Challenges of the Automobile Industry of USA Essay

Global competition in recent years has had a great effect on the American automotive industry. More efficient cars being developed overseas posed a threat to local companies’ market shares (Investopedia, 2015). Market shares of largely well-known companies such as General Motors, Ford, and Chrysler all suffered losing between three and ten percent of their previously held market shares between 2000-2014 to foreign competitors (Investopedia, 2015). For decades, the United States had the best technological advances in the industry and it was very difficult for competition to survive. In response to this, companies overseas invested significant amounts of money into researching new innovations and ways to produce better automobiles than the United States (Investopedia, 2015). Also, because of the difference between currency values, the cost of labor in other countries is lower than here. This allows foreign companies to be able to sell their products at lower costs and attract customers through undercutting their competitors’

Several factors have affected how the American auto industry now positions itself on the world market, and big changes have been made to reflect this new direction. The introduction of new technologies in vehicles, the growing market for cars in new developing markets, the impact of the industry on the environment, legislative responses and demands, as well as the increased expectations from consumers, are some of the factors. More international cars are being designed, manufactured and bought by American consumers and exported to foreign markets today than those exclusively manufactured by American companies, redefining the American auto industry, while having a positive impact on its economy. International brands accounted for 45% of total sales in the U.S. in 2013 and have now risen to 59% of the market, and continue to grow. While the amount of American cars has decreased in the local U.S. market share to international ones, the increase of foreign car production on U.S. soil has had the effect of creating new jobs for Americans both in the auto industry as well as in related new industries. The industry has seen huge growth numbers in the last few years with more growth expected.

Global competition in the industry: There are many vehicle manufacturers throughout the world. A few common vehicles seen in my state are GM, Chrysler, Lexus, VW, Honda, Toyota, Ford, and Jeep. Each company tries to stay ahead of the rest. Toyota, based in Japan, for example was one of the first businesses to introduce hybrid vehicles. This was a direct result of the oil embargo. After having three oil shortages automobile manufacturers are creating more fuel efficient, environmentally friendly products.

Like every other industry, the automobile industry in the United States is susceptible to competition. The biggest global contender to the US Automobile Industry is the Japanese Automobile Industry. Trade agreements have been in place since 1995, that make replacement parts for Japanese

This report will focus on the environmental challenges that the American automobile industry is facing today. First, we will discuss global competition for American automobile manufacturers. Next, we will look at new technologies that are revolutionizing the automobile industry. Then, we will consider the effect of automobile emissions on the environment and what the US government is doing to try to regulate this. Finally, we will discuss consumer opinions about the “American-made” automobile.

While the American auto industry is solidly “the big kid on the block”, the rise of affluence in other regions of the world such as China and India have created an entire new market for automobiles. The native auto makers in those countries such as the Chinese “Chery” obviously have the upper hand in targeting customers in those regions. The American Company Chevy had first hand experience with the pitfalls of trying to compete in foreign countries when it introduced the Chevy “Nova” to South America. The urban legend is that the marketing team failed to realize is that the cars name “Nova” translates loosely into Spanish as “No Go” which is an unfortunate name for a model of car. It sold poorly.

The Auto Industry in the United States has flourished ever since it’s revolution in the early 1900s. “Although the blueprint for the modern automobile was perfected in Germany and France in the late 1800s, Americans dominated the industry in the first half of the twentieth century. Henry Ford innovated mass-production techniques that became standard, with Ford, General Motors and Chrysler emerging as the “Big Three” auto companies by the 1920s (Foner & Garraty 1991).” Henry Ford’s focus was to produce an automobile that could be accepted by middle class Americans. The American automobile industry is subject to global competition like any other industry. As stated earlier, the automobile was first perfected in Germany and France. In 1995, the United States and Japan made a trade agreement that provided more dealer outlets and allowed easier replacement part selling in each other’s countries (Nauss 1995). This makes auto parts and auto-replacement parts for Japanese cars easier to access in the United States and vice versa. Not only does this provide for more US jobs, but it also provides for more Japanese jobs in the auto industry (Nauss 1995)! But furthermore, it increases the global competition. “Japanese automotive manufacturers include Toyota, Honda, Daihatsu, Nissan, Suzuki, Mazda, Mitsubishi, Subaru, Isuzu, Kawasaki, Yamaha, and Mitsuoka. Cars designed in Japan have won the European Car of the Year, International Car of the Year, and World Car of the Year awards many

As cited by the Bureau of Labour Statistics, ‘the automotive industry includes industries associated with the production, wholesaling, retailing & maintenance of motor vehicles’. This industry has had an immense impact on the domestic industry. Nevertheless, with the 2007- 2008 recession, new car sales decreased rapidly reflecting the overall decrease in consumer spending. Thereafter with the aid of government, in early February, 2012 the American Automotive Industry made a brisk recovery, making American automotive companies reign as the biggest & most profitable & it incrementally grew year after year.

The American auto industry has faced several challenges in the recent years. GM was the

In the mid to late 2000’s, the automotive manufacturing industry within the United States found itself in major trouble. This was due to a large scale decline in the US economy, as well as a loss of interest in the domestic vehicle production. This lack of interest stems from the manufacturers lack of technology, fuel efficiency, comfortability and drivability as compared to foreign automotive manufacturers. This decline in the economy along with the decline in interest from the domestic consumers led the American manufactures to the brink of bankruptcy. In fact, the largest automotive manufacturer in the United States at the time, General Motors, found itself in such extreme financial trouble, the company had to seek help from the

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.

Competition in the automobile industry is hard to distinguish since most all of the major global automotive makers have and do produce their vehicles in U.S.

The USA has an active automobile industry, and this is attributed to the availability of a market for the cars. “In 2015, the auto sales record were broken in the USA, a new record of 1,641,913 vehicles were sold up from 1,507,229 in 2014. Ford Motor Co. was among the top sellers with their sales standing at 237, 606” (Automotive News, 2016). The quality of automobiles in the USA has been improving thanks to the policies adopted by the government and the competition between players to produce quality vehicles.

After the crash of 2008 the automotive industry in the United States of America has had to essentially rebuild. General Motors removed several cars from its line up to include the entire Pontiac line because the government wouldn’t bail them out otherwise. Toyota took over the top spot from GM for many years (2013) with its sales and its quality, but even they found hard times with a slew of recalls and bad press in late 2009 early 2010. With the “smaller” auto companies taking a much larger chunk of the market the Big 3 had to step up and change the game. This weakness let companies like Scion and Hyundai grab a bigger pie of the pie.

The characteristics of the global motor vehicle industry are a boom in certain places and a bust in others all due to economic conditions in different nations. Four years after tow of Detroit Michigan’s big three went into bankruptcy American car makers are going “full throttle” with sales in August hitting an annual rate that if substantiated can take them back over 16 million and that is a rate that was last hit before the economic crisis and 80% higher than 2009 when GM and Chrysler went into bankruptcy. The opposite is happening in Europe being in its sixth year slump now and with a weak economy, high petroleum prices and an aging