Auto repairs generate $173 billion annually

April 11, 2012

A new report from the Center for Automotive Research documents that automobiles drive more than $735 billion into the U.S. economy each year. Of that total, the manufacture and sales of parts, along with repairs and service, accounts for $173 billion in economic activity.

"This study confirms that the U.S. automotive sector has a huge economic impact throughout the country. In 18 states, autos generate 15-23% of state tax revenues," said Mitch Bainwol, CEO and president of the Alliance of Automobile Manufacturers. "Cars are a massive economic driver, from their production and sales to their use and maintenance."

The study says $30 billion of state tax revenue is generated from sales and service of vehicles. In addition, $860 million comes from state income taxes on direct employment by automakers, suppliers and dealers.

In 2010, the auto industry generated at least $43 billion in federal tax revenue, including $14 billion in income taxes and $29 billion from federal motor fuel taxes. (Property taxes are not included.)

The auto industry also generated more than $91.5 billion in state government revenue in 2010, or 13% of total state tax revenue on average.

"In this country, eight million people are employed directly and indirectly as a result of the manufacture, sale and repair of automobiles,” said Bainwol. “Those eight million people earn $500 billion in compensation. So auto policy is central to the economic vitality of virtually every state.”

To view federal and state information on taxes and fees generated by autos, visit