A Brief Note On The American Auto Industry

In the hyper competitive world of today’s mega corporations controlled by the sway of the stock market, giant old industrial era companies rule over the automobile market in the United States as well as large parts of the global automobile market. Companies such as General Motors, Chrysler, and Ford were at the center of it until the economic crisis now known as the Great Recession of the late 2000s. The whole market was declining in sales with General Motors and Chrysler taking the biggest hits while Ford only suffered decline comparable to foreign automakers’, Honda and Toyota, levels due to restructuring in prior years. However, the tipping point was edging closer to bankruptcy with General Motors and Chrysler that ultimately

The American automotive industry began in the 1890’s. It evolved into the largest industry in the world as a result of the size of its domestic market and mass production.the American auto industry began with hundreds of manufacturers, but by the end of the 1920’s it was dominated by three large companies, General Motors, ford and Chrysler. By the end of the Great Depression and world war 2 these companies prospered making the U.S the country which provided three quarters of the worlds vehicle . They however did not remain number one, Japan overtook the market in the 1980s and China in 2008., making the U.S second in the world. The impact of the global market caused the American auto industry to suffer considerably. Japan and China were producing more vehicles at cheaper prices. Labor cost were cheaper therefore companies took their factories to these countries. In 2008 the American auto industry was on the brink of collapse . Access to credit for loans decreased and sales plunged by 40 percent. Chrysler and GM both sort

Up until about the 1960s, the Big Three dominated the automotive landscape in the United States. The oligopolistic trio topped out at about a combined 90% market share in a domestic industry with only seven remaining producers (International Encyclopedia). The intra-industry domestic rivalries experienced a new foe beginning in the 60s. Starting with Volkswagen and Toyota, foreign competition began to chip away at the Big Three’s stranglehold of the US market.

One of the biggest name brand car dealers that took a hit due to models being behind the new and current models was Pontiac and Saturn which in turn created decrease in sales. The models needed to be removed from the factory assembly lines. This had a huge effect on economy that laid off American civilians and contributed to the unemployment numbers. Toyota and Honda started to take the market by storm, and surpassing some of the American competitors. Once Ford and GMC realized this they knew they had to try a different strategy to overcome the growing market. Ford started to reduce emissions and save on fuel economy with smaller engines with the same amount of speed.

Investopedia, the American auto industry has struggled to keep U.S market shares higher than they were

Foreign auto manufacturers have been increasingly biting into the American automaker’s market share. In 2000 the big three enjoyed a combined 68% of the American market share. With foreign auto companies able to produce fuel efficient quality cars at lower cost, their cars penetrated the market reducing the big three’s share of the market to 35% by 2014 (Investopedia, 2015). Having been forced during the last few decades to invest heavily in wages and benefits as demanded by the unions, American automakers were unable to remain competitive in an ever

The automotive industry is without a doubt an industry that has massive implications relating to the United States economy as well as affecting every American household. Shifts in the supply and demand of automobiles influence the current and future household purchases. Households must determine what amount of their hard-earned income to allocate to certain necessities. Because most households have a budget, the amount spent on transportation it limited. While most industries have an effect on the economy, the automotive industry has far-reaching implications for most Americans. Not only are the workers affected but the many spin-off jobs created as well as the consumers that must

1 BACKGROUND 1.1 Ford Motor Company Ford was the pioneer of the motor vehicle, just over 100 years ago. Today, Ford Motor Company is a family of automotive brands consisting of: Ford, Lincoln, Mercury, Mazda, Jaguar, Land Rover, Aston Martin, and Volvo, employing 350,321 (Yahoo Finance) workers in more than 200 countries. 1.2 Motor Industry The American oligopoly in the motor industry, consisting of Ford, General Motors and Chrysler, has suffered from poor financial results recently. As reported by www.guardian.co.uk (16/06/03), “the big three US car-makers are wrestling with the combined effects of over-capacity, growing competition from Europe and Japan, huge pension and health care costs, and a damaging increase in

When the “Sub-Prime Mortgage Crisis” began in 2008, it triggered a global recession. Demand decreased across all industries, but the auto industry was hit especially hard due to vehicles being big ticket items. Even prior to the recession, the high prices of raw materials and fuels, as well as increased pressure from the government and consumers for automakers to build “greener” cars meant trouble for automakers. Within the industry, Canadian and the American auto makers were hurt the most. The strong presence of unions meant that they had a much higher labour cost than their competitors. Also General Motors, Ford and Chrysler, known as the “Big Three” primarily focused on manufacturing pickup trucks and SUVs because of

The American auto industry has faced many challenges throughout the years since Henry Ford’s first

The automobile industry throughout the years has been a major player in the economic structures of society. The industry as a whole has contributed to all areas of micro, macro, and international economics in a way that not a whole lot of industries have. The automobile industry was not created overnight by a single inventor. Numerous companies have come and gone throughout the history of the automobile. Governments have bailed numerous corporations out, the industry has unemployment due to outsourcing, and the economic profits of this industry have major factors in decision making throughout an economic landscape. There have been numerous mergers and acquisitions over the years, to name a few: Studebaker and Packard in 1954, Daimler

The United States spends billions of dollars in the automotive industry to close the gap between vehicle over-production and the need for auto dealers to constantly grow sales in line with the over-production. Auto dealers operate in a “survival of the fittest” environment, which has led to a rise in the consolidation of auto dealerships.

The financial crisis starting in 2008 and the following recession hit hard the US auto sector. Traditional car makers had to realise that substantial changes were needed in order to maintain their strong position in the

The United States Automotive industry has been dominated by five major auto manufacturers: GM, Toyota, Ford, Chrysler, and Honda. As globalization increases the domestic automotive market (GM, Ford, Chrysler) suffers from foreign competitors. Although with high entrance barriers the market suffers little to none from new entries. There are several reasons for this the largest being capital. It takes a lot of capital to obtain manufacturing plants, raw materials, as well as to hire and train employees. PASTEL Analysis

During the 2000s there was a growing number of obstacles or “road blocks” that nearly crippled the automotive industry. The United States was in the greatest economic recession since the Great Depression and it was taking a toll on the automotive industry. With the prediction of the auto industry going under, the big three (Chrysler, GM, Ford) met before congress to ask for government aid. After the meeting with congress the ford motor company decided they would survive on their own.