Structural Change and Cyclicality of the Auto Industry
The auto industry is quite concentrated geographically, with the Seventh District being home to about 37% of the industry’s light vehicle output. The industry is also known for being highly cyclical, a characteristic it shares with most other durable goods industries. However, during the last decade or so, the auto sector has undergone a number of structural changes. This Chicago Fed Letter identifies these changes and discusses how they might affect the industry’s and possibly the region’s response to a slowdown in economic activity.