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How Globalization has Affected the American Automotive Industry

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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. These new requirements caused many Americans to lose their curb appeal for larger, higher output vehicles. The Japanese and European imports were lighter and more fuel efficient, so naturally they were better suited to meet new emission requirements. As a result imports took up 18% of cars sold in America, a share almost 20% higher than previous years, but none were actually made in America. In fact imports were so successful that Japan had to limit their import control to protect the U.S. Automotive industry while it recuperated. However the production of transplants vehicles rose from 1.4 percent of the market to 16 percent. The Japanese,
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