The U.S. Automobile Manufacturing Industry

Congress began to hold high-profile hearings on automobile safety in 1965. In 1966, President Lyndon B. Johnson signed both the National Traffic and Motor Vehicle Safety Act and the Highway Safety Act into law. The two bills gave the federal government authority to set and enforce safety standards for vehicles and roads. The NTMVSA was the first legislation mandating federal safety standards for motor vehicles. Although the safety standards in the NTMVSA were watered down in response to industry lobbyists, it required important safety features that the current generation of car drivers would never expect to be absent from a vehicle: “seat belts for every passenger, impact-absorbing steering wheels, rupture-resistant fuel tanks, door latches that stayed latched in crashes, side-view mirrors, shatter-resistant windshields, windshield defrosters, lights on the sides of cars as well as the front and back, and ‘the padding and softening of interior surfaces and protrusions.’” (History.com)

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 automobile industry has brought the United States economic growth due to the impact that automobiles have made on society. There has been a plethora of jobs associated with the auto industry, including manufacturing, auto repairs, insurance, and the development of roads, sales, and auto parts to enhance vehicles. Cars, trucks, and SUVs’ have become a way of life for people and have made an additional economic impact by becoming the primary means of transportation for consumers to commute to and from work, vacations, and travel between destinations. Most family households live on a budget and they must make the decision of how much of their budget they can allocate to transportation costs.

bikes, trains, or to carpool to go to work or to school. This is a big threat

General Motors, along with its competitors, are part of the Automotive Manufacturer (Major) industry of the Consumer Goods economic sector. Companies in this industry make passenger cars and light trucks, as well as chassis for those vehicles. Demand is driven by employment and interest rates while the profitability of the individual company depends on manufacturing efficiency, product quality, and affective marketing. Large companies have economies of scale in purchasing and marketing while smaller companies can compete by focusing on specialized markets. The U.S. industry alone is highly concentrated with the top four companies account for about 75 percent of sales.

American’s are in love with the automobile in all its shapes, sizes, and utility. With a network of roads exceeding 4 million miles, cars are a way of life for more than 91 percent of U.S. households in 2009, according to U.S. Department of Transportation, Bureau of Transportation Statistics [1]. In 2014, Americans purchased over seven and a half million passenger cars [2], reports Statista on the automotive industry. So with all those roads and all those households needing cars, and all the cars being sold, the automobile industry is massive.

The automotive industry is inherently interesting: it is massive, it is competitive, and it is expected to

The American automotive industry is one of the largest parts of the national economy. In 2009 it made up 6.6% of the entire American workforce, employing 880,000 individuals.

The US Auto industry is facing the reality that new generations are not the same generations on which they built their empires. As information and global awareness are more prevalent than ever before, the consumer only wants to do what feels right to them, not what they have been told to want, and statistic show that the things the new consumer is looking for above all, is the lower cost of owning a car, followed fuel efficiency and how environmentally friendly it is.

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

challenges, however, are the most difficult ones to face and overcome. Some environmental issues that

Today’s auto industry is characterized by competition, both global and local, as well as a definite drive to make faster, cleaner, and more fuel-efficient vehicles. American automobile manufacturers have responded to the global competition by aiming to be more productive, and improving their cars in order to compete with the market overseas. What kind of competition are the American auto companies facing from foreign markets?

One of the defining features of globalization is the clear line of separation which this has drawn between preferable venues for production and sensible outlets for retailing. The automobile industry is one sector which has been especially impacted by this dichotomy, primarily because of the high cost of its primary retail output and the need to reduce the costs which are required to deliver it to market. It is thus that auto manufacturers have increasingly used a specific set of determinants for where to locate factories or, alternately for destination countries in which to commission existing factory facilities.

The American Auto Industry has flourished since the early 1900s; it is one of the industries that represents one of the largest segments within the U.S economy and forms the core of the nation’s industrial strength. Americans dominated the industry in the first half of the century. By the 1960s the car market was flooded by the big three (Chrysler, Ford and General Motors) whose manufacturing relied heavily on promotions and model changes to boost their sales (Foner & Gratty, 1991) However the blue print for the modern automobile was perfected by Germany and France in the 1800s.

Today, the automotive industry is one the top profitable industries in U.S. and all around the world. More than 1.5 million people involved in different segments such as engineering, designing, ordering, sell, and marketing. As a result of this statement, automotive industry has huge effects on employees, customer support, jobs vacancies, revenue and finally GDP which is the most important part of the economy for any countries (Statista Portal, 2016).