Industry

The automotive industry designs, develops, manufactures, markets, and sells the world's motor vehicles, more than three-quarters of which are cars. In 2020, there were 56 million cars manufactured worldwide, down from 67 million the previous year.The automotive industry in China produces by far the most (20 million in 2020), followed by Japan (seven million), then Germany, South Korea and India.The largest market is China, followed by the US.

Around the world, there are about a billion cars on the road;they burn over a trillion liters (0.26×10¹² US gal; 0.22×10¹² imp gal) of petrol and diesel fuel yearly, consuming about 50 exajoules (14,000 TWh) of energy. The numbers of cars are increasing rapidly in China and India. In the opinion of some, urban transport systems based around the car have proved unsustainable, consuming excessive energy, affecting the health of populations, and delivering a declining level of service despite increasing investment. Many of these negative effects fall disproportionately on those social groups who are also least likely to own and drive cars.The sustainable transport movement focuses on solutions to these problems. The car industry is also facing increasing competition from the public transport sector, as some people re-evaluate their private vehicle usage. In July 2021, the European Commission introduced the "Fit for 55" legislation package, outlining crucial directives for the automotive sector's future.According to this package, by 2035, all newly sold cars in the European market must be zero-emission vehicles.

Car costs

A car's internal costs are all the costs consumers pay to own and operate a car. Normally these expenditures are divided into fixed or standing costs and variable or running costs.Fixed costs are those which do not depend on the distance traveled by the vehicle and which the owner must pay to keep the vehicle ready for use on the road, like insurance or road taxes. Variable or running costs are those that depend on the use of the car, like fuel or tolls.

Compared to other popular modes of passenger transportation, especially buses or trains, the car has a relatively high cost per passenger-distance traveled. For the average car owner, depreciation constitutes about half the cost of running a car. The typical motorist underestimates this fixed cost by a significant margin.

The IRS considers that the average US automobile has a total cost of US$0.58/mile, around €0.32/km. According to the American Automobile Association, the average driver of the average sedan spends totally approximately US$8,700 per year, or US$720 per month, to own and operate their vehicle.

Fixed costs

Car acquisition

The car itself has a cost. The cost can be reduced by buying a reused car. But the reused car may have hidden defects, hidden problems, or be about to be out of norms. It is the most shallow and most immediate cost. But it can be delayed under a loan scheme.

Loan costs

Car finance comprises the different financial products which allows someone to acquire a car with any arrangement other than a single lump payment. When used, and for the purpose of assessing the private financial costs, one must consider only the interests paid by the car owner, as some part of the amount the owner pays each month for the finance is already embedded in the depreciation costs.

Depreciation

The yearly depreciation of a car is the amount its value decreases every year. Normally a car's value is correlated with the price it has on the market, but on average a car has a depreciation around 15–20% per year. Depending on market conditions, cars may depreciate 10–30% the first year. Since 2021, however, cars have appreciated significantly the first year due to shortages of cars and up to five-year wait times for new cars.

Car taxes

Car taxes, road taxes, vehicle taxes or Vehicle Excise Duty are the amount of money car owners pay the government to allow the car to operate within that region or state. These taxes serve to maintain the road infrastructure or to compensate the negative externalizes caused by the motor vehicles. These taxes may depend on engine displacement, vehicle weight, miles traveled, CO2 emissions, or the car value.