The auto sector is often credited as the engine room of Europe. The EU is home to all the competitive and innovative automotive industry that generates movements throughout the economy – from raw materials and parts supply, to R&D and manufacturing, to sales and after-sales services. Manufacturers have trained and developed a highly-skilled workforce, producing quality products for home as well as international markets. Automotive industry supports over 2 million European jobs and with an additional 10 million citizens employed with its associated industries. Exports are estimated at over €70 billion per annum. The automotive industry has also established itself as a partner in sustainability. Technological advances which have brought real time solutions, driving down harmful emissions from industry products and production sites. Manufacturers have spearheaded significant enhancements in vehicle safety and clinched social responsibility goals. The main purpose and some of key facts associated with European Automotive Industry are as follows: Manufacturing in Europe: Vehicle manufacturing is a strategic industry in the EU, where 18.4 million vehicles including cars, vans, trucks and buses are manufactured. All the OEM’s together operate 208 vehicle assembly and production plants in 22 countries across Europe. Creating skilled jobs: Around 13 million people work in this sector –which represents 5.3% of the total EU employed population. The 3 million high-skilled jobs in automotive manufacturing corresponds to 10% of the EU’s manufacturing employment. Powering economic growth: The €839 billion turnover generated by the automotive sector represents about 7% of EU GDP. The automobile industry has swelling effects throughout ... ... middle of paper ... ...addition, GM decided last month to withdraw its Chevrolet brand from Europe at the end of 2016, which means competitors will be able to try and win some of Chevrolet’s annual sales of about 175,000 units in the region. Europe, with nearly 300 factories in 2012 stretching from the tip of Spain to deepest Russia, only did half its homework. Its recovery has been hobbled by politicians who want to keep plants open to protect jobs. So its rebound is weaker, and will be less profitable. Losses will ease this year, but will not disappear completely. “We still believe there is too much capacity and the measures in place won’t be enough to bring the industry back to profitability unless we see a strong market rebound. And that’s not what we will see this year,” said Falk Frey, senior vice president at Moody’s, which forecasts a 3 % upturn for western Europe. (CLARK, 2014)
Picciotto, Dan and Nishit K Madlani. "The Global Auto Industry Shifts Its Focus To OVerseas And Emerging Markets." Credit Week (2013): 26. Online. 21 May 2014. .
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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:
The automobile sector has been a robust sector that has experienced tremendous growth in the past seven to eight years. Apart from two years in particular -2008-09 & 2012-13, there is general trend of ten percent plus growth in various segments like passenger car, commercial vehicles, two and three wheelers. The following chart shows the growth rate of various years in each sectors.
The automotive industry is without a doubt an industry that has massive implications relating to the United States economy as well as affecting every American household. Shifts in the supply and demand of automobiles influence the current and future household purchases. Households must determine what amount of their hard-earned income to allocate to certain necessities. Because most households have a budget, the amount spent on transportation it limited. While most industries have an effect on the economy, the automotive industry has far-reaching implications for most Americans. Not only are the workers affected but the many spin-off jobs created as well as the consumers that must purchase the automobiles manufactured.
In this part of my answer I am going to highlight what I feel the key features / characteristics of the global automobile industry are. First of all I feel that it is important to mention that the actual automobile market itself is very cost and labour intensive,ie, it requires a large amount of labour and money to produce it's products, this is why it is an extremely hard market to penetrate. Examples of where these high intensive elements come from are the following:
As the economic integration of Europe continues, it is likely that increasing international competition will affect firms in European industries. As other countries expand and have more trade worldwide, the more the European economy will be affected. The economy will tend to buy from outside of Europe due to taste and lower prices. There would be more firms to choose from decreasing Economies of scale are significant because motor vehicle manufacturing is an industry based on growth. Since the automotive industry being discussed is in Italy, it is based primarily around one company, Fiat. The majority of sales of automobiles in Italy are acquired by Fiat. The automotive industry constitutes a substantial part in the European economy because this industry makes up 10 percent of total manufacturing output.
The United States employs over one million workers and 3 percent of the U.S. economy is represented by the output of auto manufacturers in the U.S. (Klier, 2005). An average of over eight million passenger vehicles is produced in the United States annually. In a report published by Young (2014), auto sales in the U.S. have increased by 9.1% since July 2013. The automobile industry is a competitive industry, with global manufacturers such as British Motor Works (BMW) and Mercedes among other manufacturers importing vehicles into the U.S.; consumers have a wide range of vehicle makes and models to choose from.
Sturgeon, T. and Florida, R. 2000. Globalization and jobs in the automotive industry. Final report to the Alfred P. Sloan Foundation. International Motor Vehicle Program, Center for Technology, Policy, and Industrial Development, Massachusetts Institute of Technology.
Spatz, J., & Nennenkamp, P. (2002, January). Globalization of the automotive industry-traditional locations under pressure. Retrieved January 14, 2012, from http://www.uni-kiel.de/ifw/pub/kap/2002/kap1093.pdf
The world of technology is ever changing and advancing. With the automotive industry in play technology is constantly surpassing what is available today with what can be done for tomorrow. Technology and the automotive industry go hand in hand with constant improvement to components of cars. Due to technology advancement there is competition within the car industry, especially between American car companies and European car companies. European car companies provide their buyers with innovative variety and revolutionary luxuries. European car technology is superior to American car technology due to their safety, entertainment, and luxury features.
The automotive sector is a key industry in the Malaysian economy. The economic contribution of this sector is immense, with significant linkages to the manufacturing and services sectors. The automotive sector began with importation of vehicles which then progressed to assembly operations and the establishment of a wide network of automotive components and parts manufacturers. (Malaysia Automotive Association, 2005)
With an average growth of 2% annually, car industry has been one of the fastest growing industries in the world. The industry has been keeps on changing and it had been become one of the most competitive markets and it has been globalize radically due to its growth. But now there are only a few major players that dominate the global market as mergers and union has been occurring regularly between them. Previously, the car industry has been dominated by the Europe and American car industry but it has been facing heavy competition from the emerging Latin America and East Asia car manufacturers in the global market recently.
The automobile industry is a pillar of global economy. Globally automotive contributes roughly 3 % of all GDP output. It historically has contributed 3.0 – 3.5 % to the overall GDP in the US. The share is even higher in the emerging markets, with the rates in china and India at 7 % and rising. China produces the highest number of automobiles followed by US and Japan (oica.net, 2015). The industry supports direct employment of 9 million people to build 60 million vehicles and parts that go into them (oica.net, 2015). Many other industries such as steel, iron, glass, aluminium, textiles etc. are associated with the automotive industry and resulting in more than 50 million jobs owed to the auto
India is also a prominent auto exporter and has strong export growth expectations for the near future. In April-January 2016, exports of Commercial Vehicles registered a growth of 18.36 per cent over April-January 2015. In addition, several initiatives by the Government of India and the major