturing cluster is changing. It is more technologically advanced than ever.

Future data will tell the story more clearly. As the auto manufacturing industry grows, related industries are thriving, too, from software development to 3D printing. The automotive industry is critical to Southeast Michigan, yet economic diversity is needed for sustainable growth. Both of these issues are addressed the SEMCOG’s draft economic development strategy document.

The recent development of intelligent vehicles such as autonomous cars should provide more opportunities for Southeast Michigan to leverage its economic strength in automotive industry to expand, diversify, and modernize the region’s economy. It’s an exciting time in the automotive industry!