The U.s. Automotive Market

During 2006, the economy was expanding and GDP was growing. Ford enjoyed high sales volume, but still experienced losses. A vast amount of these losses were due to Ford reorganizing their company structure and shrinking. In 2007, GDP growth reached its peak, while interest rates and inflation remained stable. Although these indicators normally demonstrate a strong economy, the automobile industry was actually struggling due to the spike in gas price. The big three US automakers (General Motors, Ford, and Chrysler) were in the brink of bankruptcy and had petitioned

Much like any manufacturing, the American auto industry is directed to global competition. As declared beginning, the car was first developed in Germany and France. In 1995, the United States and Japan made a business contract that supplied more seller outlets and provided natural replacement part is selling in each other’s countries, (Nauss 1995). This makes auto components and replacement auto pieces for Japanese cars manageable to reach in the United States and vice versa. Not only does this supply for more USA works, but it more supplies for more Japanese operates in the car industry,(Nauss

The automotive industry is one that has proved to be lucrative, which may compel more competitors to partake in it. Construction of overseas facilities and the merging of large multinational automakers have attributed to the globalization of the auto industry (Esterhuizen, n.d.). This globalization of the industry increases competition, putting pressure on domestic companies to compete with their foreign counterparts. This pressure may lead many big companies to merge or establish partnerships with other companies. In fact, “The Big Three” of the United States (General Motors, Ford, and Chrysler) have done so with European and Japanese manufacturers. Merging may be done to diversify a company, grow its market share, increase its supply-chain pricing power, or even eliminate competition (Renaud, 2006). Whatever the reason,

European luxury imports took market share away from the Big Three at the top targeting their most expensive offerings, and Asian imports at the bottom by offering practical, inexpensive cars. GM made a desperate attempt to fight back by announcing a new, separate headquarters in NYC for its luxury brand, Cadillac with the goal of “pursu[ing] opportunities with more focus and clarity” (O’Leary and Welch). Nevertheless, the trend of increasing imports has only gained momentum, with the average consumer having access to cars from all over the world. The main Economic implication of increased imports is the decreasing trade deficit and decreasing demand for domestic cars. Throughout the course of the next last 40 years, the Big Three saw their market share plummet over 30%. This steep drop off is partially offset by the steadily increasing number of vehicles on the road in the US, but it still signifies adverse economic benefit to domestic producers. In 2009, GM and Chrysler filed for Chapter 11 restructuring due to their falling profits and business woes.

In a present day of global warming, environmental issues, labor unions, and other impacts, the automobile industry is in an era of instability and change. Ford Motor Company has been traditionally considered one of the "Big Three" in the auto industry, but they are not adapting as well as hoped to the changing industry, and will have to strategize to survive in a struggling industry.

Just like the other industries such as apparel, electronics, and consumer goods, the automobile industry has accelerated its foreign direct investment, cross border trade and global production. The automobile industry has increased outsourcing and bundled value chain activities in major supplier chains. As a result, more developed countries that serve as suppliers have increased their involvement in trade and FDI. With these increased supplier capabilities, large national suppliers have become global suppliers and are now controlling multinational operations. This is because of their increased capability of providing good and services to various lead firms all over the world. The automotive industry has a distinct firm structure. This

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 began in the late 1800 's and grew to be one of the largest of it 's kind in the world. The industry also encompasses many global automobile and auto parts manufacturers across the country. Production rise and fall over the past decade has dropped the American Automobile Industry into the number two spot in the global market just behind China. The Big Three,comprised of General Motors, Ford Motor Company, and FCA US(formally known as Chrysler), were the primary owners of most of the manufacturing facilities in the United States.

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.

Since it’s inception in the 1900’s, the auto industry has become a global economic powerhouse and juggernaut of cultural influence. In recent decades, the industry has faced various crises and yet has remained one of the most powerful drivers of global economic activity. In the U.S. alone, 1 in every 22 jobs derives from the auto industry (Cutcher-Gershenfeld, J., 2015, para 1). Generally speaking, industry analysts are optimistic about the U.S. market and less so in other markets (Strategy&, 2015, para. 3).

1 BACKGROUND 1.1 Ford Motor Company Ford was the pioneer of the motor vehicle, just over 100 years ago. Today, Ford Motor Company is a family of automotive brands consisting of: Ford, Lincoln, Mercury, Mazda, Jaguar, Land Rover, Aston Martin, and Volvo, employing 350,321 (Yahoo Finance) workers in more than 200 countries. 1.2 Motor Industry The American oligopoly in the motor industry, consisting of Ford, General Motors and Chrysler, has suffered from poor financial results recently. As reported by www.guardian.co.uk (16/06/03), “the big three US car-makers are wrestling with the combined effects of over-capacity, growing competition from Europe and Japan, huge pension and health care costs, and a damaging increase in

Increasing globalization in the automotive industry is changing the way of traditional partnerships. Ten years ago, it was questionable to pursue business in markets such as India and China because political and business conditions were not conducive to direct foreign investment (Emerging Markets, Emerging Opportunities, 2012).As a result, many automotive

The United States Automotive industry has been dominated by five major auto manufacturers: GM, Toyota, Ford, Chrysler, and Honda. As globalization increases the domestic automotive market (GM, Ford, Chrysler) suffers from foreign competitors. Although with high entrance barriers the market suffers little to none from new entries. There are several reasons for this the largest being capital. It takes a lot of capital to obtain manufacturing plants, raw materials, as well as to hire and train employees. PASTEL Analysis

Ford, Toyota, Honda, Volkswagen, and Daimler Chrylser, all of that work in a competitive global

The success of Asian automakers on the international market can be attributed to the pricing range of their products. Most vehicles produced by Asian companies have medium prices that make them affordable for a larger market segment with medium incomes. They are also able to address customer segments with lower incomes with car models that provide certain levels of quality. In order to be able to produce these cheaper models, Asian automakers prefer to reduce certain comfort and aesthetic issues. In addition to this, these producers have developed strategies that allow them to increase cost efficiency. This objective is reached by improving supply chain management.