Challenges Facing The American Auto Industry

861 WordsMay 12, 20164 Pages
The auto industry has faced many challenges in the past years. The competition is now stronger than ever, all car manufacturers have been competing to be the number 1 in the market. At the same time, the growing concern of Global Warming has force the industry to reinvent itself and find ways to be more sustainable. Equally important, is the yearly advances in innovation that had made it harder to keep new vehicles up-to-date on the latest technology. For all this reasons, the car industry struggles to maintain customer satisfaction. In this essay, I will touch each one of the points on the challenges facing the American auto industry. The first point is global competition. “Global competition resulted in less market share for U.S. car manufacturers and threatened company profits as more foreign brands entered the U.S. market” (Investopedia, 2015). The number one reason for this is the cost of manufacturing vehicles on American soil as labor is more expensive than manufacturing overseas. For this, operating costs are higher for American automakers than for foreign automakers. Ironically, American vehicles are seen as the cheaper, less reliable versions of their competition. There’s also a sense of high status in European vehicles that their American counterpart haven’t been able to reach as European cars are thought as the most luxurious cars on the market. The one American brand that has gained name recognition is Tesla. This brand is seen as more luxurious, sophisticated
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