The American Automotive Industry, popularly known as the U.S. Automotive Industry is one of the most rapidly evolving industries in North America. It is generally oligopolistic with a few players who in the past have been known to avoid price competition among themselves. The industry consists of industries manufacturing vehicles, car parts, replaceable parts and those engaged in assembling parts into complete models. However, the most dominant players in this industry are the vehicle manufacturers. The players design various models, produce the various parts that each model needs and assemble them into a finished product before availing them to the market. General Motors, Chlysler and Ford motors, dominate the U.S. Automotive mobile. They are popularly referred to as “The Big Three”.
To properly illustrate externalities that may shift the supply and demand curve in the U.S. auto market over the next five years, it is necessary to look at the recent events having affected the U.S. auto industry during the recession and the strides U.S. auto makers have made to recover from near devast...
The development of the American Auto Industry took place over many, many years, starting with Mr. Henry Ford building the first car in 1896. The industry has evolved, to what it is today and represents approximately 10% of the country’s Gross Domestic Product (GDP). According to the Bureau of Labour and Statistics, ‘the automotive industry includes industries associated with the production, wholesaling, retailing & maintenance of motor vehicles’. These industries are industries that have a tremendous impact on the U.S economy and can be directly impacted by changes in U.S. production and sales of motor vehicles.
In a capitalistic country with a free market, foreign competition is expected. This is no exception for the automobile industry where America competes with its various rivals. Competition from elsewhere encompasses that from Italy, Germany, and of course, the renowned Japan. The Japanese vehicle industry is especially competitive; according to the Automotive News Data Center, five out of the ten best selling vehicles of the year are Japanese vehicles. This data applies to the U.S. market over the first 9 months of the year. Expectedly, the automobile industry is an important and significant market. Motor vehicles are a major form of transportation as many people in the U.S. own at least one car.
Throughout the world there are numerous automotive manufacturers. Appendix A is a list of 215 that can be found on the Wikipedia Website titled List of current automobile manufacturers (alphabetical). (List of current automobile manufacturers (alphabetical)) Due to the restricted amount of time available of information on manufacturers, and the restricted amount of time available for this paper, research was limited to only the manufacturers listed below for the majority of the industry outlook. [replace with company chosen] was chosen for an in depth review for this report.
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 Group’s goal is to offer attractive, safe and environmentally sound vehicles which can compete in an increasingly tough market and set world standards in their respective class.” (Volkswagen’s, mission statement) Volkswagen Group is a German corporation, it manufactures: passenger cars, commercial vehicles, motorcycles and engines. Volkswagen extended its lead over Toyota in May 2016, and it has every chance to finish the year as the world’s largest automaker. (Forbes) The company owns Audi, Volkswagen, Bentley, Porsche, Lamborghini and Bugatti. Volkswagen Group used modern technology to cheat the emissions testing for its clean diesel cars for the past six years. Volkswagen programmed computers in: Audi, Volkswagen and Porsche, to detect
Audi, one of Germany’s first automobile producers, has been designing and building cars since August Horch, its founder, completed his first car in 1901. Over the years following, a series of innovations and mergers have led Audi to the position it is in today. Audi’s subsidiaries include companies to facilitate international operations, part manufacturers, a vehicle customization company, a technology research company, and Lamborghini Corp, a successful sports car manufacturer. Audi’s current developments include its holding the EU Seal of Environmental Protection, and a number of technological advancements, including new car designs and a “seeing car” technology that has been nominated for the German Future award for Technology and Innovation.
Bayerische Motoren Werke AG (BMW) is known as one of the most successful company founded in Germany in 1976. It is part of the “German Big Three” luxury automakers (Cato). Holding the dominant position in European market, BMW decided to move into China to seek global expansion. Competition and challenges facing BMW are fundamentally different from the ones in Europe due to different demands from customers; therefore, it is questionable whether BMW will still remain “the most successful premium manufacturer” in the car industry.
Previously consumers were willing to pay a premium for “Made in Germany” as it was associated with reliability, trustworthiness and engineering prowess, however this no more the case (The Economist, 2015). They also face competition from new entrants Tesla’s electric car, based on the new electronic drive-shaft technology that is environment-friendly and aligned with the global movement towards clean air (reference?). These companies do not have the challenges of a legacy business like BMW and they can disturb the market quickly. Fortunately, BMW’s all-electric i3 and i8 cars were developed to meet this ever changing mobility preferences (BMW, 2015). However, BMW must look for greater innovation within its business model through collaboration with its suppliers, potentially its competitors and with corporations within other industries (Nidumolu, Prahalad, & Rangaswami, 2009). Although BMW operates with favourable government policies, it must anticipate tougher enforcement of environment regulations as governments respond to consumer outcry about cheating, environmental impacts of mobility and the offer of alternative mobility technologies like the electronic
Porsche came out with the models of 914 and 944 because they take the consumers with lower income into account during the recession of 1970s. They redesign, reposition and reprice the vehicles so that it is allow the consumers to purchase the product for the purpose of social class, family needs or status. With this, Porsche still able to create loyal customers even if the economic situation did affected their business when they have considered their customers’ personal income, savings and interest
Additionally, albeit other premium-evaluated car producers have broadened operations, and apparently effectively kept up the shopper 's confidence in their quality and brand, this is a decision of administration, and hard to second-figure. All things considered, at last, the monstrosity of Porsche 's conversion standard presentation is not going to leave. Supporting it with money related subsidiaries is innately a stop-crevice measure, and does nothing to rebuild or set up the organization for the long haul. Consequently, the likelihood of a financing fence, dollar-designated obligation, ought to plainly be
...are fierce competitors. Over the past five years Audi has made a lot of progress in the U.S luxury market. With several successful new product including the A3, A5, A7 and Q5 which help them to increase share in the luxury market has almost doubled from 4.5 percentage in 2006 but last year 2013 it increased up to 8 percent however Audi’s to German rivals have also fared well. BMW share has climbed from 14.1 percentage to 16.9 percentage over the same time period and Mercedes Benz portion has increase from 13.0 percentage to 16.6 percentage. The gap in market share between BMW and Audi has declined little bit from 9.5 to 8.8 percentage points.
As a result of the increased demand of cars, the competition among car companies is becoming intense. Although the market of car is the biggest growing market in the world, there are still some companies who make cars failing year after year. However, there are some outstanding car companies such as The BMW Group performing distinctly.