The American Automotive Industry : An Environmental Analysis

Given the current economic climate, I think the automotive industry is going to be faced with a multitude of economic challenges in the next five years. As an oligopoly market, the auto industry is highly dependent on strategic decision-making, and the demand for dynamic innovation and supply at decreased-cost levels. Competition, possibilities of turning substitutes into compliments, and shifts toward higher demand in services are seemingly leading factors that face the current automotive industry in the immediate future. But first, we should not ignore the political forces at play within the market.

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.

With the recovery of economy, the world’s automobile industry has been growing steadily over the past few years. According to Bloomberg, the US automobile sales climbed from its depth 10.4 million in 2009 to over 15.6 million in 2013. Furthermore, industry analysts predict that the sales will

Global competition from Chinese auto manufacturers has adversely affected the American auto industry. Chinese manufacturers like Toyota have advanced rapidly and are now able to mass produce and sell cars at a cheaper price than some of the American auto manufacturer. Besides, Toyota has

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

European and Asian car manufacturers, many of whom build their vehicles in the United States.

The American auto industry was once a shining example of the American Dream and the innovations of a growing industry. The 2009 recession tested the strength and morale of the industry and it has answered back with growth in the last few years. This paper will discuss the global competition, new technology, environmental impacts, consumer opinions and a SWOT analysis of the U.S. industry.

even today. Only about 14 to 30 percent of the energy from the fuel in your car is converted to

The auto industry has many challenges within the United States. As the market minimizes it becomes increasingly difficult for auto manufacturers to circumvent the economic downfall of the market. Newer technologies threaten the industry as consumers demand better fuel efficiency and are becoming more environmentally conscientious. With the ever involving consumer auto makers must drive sales in a creative manner than benefits all.

Today, the modern global automotive industry encompasses the principal manufacturers, General Motors, Ford, Toyota, Honda, Volkswagen, and Daimler Chrylser, all of which operate in a global competitive marketplace. The Automotive Industry. 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. Ford fell from 24.1% to 14.7%. Chrysler now holds only 12.7% after having 15.7% of the market in 2000. High labor costs, product lines that emphasized large vehicles with significant gasoline use and a looming global recession caused a crash in U.S. automaker profitability in 2008. American car manufacturers were struggling to compete against better, more efficiently manufactured products from overseas companies. As of 2015, Toyota earns more than GM, Ford and Chevrolet combined.

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

and a significant contributor to the strength of the US dollar. Although the auto industry did not

Contributing 3 percent to 3.5 percent to the overall Gross Domestic Product, the automotive industry is essential to the United States’ economy.1 The automotive industry would critically affect our national economy if it ceased to exist. In 2008 through 2010, the automotive industry suffered a crisis. Many things lead up to the crisis, putting the economy into an unstable condition and putting distress into the minds of the American people. This forced some of the country’s automakers to go into bankruptcy, causing a fall in the workforce. Eventually, the crisis was solved, and the economy returned to its stable state. This whole disaster started through one event. Fueled by the 2008 recession, the automotive industry suffered a crisis that hurt the United States’ national economy.

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.