Downfall in Sales in the Automotive Companies in the US and Canada

583 Words2 Pages
bulb-icon

Recommended: Impact of the automotive crisis on ford

There is a huge downfall in sales of three big automotive companies in USA and CANADA from 70 % in 1998 to 58% in 2008.These three automotive biggies asked for a help of $50 billion to avoid their bankruptcy and to meet health care benefits, salaries and pension plans. The main reason for this is the drastic rise in fuel prices. Ford faced criticism due to its high product range, superior quality and higher salaries to the employees, bank job programs. Recession in 2008 added much troubles to Ford. Due to recession the raw materials for manufacturing vehicles increased dramatically. Ford tried to manufacture large inefficient gas users, which are brought only by fewer people in the country. Ford manufactured these as they are high profit earners when compared to small fuel efficient cars. The profits earned by selling 10 small cars is same as the profit achieved by selling one SUV. Suddenly the petrol prices begin to rise by 4% and people stopped buying those fuel inefficient cars. This lead to discouragement in buying large pick up trucks and sport model cars. At the same time Japan...

Show More
Related

  • The U.S. Automobile Industry

    2538 Words  | 6 Pages

    This paper will focus on the future of the U.S. Automobile industry as the United States recovers from the worst recession we have experienced in the past 75 years. I will provide information on the following topics pertaining to the U.S. automobile industry:

    Read More

  • Christianity and the Economic Impact of the Automotive Industry on Canada

    2560 Words  | 6 Pages

    During the Great Depression, every work place was hit hard and many were out of work. The demand for vehicles declined, and the automotive industry took a hit. Once the Second World War began, the automotive industry was given a push in the right direction, and their vehicle production flourished...

    Read More

  • U.s Auto Industrys Market Share And Fluctuations

    957 Words  | 2 Pages

    below 30% in 1985. In response to this sudden drop in its share of the market GM

    Read More

  • Alan Mulally's Restructuring of Ford Motor Company

    1166 Words  | 3 Pages

    Growth in Ford Motor Company created problems within the company. Poor quality plagued every line of vehicles produced by Ford. Growth included Ford Motor Company purchasing multiple vehicle brands from other companies in different countries. Operating one company that contains smaller companies can create inter organizational rivalry. Rivalry sent each company in its own direction and drained money from Ford Motor Company. Further complicating the issues at Ford Motor Company was the Great Recession.

    Read More

  • A Very Brief History of the American Automotive Industry

    1487 Words  | 3 Pages

    Purchasing a car is one of the biggest and most important decisions that someone will make during their lifetime. Over the past several years, the prices of a vehicle have increased significantly due to the rise of inflation. Economists compare averages of vehicles to calculate and determine the cost of every vehicle that ends up on the car lot. To determine the cost they interpret all the above information and include everything from the cost of making the vehicle to the time of selling it. In the long run, the demand for vehicles is inelastic because they become a necessity for many people. However, in the short run, the demand is elastic because the purchase of a new vehicle can be put off for a while.

    Read More

  • Ford Pinto Case

    1390 Words  | 3 Pages

    Consumers were shifting their focus to cheaper, smaller, and more gas efficient Japanese and German imports; there were more than a million imports sold and registered by 1970. These Japanese and German competitors were starting to dominate the small-car segment of the auto industry. American car companies knew they had to respond to keep up with this growing car sector.

    Read More

  • Essay On The Model T

    1466 Words  | 3 Pages

    Model T’s were everywhere in America, even long after Ford stopped production in 1927. (Henry) While Ford was the number one brand, selling the most cars throughout the early 1900’s, the Model T created a new industry that is distinctly American; the auto industry. Three manufacturers, Ford, General Motors, and Chrysler dominated the American auto industry, and all three companies still produce cars today. The Model T gave birth to the competitive auto market. To this day, car companies in America are constantly racing to innovate, improve, and outsell their competitors. Manufacturing of cars “became the backbone of a new consumer goods-oriented society. By the mid-1920s it ranked first in value of product, and in 1982 it provided one out of every six jobs in the United States.” (history –idk yet) The demand for cars also resulted in a booming petroleum industry, and a high demand for metals, like steel. ( History idk yet) Furthermore, with so many people driving cars, construction of roads was necessary. The popularity of automobiles set off a chain reaction that created new opportunities all across the country. All sections of the modern automotive industry, from marketing to manufacturing, as well industries like petroleum refining, steel production, and road construction, can trace their beginnings to the Ford Model

    Read More

  • Jose Ignacio Lopez De Arriortua Case

    1661 Words  | 4 Pages

    General Motors is one of the world's most dominant automakers from 1931. After 1980s economic recession the main goal for automobile companies was cost reduction. Customers became more price-sensitive. Also Japanese competitors came into market with the new effective system of production. So market was highly competitive and directed toward price reduction. The case states that in 1991 GM suffered $ 4.5 billion losses and most part of the costs of manufacturing was due to purchased components. GM NA hired Lopez in order to find the way from "extraordinary" situation and reduce costs.

    Read More

  • Ford Pinto

    801 Words  | 2 Pages

    As presented in the case study we know that Ford was losing the market to the cheap Japanese cars being produced. As a corporation that

    Read More

  • Supply and Demand Determinants in the Auto Industry

    514 Words  | 2 Pages

    The American auto industry is in a crisis, their vehicles are not in demand and they need government bailouts to keep their businesses afloat. American vehicles are not on demand because people want fuel-efficient, the car companies that are not at the point of bankruptcy, longer lasting vehicles, and hybrid cars. The American car companies are at a point of bankruptcy and people don’t want to buy cars from a company that may not be there in a couple of months. The foreign car companies are doing well and they much more dependable now that we are in an economic crisis. American cars are not fuel-efficient, not as long lasting, and don’t make many hybrids, so this affects their business negatively. I got some ideas that will make American car companies be on top of the industry again.

    Read More

  • Automotive Industry Analysis

    794 Words  | 2 Pages

    The automotive industry is one of the most important sectors of the economy for every country in the world. It involves a large number of corporations and institutions engaged in the manufacturing process of motor vehicles including designing, developing, manufacturing, marketing, and selling. It contributes to the global economic growth by generating a significant return and creating a ripple effect on supporting the supply chain as well as providing job opportunities for the skilled workers (ACEA, 2016).

    Read More

  • Impact Of Climate Change On Automotive Business

    1049 Words  | 3 Pages

    Climate change has been one of the most discussed issues in these modern days. It is prove on many researches that the increase in man-made green house gas emission can significantly affect the climate in the world, on every part of the globe. In the last few years, climate change has become the most researched subject in science. The reason is that because climate change can affect significantly to the earth and it has to be taken care of. In a business world, particularly in Automotive Industry, climate change is also one of the must discussed subject, and because of automobile is one of the factors that produce the most CO2 (Carbon dioxide), it become one issue that force automotive industry to change their product to reduce the amount of CO2 emission.

    Read More

  • Levels Of Planning

    1709 Words  | 4 Pages

    Ford’s production plants rely on very high-tech computers and automated assembly. It takes a significant financial investment and time to reconfigure a production plant after a vehicle model is setup for assembly. Ford has made this mistake in the past and surprisingly hasn’t learned the valuable lesson as evidence from the hybrid revolution their missing out on today. Between 1927 and 1928, Ford set in motion their “1928 Plan” of establishing worldwide operations. Unfortunately, the strategic plan didn’t account for economic factors in Europe driving the demand for smaller vehicles. Henry Ford established plants in Europe for the larger North American model A. Their market share in 1929 was 5.7% in England and 7.2% in France (Dassbach, 1988). Economic changes can wreak havoc on a corporation’s bottom line and profitability as well as their brand.

    Read More

  • Economics of the Automobile Industry

    2412 Words  | 5 Pages

    A vehicle is one of the biggest purchases a person will ever make. Over the years, the prices of an automobile have increased due to the rise of inflation. Due to a price index, the price of an automobile changes over a certain period of time. Economists compare averages of automobiles to calculate the cost of each vehicle that presents itself on a car lot. When all of the above is calculated within the purchase of an automobile, it affects every area of making the automobile to selling the automobile. All of these factors are impacted together for the automobile industry as a whole.

    Read More

  • Automobile Industry In Australia

    872 Words  | 2 Pages

    First, the automobile industry is in the decline period of its life cycle (Whytcross, March 2014) w...

    Read More

More about Downfall in Sales in the Automotive Companies in the US and Canada

Open Document