Q: What is a Car Manufacturer?

December 17, 2013 12:53 PM

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Quite simply, a car manufacturer produces automobiles. Car manufacturers vary in size, from small regional and niche market producers to large global businesses with production facilities located in numerous countries. Combined, these manufacturers produce tens of millions of cars and commercial vehicles each year.

Because having a strong auto industry is good for most countries' economies, many nations sponsor their automobile industry or erect trade barriers to help their domestic producers by raising the price of automotive imports. For a U.S. car to be considered a "domestic" car, the manufacturer must assemble it with 75 percent or more of its parts produced within the United States. However, this does not limit the actual assembly location to U.S. borders. As long as the parts are made in America, an automobile can be assembled in Canada or Mexico, shipped back to the United States, and still be sold as a domestic vehicle in U.S. car dealerships.

A car dealership sells new or used cars. For those dealing in new cars, the dealership has a contract with a car manufacturer to carry its models. Dealerships usually also have repair facilities available to service the cars they carry, with automotive technicians on hand who are trained to deal with the equipment carried by the manufacturer. Dealerships are able to pass on manufacturer incentives to customers, including rebates that can lower the purchase price of a new car. They may also carry certified used cars that meet the manufacturer's quality requirements.

More and more these days, you often find dealerships offering models from multiple manufacturers under the group's ownership umbrella.

There are also many unaffiliated used-car dealers. They tend to have a wider variety of vehicles for sale, some of which might go through a 3rd-party certification process. These 3rd-party certifications may not have the same requirements as manufacturer certification. For buyers, this can mean a large difference between the quality of a certified pre-owned (meaning: "used") sports car that's been inspected and certified through Toyota, Ford or Volkswagen, and one that's been certified by the dealership itself.

A business of any size can become a car manufacturer simply by producing its own automobile model. However, entry into the industry isn't cheap, and neither is continual operation. Distribution of automobiles produced is handled through a series of car dealerships, with most car manufacturers either owning or partnering with dealerships around the world. This allows them to stay close to customers while offering local service for the cars the company produces.

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