The American Automobile industry has been at the forefront of many great innovations over the years and provides a multitude of products that serve many different uses in today’s society. The Alliance of Automobile Manufacturers estimate that the industry is responsible for 7.25 million jobs in the USA.
The strengths of the US Automotive industry are primarily in its brand recognition and the competitive advantage it holds in the marketplace especially in the area of truck production where Ford, Chevrolet and Dodge are particularly strong in the US market where they recognized a continued strong consumer demand for large pickup trucks regardless of the retail price of gasoline and they provide quality products to the consumer. There are high barriers to entry to the marketplace for a startup auto company based on cost of setting up a plant in the US. The US automotive industry is able to take advantage of trade deals like NAFTA to outsource production and jobs and to import resources or finished products without tariffs so reducing cost and increasing competitive advantage. Foreign automakers have to pay shipping costs and import tariffs to enter the market.
The weaknesses of the US automotive industry are primarily from foreign auto makers who tend to specialize in areas that US auto makers have a reputation for poor quality- for example smaller passenger cars, hybrids, sports cars, quality SUVs. Foreign companies like Toyota, Honda, Hyundai, Kia, BMW, Mercedes have been able to capitalize in these areas and to overcome restrictive import tariffs have even set up plants in the US. Traditionally the US auto makers were based in the “rust belt” area centered a...
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...t by 2025 all gasoline and diesel burning cars will be banned, such a ban in the USA would be very difficult to impose, maybe impossible, even though the US Environmental protection Agency estimates that 150 million people live in areas that do not meet federal air quality standard and the particulate matter from automobiles is estimated to cause 300,000 deaths in the US per year. Many people are concerned about the environmental and health effects of burning fossil fuel in cars and also the negative aspects of being so reliant of oil; particularly from oppressive regimes like Saudi Arabia. However, most people in the USA love their cars and big trucks, so changing their
consumption habits to a more carbon neutral socially responsible way of life would be very difficult. They love the freedom of the open road (me too!), if you can navigate out of the congestion first.
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