Environmental Challenges Facing The American Automotive Industry 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’

Introduction Automobile usage has increased in America and elsewhere in the world. In a research done by Sutherland, J., et al. (2004) “The US has a contributed to 200 million passengers in cars and light truck over the past few years. Further in 1990, studies showed that US cars increased six times faster than human population. The leaders in the automotive industry must adopt some key elements to ensure success in this fast-moving environment. They must invest in knowing their markets, building brands, adapting product strategies and taking long-term view on their goals and objectives. This paper outlines some of the key factors which should be considered. Environmental factors automotive designers and engineers have always said the main threats in the American Automotive industry are the environmental factors such as fuel economy and the clean air regulations. Automotive Emission posed different problems than manufacturing discharges such as coal smoke. Increased fossil-fuel emission has resulted from the million car increase. Irritation smog, which is comprised of carbon monoxide, hydrocarbons, sulfur oxide and other various chemical mixtures are cited in major cities such as Los Angeles. These auto emissions are also said to cause headaches, visual pollutions, contribute to lung cancers and other respiratory disease. In the end, the engineers have designed cars that are better environmental performers, cost effective and fuel efficient to reduce the environmental

The globalization of the world has made business markets even more competitive. The auto industry in The United States has not escaped this. “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. The total market share of General Motors fell from 28.2% in 2000 to 17.6% by 2014. The other two of the Big Three car manufacturers also lost U.S. market share during this same period. Ford fell from 24.1% to 14.7%. Fiat-owned Chrysler now holds only 12.7% after having 15.7% of the market in 2000.” (2) It is undeniable that a global market has infiltrated the US auto industry. There are many factors that make a foreign car appealing to US consumers such as: new and unique products, brand appeal, new technology (fuel efficient engines), safety features, allegiance to birth country, product quality and reputation, reliability, cost, and the list goes

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

Globalization brought upon many changes to the American Automotive Industry in 1975. Increasing demand for import automobiles and the Energy Policy and Conservation Act served to be a real threat to the Ford Motor Company, American Motors, Chrysler Corporation, and General Motors. Out of these four manufacturers Chrysler was affected the worst by the industrial change, as they required a federal aid and required brand /management changes to revive themselves. Globalization formed a more competitive market in the United States during the 1970’s due to the changing emissions standards. The American Automotive Industry had to adjust to the new emissions standards from the Clean Air Act of 1970, and the fuel economy requirements of the Energy Policy and Conservation Act, all while building cars that attracted to American consumers.

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.

The last several years were also tumultuous for the U.S. auto industry. After dominating the market for decades, American automakers had grown complacent about product development. At the same time, rising gas prices and uncertainty about the economy caused consumer preferences to shift from SUVs to more fuel efficient vehicles. Foreign competitors entered the U.S. market offering more reliable, higher quality and more fuel efficient vehicles at a lower price and began to steal market share away from American automakers. In order to remain competitive, U.S. automakers need to focus on increasing production efficiencies and developing innovative product offerings. Firm Analysis

The American Auto Industry has evolved for many decades with pioneers such as Ford Motor Company. The United States Auto Industry was once upon a time a global leader in the automotive industry but due to knowledge and skills acquisition by other automobile manufacturers such as Toyota, the once American Auto Industry leadership has been surpassed. I will give discuss this following paragraphs.

The American automotive industry has expanded since uprising in the early 1900s. “Americans dominated the industry in the first half of the twentieth century, although Germany and France perfected the blueprint for the modern automobile. Henry Ford initiated 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).” The automotive industry has always been among the leading industries for environmental aspects and hazards around the world, in the United States especially. These issues include; global completion, new technology for powering the product, the effect

The United States automotive industry is the largest in the world. Thirteen automotive manufacturers have assembly plants in the United States, as well as a growing number of suppliers and dealerships. From 2008 to 2012, automotive manufacturers in the U.S. produced an average of over 8 million vehicles annually (SelectUSA, n.d.). In addition to the big three American automakers – General Motors, Ford, and Chrysler – Honda, Toyota, Nissan, Hyundai-Kia, BMW, Mercedes-Benz, Mazda, Mitsubishi, Subaru, and Volkswagen all manufacture automobiles in the United States (SelectUSA, n.d.).

The American Auto industry is well known world wide with many manufacturers carving a path for their business and brand, most becoming household names for millions of people in many countries. Despite the large size of these conglomerates, they too are affected by outside influences from multiple sources. Pressure from the customers, competition, Government and environmental groups

market share of General Motors fell from 28.2% in 2000 to 17.6% by 2014. The other two of the Big

The United States automobile industry is one characterized by incumbent behemoth corporations whose distribution channels span the world. Companies like Toyota, General Motors, and Volkswagen form entire segments of their respective countries’ economies and have dominated the auto industry for generations.

Over the years, the U. S. auto industry's market has been experiencing fluctuations due to many reasons including: price, quality and foreign competition. General Motors Corporation (GM) which had been the leading car and truck manufacturer had been experiencing declining market share and facing stiff competition from both U.S manufacturers and foreign imports such as the Asian auto producers that included Toyota, Honda and Nissan. The main reason for increased foreign competition was that foreign cars were more fuel efficient, smaller, less expensive, and often more reliable than their American counterparts.

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