In Cincinnati, the Rubber Meets the Road for the Automotive Industry
Convenient proximity and unparalleled people power are just two reasons the Queen City is a key player in the automotive sector.
REDI Cincinnati’s research team has developed industry sector analyses, and these insightful documents highlight the most important areas poised to drive the region’s economic progress, both in the present and the near future. Spanning diverse sectors, the reports touch upon areas from sustainable packaging to semiconductors. Their comprehensive nature ensures that stakeholders have a clear understanding of emerging trends and potential growth avenues.
The following report focuses on the automotive industry, a powerful economic driver (no pun intended) in our region. With exciting new technologies emerging all across the automotive industry, as well as a welcome end to supply chain challenges introduced by COVID, 2023 was a time of stellar growth in the automotive industry. And here in Cincinnati, the sector’s strong performance bolstered an important economic arena.
Cincinnati’s Long Automotive History
Once upon a time, Cincinnati was actually a main hub for automobile production, with Cincinnati Magazine reporting that, around the turn of the 20th century, more than a dozen automakers called the Queen City home. Though the names CinO, Armleder, Buggycar, and Crane & Breed might not mean much to modern-day Cincinnati drivers, these companies rode the road from a booming buggy economic sector ($9.5 million in 1887) to making motorcars at the dawn of motorized travel.
Why don’t we know today’s Porkoplis as Cincinnati Motor City? Well, Henry Ford and Detroit, in short. But not being home to Ford, General Motors and the like doesn’t mean our fair city’s automotive industry isn’t an important part of Cincinnati’s economy today. With more than 11 thousand workers and $1.6B in Gross Regional Product, the automotive industry is rolling along nicely here at home.
The Data Details
One major data point to consider is this: The Motor Vehicle Parts Manufacturing industry is 2.4 times more concentrated here in Cincinnati than the national average. There are a lot of vehicle parts made here! But why is Cincinnati such a hotbed of automotive activity?
The answer, in large part, is simple: location, location, location. Cincinnati’s geographic location is a boon to our area across numerous industries, with three major highways—I-75, I-71 and I-74—running right through the Queen City. This provides our automotive parts makers with easy access to companies across the Midwest and Southeast. In fact, our region’s motor vehicle parts manufacturers can reach an impressive 77% of North American auto production (and 96% of U.S. and Canadian auto production) with just a day’s drive or less.
When we say Cincinnati is “well-positioned” to support the automotive industry, in many ways we mean that literally!
Projected Growth for 2024
It’s true that industry outlets are predicting something of a slowdown in the automotive industry this year over last (which was a remarkable year for vehicle sales), there’s still an expectation of considerable growth across the sector in 2024. And one huge driver in this growth is the ever-expanding technological advancements available to auto buyers, especially around hybrid and fully electrical vehicles.
We detailed Cincinnati’s exciting involvement in the EV subsector in a previous post, and, again, proximity plays a major role in this regional economic performance. As more and more buyers shift away from gasoline to hybrid and electric vehicles, we can expect this more sustainably minded market (and the manufacturing opportunities it introduces) to grow as a major part of automotive sales, pushing profit in 2024 and beyond.
The Talent Factor
While geographical positioning and a progressive business environment are two major draws for operations seeking cost-effective expansion opportunities, it really is the people that make this region so great. And our talented workforce is an integral factor in what this region offers profitable businesses.
Cincinnati’s notably low cost of living is a known commodity for those of us lucky enough to live here-our Cost of Living Index (COLI) is just 92.2, meaning its 7.8% less expensive to live here than the national average-but this distinct factor creates a win-win scenario for automotive industry businesses seeking to reduce costs while still providing employees with a high quality of life. Businesses operating in Cincinnati are able to reduce payroll expenses (compared to those in other metros) and still provide wages that deliver employees high spending power.
Cincinnati’s livability also draws a deep bench of talent across a wide range of industries, including automotive workers of all skill sets. Here, businesses will find a talent pool of industrial production managers, software developers, electrical engineers, industrial engineers, mechanical engineers, and many more specialty roles critical to the industry. Our labor pool is ready and able to fill important roles throughout automotive fabrication, assembly and maintenance processes.
And as cyber systems become an active part of automotive travel, our region’s computer specialists, software developers, cybersecurity ecosystem and other tech and engineering specialists are ready to rise to the challenges of tomorrow’s transportation.
A Future-Ready Region
The automotive industry is one of constant advancement, and just as we’re adapting to electric cars and hybrid technologies, we’re also preparing for wide-scale implementation of cyber-physical systems in transportation and mobility. Smart infrastructure and self-driving automobiles are here, and Cincinnati’s expanding transportation ecosystem is projected to grow by 2% over the next five years.
This means that, as autonomous vehicles, vehicle-to-vehicle, and vehicle-to-infrastructure exit science fiction narratives to become part of our daily lives, our region is ready to welcome new opportunities for efficiency, safety and convenience when it comes to travel.
It’s no secret that the Cincinnati region has a lot to offer the automotive industry. The Queen City is currently home to 88 automotive industry locations, with businesses such as Bosch, Ford, Bilstein, Festo, Honeywell Integrated, Cincinnati Incorporated and many more finding a great home here in our region. With a skilled workforce, low cost of living, ideal geography, technological readiness and more, this region is set to play a major role in the future of the automotive industry.
*For further information regarding the automotive industry in the Cincinnati region, please visit HERE or contact Trevor Wellbrock, REDI Cincinnati director of business development (513.579.3110; twellbrock@redicincinnati.com)