Transport Manufacturing: Introduction
Establishments within this segment manufacture or assemble complete aircraft, develop and make aircraft prototypes, make major modifications to aircraft systems, and complete aircraft overhaul and rebuilding.
Companies in this segment make passenger cars and light trucks.
Military Armored Vehicles
Companies within this segment are primarily engaged in manufacturing military vehicles included armored vehicles, combat tanks, and components for these vehicles.
Motorcycle and Bicycle
This segment includes companies engaged in manufacturing motorcycles, bicycles, tricycles, and the parts used to make these.
Companies manufacture locomotives, freight and passenger rail cars, and brakes and other parts used to construct trains.
Ships and Boats
Companies manufacture boats that are intended primarily for the personal use of consumers. These boats include inboard and onboard motor boats, sailboats, and yachts.
The Transport Manufacturing industry is Highly Concentrated. The production in this industry is dominated by a small amount of large firms that are able to shape the industry’s direction and price levels.
Primary Demand Drivers
- Employment and interest rates
- Demand for commercial, military, and private airplanes
- New car sales, which are strongly affected by interest rates
- Replacement market
- Manufacturing efficiency
- Product quality
- Effective marketing
- Efficient operations
- Ability to secure long-term contracts
- Difficulty of manufacturing products
- Demand volume (since many costs are fixed)
From the Blog
Elon Musk, the CEO of Tesla, released 30 brand new Model 3 electric vehicles to Tesla employees in Fremont, California on July 28. Tesla advertises the Model 3 as one of the most affordable electric vehicles on the market, competing with fuel-efficient cars like the Hyundai Ioniq EV, Chevrolet Volt, BMW i3, and Nissan Leaf. While demand for the Model 3 is high—it has already gathered 50,000 advanced deposits—the vehicle’s mass-market accessibility is not as apparent. In comparison to Tesla’s Model S, which can be prepared for delivery in seven days, current customer orders for the Model 3 are expected to be ready within the next 12-18 months. What is the underlying cause of such a large disconnect between consumers and the product? The reason boils down to an exponential increase in production that connects directly to a supply chain that has “about 30 percent of its components coming from abroad.”
In the last blog of this week's series, we take a look at the airplane manufacturing industry.
2017 has proved to be a successful year for airplane manufacturing so far. The industry experienced a surge in aircraft orders in February, putting it on track for a record year of directories. In the United Kingdom, in particular, the number of commercial aircraft ordered by airlines jumped to 43 last month from just 4 in February of the previous year, according to the Aerospace, Defence, Security & Space Group. These figures are based on orders from Airbus, Boeing, Bombardier (Canada), Comac (China), and Irkut (Russia).
- Hoovers (Date Accessed: 6/1/2017)