What Are The Economic Factors That Affect The Automobile Industry

Due to the age of technology, buyers have an easy access to pick and choose for their cars. The use of internet to look for cars are not only impacted the car companies in United

If you ask the people probably in the United States what type of car they like, they would say a sports car over an economical car. When motor vehicles were built in the late 1800s, they were made more for functional than for aesthetically pleasing reasons. As the years passed, the people fell in love with their cars. They were looking for ways to improve the miles per gallon (mpg), horsepower and the exterior/interior of the car. The motor industry grew bigger to accommodate consumers’ preferences. Today, some people say that the speed and power of the car is not as important as the safety and expense of the car. At the end of the day people see that these two classes of vehicles are cars that people drive to go to the place they want to go. Although people with sport cars and economical cars have similarities, those with sport cars tend to be viewed more negatively than those who have economical cars.

The automobile industry is a capital intensive industry, the players in the industry need high capital expenditure in order to maintain their market position, but the expected returns in the future is quite high. The industry analysis can be carried out under the following heads:

The automotive industry was the most adversely affected in the crisis. The effects of the Great Depression also set the stage for another huge moment in the American automotive industry. During the depression, automobile companies had to make financial sacrifices to stay in business, and the working conditions of their employees worsened. Hours got longer, pay cuts were rampant, and strikes and walkouts became worse. This would lead to eventual unionization of the automotive workers in the late 30s and early 40s. The formation of the UAW in 1935 and its huge growth in subsequent decades drastically changed the landscape of the industry for both auto companies and their workers. When the depression ended, there was a large increase in replacement demand. More families could afford to purchase cars, and those who already had them were looking to upgrade to newer models.

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.

In 1769, the first automobile, a steam-powered carriage that would carry up to four people at two miles per hour, was created. Years pass as gasoline engines, wheels, and a steering device were added to the automobile, which began to make it useful but expensive (“The Invention of Automobiles”). They were hand-crafted at this time, therefore making it unaffordable. Until Henry Ford introduced the assembly line in 1913, automobiles remained expensive. His discovery of the assembly line turned the hand-crafted machines to mass-produced automobiles. Since automobiles were being mass-produced, the cost for assembling a single car dropped low enough for it to be affordable to many families (“The Invention of Automobiles”).

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.

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 invention of the automobile completely changed life as we know it, and now almost every job relies on this amazing invention. The first practical automobile was invented in the twentieth country by Henry Ford. The Model T sold for $490 in 1914, one fourth the cost of the previous decade. The invention of the practical automobile caused a boost in the economy, increase sociality, and cause the government to introduce changes.

In recent years, the global recession has made a huge impact on the company cash flows and its financial situation. To sustain as a global leader in the highly competitive automobile industry the GM needs to have its own strategic plan to produce the next generation of vehicles and it has got no time to delay. This is a crucial time for automobile industry with many threats, but opportunities as well. The company has to choose the best "opportunities" to overcome the "threats" and "weaknesses" using its "strengths". The next several years will redefine

This paper is reference to provide a draft of a complete research project. So, I provide details for car industry, specifically Al-Futtaim organization. I will analysis the SWOT for Al-Futtaim Company and I will show in issues and challenges. For that, I can found Suggestion for the research. Moreover, I will identify at least three relevant CLOs from semester 7 and 8. My organization for my research is Al-Futtaim Company. The company founder is Majid Al-Futtaim; he has many companies and projects like City Centers, hotels, Emirates Mall, Carrefour and others. I will talk about Al-Futtaim Company which is for cars. It is a big company in the UAE and they have many branches in GCC and Greater Middle East, Australasia, Africa, South East and North Asia and Europe. They established in 1930 until now and they are famous organization.

India is the 4th largest economy by ppp index and growth in urbanization is further increasing the sales of automobiles.

As income of people is rises and once the economy gets stable, the demand for automobiles will also increase.

A second point of consideration relating to the intensity of rivalry within the industry was the level of industry demand. “Demand declines when customers are leaving the marketplace or each customer is buying less” (Hill &Jones, 2012, p. 62). This was the case in 2009 in many developed nations due to the recession, which was marked by job loss, credit problems, and high gas prices that increased the demand for fuel-efficient vehicles or left consumers unable to purchase vehicles altogether. At the same time, growth was expanding in China and some other developing nations, which opened the doors for automobile companies in these countries to expand at home and