ARTHUR WHEATON: Automotive companies are divided into two major categories. The largest category is original equipment manufacturers, which includes a lot of the companies you've heard of in the past, such as General Motors, Ford, Daimler-Chrysler, Volkswagen. The second group of companies is called suppliers, or tier 1 suppliers. They're the ones that are very important for the quality, cost, and technology developed for the original equipment manufacturers.
The global auto industry makes up a lot of different countries and a lot of different companies that are all around us. Some of the names I'm sure you'd recognize will be General Motors, Ford, Toyota, Volkswagen, and Daimler-Chrysler. But some of the larger European companies, you may not have heard of, such as PSA Peugeot Citroen, Renault, that are very big and very popular in France, but not necessarily as well-known in the United States. Some of the Japanese companies on that list I'm sure you recognize as well, such as Mitsubishi, and Honda, and Nissan.
But the reality of some of those countries and some of those companies are quite different. Take Nissan, for example. Nissan is controlled by Renault. So Nissan, being a Japanese company, is actually run by France, by Renault. Mitsubishi, you think of as being a typical Japanese company, is run by Daimler-Chrysler. They own controlling interest of it, along with several other Japanese car companies that General Motors has purchased parts of.
These OEMs are some of the largest companies in the world. General Motors, the largest auto company, is only the third-largest company in the world, behind Walmart and Exxon Mobil. Some of the other big companies, like Ford, they're the second-largest auto company, but they're the sixth-largest company in the world. Some of the other big companies, such as Toyota, fall further down that list, but may be much more profitable than some of the larger companies. Size doesn't necessarily make better in many instances.
Let's take a minute to talk about number three on that list, Toyota. Toyota's from Japan, and they've made quite a few popular vehicles. This Toyota Corolla right here is the number one-selling car of all time. The number two-selling cars of all time come from Volkswagen. Number three also comes from Volkswagen.
But Toyota here makes this particular vehicle in 14 different countries around the world, and they've sold more than 20 million copies of them. Sitting next to it is another popular vehicle for Toyota, which is the Toyota Tacoma pickup truck. And both of these will be in the quiz at the end, at the last section. You'll get a chance to try to test your knowledge and skill.
The next company on that list is number four, Volkswagen. It comes from Germany. As I'm walking over here towards this great line of Volkswagens, let's give you a little glimpse of the Volkswagen that you've come to know. Volkswagen owns more than just Volkswagen. They also own Audi, and they own some very expensive cars, such as Bentley and Lamborghini, that people have dreamed of for years.
The Volkswagen here has two of the best-selling cars of all time. You've got the Volkswagen Golf, and the one everyone remembers from the '60s, the Volkswagen Beetle. Those are the number two- and number three-selling cars of all time.
Another German company that comes next on that list is Daimler-Chrysler. You've heard of Daimler. You've heard of Chrysler. You may not know that Daimler and another person from that company, Carl Benz, were the first ones to invent the automobile. They invented those back in the 1880s and were fierce competitors, and they couldn't merge the companies until after they had passed away.
Many people may not realize that Volkswagen also owns the most expensive car built in the world, the Bugatti. They sell for about a million dollars apiece, and they can get horsepower of up to 1,000 horsepower for their latest car, the Veyron. Another German car company we need to talk about that may not be on your list would be BMW and Porsche.
Moving away from Germany, we can go to France, which has another couple of companies on the list. You've got Renault, which used to own American Motors here in the United States, and you also have PSA Peugeot Citroen, another French company that is very popular in Europe. Peugeot Citroen is the second-largest car company in Europe.
Renault is a very interesting company from a very interesting country. So Renault, being from France, is partially owned by the French government. Renault used to own American Motors here in the United States. So if you think about it, you had the French government owning American Motors. How ironic is that? Renault also bought controlling interest of Nissan. So Renault controls the Japanese company Nissan.
Many of these car companies have different preferences on their ownership. We talked about Renault owning controlling interest of Nissan. Different OEMs have different preferences on how much of a company they want to own. This Volvo here next to me is owned by Ford Motor Company. Ford owns all of Volvo cars, but they didn't buy any of the Volvo semi trucks.
Other car companies prefer buying smaller stakes, such as General Motors. They've got 20% of Suzuki, 20% of Fuji Heavy Industries, better known as Subaru, and they also own 10% of Fiat. It has become cheaper, in some instances, to actually buy the entire car company than it is to develop that technology on your own. Volvo here cost about $6 billion for Ford Motor Company to purchase, but it would have cost them a lot more to develop all of the safety and other technologies that Volvo has to offer.
The Subaru over here-- this Subaru is built in a joint venture that houses both Subaru and Isuzu vehicles. And General Motors has different equity stakes in both of those companies. General Motors only owns 20% of the Subaru here, but owns 49% of the Isuzus built in the same plant.
These joint ventures are becoming more common all over the world, especially in China. Some of the ownership rules in different countries are quite different than the US. The US car companies are not allowed to have complete ownership of any of the plants, so many of the Chinese car companies are joint ventures, with the biggest player in China being Volkswagen, followed closely by General Motors.
We're standing next to a Chevy Aveo. And I want to talk about Hyundai, number seven on the list, from South Korea, the seventh-largest car company in the world, moving up fast. Another Korean car company not on the list but growing fast is Kia and Daewoo.
Hyundai owns controlling interest of Kia. The other car company, Daewoo, from South Korea, General Motors bought most of those. So you have the Daewoo cars no longer being able to be sold in the United States as Daewoos, but are brought back to the United States under a different name plate.
Another country I'd like to talk about is Italy. One of the big car companies, number 11 on your list, is Fiat. You may not have dreamed of owning a Fiat in your younger days, but I'm pretty sure you've dreamed or thought about owning a Fiat-owned company.
Fiat owns a couple other companies, such as Maserati, Lancia, Ferrari, that people really tend to like and have a nice taste for. They also own Alfa Romeo. General Motors bought 20% of Fiat, but now that 20% has gone down to 10% in Fiat.
Well, I hope you've enjoyed your chance to visit around the world. We've talked about South Korea, Japan, Germany, France, and Italy. Let's take a trip over to the Ford lot and talk about Ford Motor Company, as we stand here in front of the Volvo sign from Volvo, one of the other car companies that Ford happily owns.
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Buying a car made in America is easier said than done. A quick look at the auto industry shows global competition is stronger than ever. The top 12 global car companies represent the U.S., Japan, Germany, Italy, France, and South Korea.
When you consider the manufacturing of parts and assembly of vehicles imported to the U.S., then Mexico, Canada, the United Kingdom, Sweden, China, Belgium, and Australia become major players as well. The global auto industry presents a diverse mix of nationally- and internationally-owned companies, all fiercely competitive. Understanding the current auto industry can help consumers be more aware of where their products are made.
This video is part 2 of 6 in the Today's Cars series.