$60-Billion Car Industry Helps Drive Area Economy

Automotive businesses accounted for $60 billion in sales by retailers and manufacturers in the five counties of the Greater Los Angeles region in 1997, making the car business a critical part of the area’s economy, according to a new report by the Los Angeles County Economic Development Corp.

And thanks to new employment from the growth of auto-industry businesses since then, coupled with two years of record retail sales in new and used cars and automotive parts and equipment, the industry’s economic value to the region certainly has increased by a few billion dollars since then, said Nancy D. Sidhu, lead author of the six-page report that analyzes state and federal economic data.

Separately, said Sidhu, the EDC’s senior economist, the region’s automotive wholesale industry churned out $49 billion in sales in ‘97, the latest year for which the group had complete data.

But because that number includes an unknown percentage of sales duplicated in the retail figures, she said, it was omitted in calculating the overall economic effect of the auto industry.

More than 240,000 people in Los Angeles, Orange, Ventura, Riverside and San Bernardino counties are employed in the car business, the report says.

The majority of those jobs--142,000--are considered direct employment, meaning that those people work for auto makers or for some of the nearly 1,000 new- and used-car dealerships or nearly 700 automotive parts and equipment manufacturing firms that call the five-county region home.

Those working directly for auto companies such as Toyota Motor Corp., Honda Motor Co., Nissan Motor Co. and Ford Motor Co.’s Lincoln Mercury division--all with U.S. headquarters in Los Angeles or Orange counties--were earning an average of $57,000 a year back in 1995, when UCLA last studied the scope of the auto business here.

An additional 100,000 jobs are in related businesses devoted to providing goods and services--such as fuel, engine maintenance, collision repair and carwashes (there are 780 of those)--to automobile owners and their vehicles.

That’s 242,000 jobs, making automotive employment about the same as that in the motion picture and construction industries, said George Huang, an associate economist with the Los Angeles economic development group.

Other key numbers from the report:

* Southern Californians spent $15.7 billion buying new passenger cars and light trucks (pickups, minivans, sport-utility vehicles) in 1998. Add $2 billion for used vehicles, and the total reaches $17.7 billion.

* Four of the 25 largest new-car dealership chains in the country are based in Los Angeles and Orange counties, the report noted.

* There were 3,811 gas stations and 8,982 auto-repair and maintenance shops in the five-county Greater L.A. region at the end of 1997.

* By the end of this year, there will be 15 automotive companies with their world or national headquarters in Southern California.

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Times staff writer John O’Dell covers the auto industry for Highway 1 and the Business section. He can be reached at john.odell@latimes.com.