The United States Auto Industry

The automotive industry has become one of the greatest industries today and is one of the world’s most crucial economic sectors by revenue. All the same, not only does automotive industry develops and manufacture but it also markets and sale motor vehicles globally.

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.

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

The automobile industry has influenced the US society in many aspects. The automotive production on commercial scale started in Europe in 1890’s. At this time, they were only able to produce a few numbers of cars in the market. When the automobile industry started in the US, cars were considered as toys for rich. From 1904 to 1908, about 241 auto-manufacturing firms went into business. One of these firms was Ford Motor Company, led by Henry Ford, which outpaced its competitors in a very short time. After Ford Model N success in the market, Henry Ford was encouraged to introduce his Model T car to the market; after several failed product lines. As a result of its durability and price, Henry Ford innovated one of the most important innovations

The mass production system developed by Henry Ford has significantly changed and affected the American economy. The car production based on assemblying lines has made car prices more affordable. The first car to be produced on a large scale was the Ford Ts. The auto industry had such an impact on the other sectors of the economy because of the need of materials to supply the demand for cars. In spite of the great depression, the American economy went through a period of great prosperity with the auto industry producing vehicles used in the war and the post-war demand for cars. For quite a considerable ammount of time, the American auto industry dominated the sector and more and more people were depending on cars and improved living standards

In the 1990s the auto industry made up 2.5 % of the GNP and employed about 850,000 people. At the time that was about 4.5-5 % of all manufacturing workers (wong, 1990). Then during the early 2000s labor productivity was increasing greatly, but the American auto-makers failed to produce energy-efficient cars for the energy crisis. When the recent recession hit the U.S. automakers had a major setback causing a cut in employment, production, and huge loss in revenue. After the government bailout the industry improved, by 2012 sales, exports, and employment rose to a new high. It’s now 2014 and we are still getting out of the recession but due to government decisions, deals made between companies, and increase in jobs, sales have increased dramatically.

The United States has the largest automotive markets in the world. The United States manufactures roughly 8 million vehicles annually (“How”). Engineers worked with ford to make machines that could produce cars parts that were needed in the vehicles. Early on, Ford was able to produce 2 million Model T’s and sold them for only 260 dollars. Henry Ford was striving to make as many cars as possible with the simplest design, he wanted the cars to be affordable, he wanted to “put the world on wheels” (“Evolution”). Ford soon began to expand around the world, manufacturing, and productivity helped 130,000 hour job salaries (“Innovation”).

The auto industry adopted new globalization trends that could steer the restructuring of global manufacturing in order to meet the challenges of global economies. There was the need to improve on efficiency and maintain a competitive level in the automobile industry. Automotive manufacturers from Asia, Europe, and the US adopted global trends such as integrating low- income countries into the global division of labor. The aim of the automobile industry in adopting globalization was to enable it shift from the economies of scale to the economies of scope. The industry started focusing more on manufacturing capabilities that could enable it meet the increasing marketing demands. The rapid changes in technology-forced automakers

effect the American auto industry are; global competition in the industry, new technology for powering

Automotive industry is also incorporating new technologies. The launch of hybrid engine cars in the recent past is one of the major technological advancement. Many companies are working to produce electric vehicles and looking for another means of fuel for the cars. The automobile industry is constantly changing. Due to the recent global recession, there has been a slowdown in the demand of vehicles and people are moving towards small compact cars which are normally low priced. Many companies which earlier normally catered to luxury segment are also entering this new attractive segment. Global expansion has been the foray of automobile industry since long. Companies started expanding themselves since early 1900¶s. Nissan is also one of the major automobile companies which started its global expansion around 50 years back.

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

The birth of the worldwide auto industry happened in the US. Cars in some form or another had already existed around the world but they were labor intensive to produce and without a supply the market considered them more of an interesting novelty than a must have product. Henry Ford revolutionized the nascent automobile industry with the development of the assembly line to mass produce the vehicles in the US to sell to the world. Since then the US has been one of the leading countries for the manufacture of automobiles until the 1970’s. Since then there has been a marked increase in global competition which has dropped the US to 3rd in annual production of vehicles for 2014 behind China and the European Union (EU).

Chinese automobile industry grew rapidly in the past years, that’s related with the open policy in China government, the fast modernization and development in automotive industry, and other factors. The Chinese automotive industry has been the 4th largest vehicle producer in the world. The Automobile industry contributed to Chain’s total GDP growth nearly 20%, and total automobile sales in China was around 4.45 million, which included 4.39 million made in China. The Chinese automotive industry has two types, one is the domestic one, and the other is the cooperation with international partners. These two types of company domain Chinese automobile industry.

The characteristics of the global motor vehicle industry are a boom in certain places and a bust in others all due to economic conditions in different nations. Four years after tow of Detroit Michigan’s big three went into bankruptcy American car makers are going “full throttle” with sales in August hitting an annual rate that if substantiated can take them back over 16 million and that is a rate that was last hit before the economic crisis and 80% higher than 2009 when GM and Chrysler went into bankruptcy. The opposite is happening in Europe being in its sixth year slump now and with a weak economy, high petroleum prices and an aging