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Monday, August 27, 2012

Why Some Fuel-Efficient Vehicles Are Not Sold Domestically

Bill Canis
Specialist in Industrial Organization and Business

In 2011, more than 78 million light motor vehicles1 were produced around the world. The top five vehicle manufacturing countries (in order of production) were China, the United States, Japan, Germany, and South Korea, which together accounted for about 60% of global light vehicle production.

Although millions of vehicles are exported and imported annually, vehicle manufacturing is still primarily regional. Most cars sold in Europe are produced there, and most cars sold in North America are produced in the United States, Canada, or Mexico. In 2011, 13 million cars and light trucks were sold in the United States, including 2.8 million imported from outside North America.

Consumer preferences and vehicle regulations and standards differ from country to country and reinforce regional vehicle manufacturing. This makes vehicles distinctly different from some other consumer products, such as electronics, which are produced only in a few countries and then sold globally. The absence of global standards for vehicle fuel efficiency and emissions means that a vehicle may not be sold in certain countries if the manufacturer is not willing to make major investments to bring the vehicle into compliance with local standards.

Date of Report: August 17, 2012
Number of Pages: 7
Order Number: R42666
Price: $19.95

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