Global Competition In The Auto Industry

The American auto industry is mainly represented by the Big Three - i.e.: General Motors (GM), Ford, and Chrysler. For more than a century these organizations have been the undiscussed leaders of the industry, but in less than a decade they are facing great difficulties. Globalization, the 2008 crisis, and the rising concern for environmental issues have been seriously challenging the American auto industry, “an important sector of the overall economy. In fact in the United States, the automobile is second only to a house in purchase value for the average American household.” (Gale, 2008)

The aim of this essay is to report and analyze some factors, as “the global competition in the industry, new technology for powering the product that this

Auto producers have used various means to develop a full line of product offerings for a broad spectrum of customers. For example, Ford acquired Volvo and Jaguar while GM owns Chevrolet, Oldsmobile, Pontiac, Buick, GMC, Cadillac, and shares in Suzuki and Isuzu (to satisfy fuel efficiency requirements). Luxury brands Lexus, Acura, and Infiniti belong respectively to Toyota, Honda, and Nissan; these cars are built on the same platforms as the original vehicles, but they have been introduced in the United States with a “clever marketing ploy” (Gale, 2008) to gain the luxury market. Nowadays, “Mercedes, BMW, Lexus, Infiniti, and Acura capture a third of the upscale market in the United States, whereas Buick, Ford, Mercury, and Toyota are known for their family-styled traditional cars.” (Gale,

“The University of Michigan and the Center for Automotive Research stated that this industry is the major user of computer chips.” (Highfill, Baki, Copus, Green, Smith, Whineland, 2004) Another great challenge for automobile manufacturers is represented also by new technologies and products, such as electronic fuel cells, navigational systems that manage congestion problems, and telecommunications capabilities. A further transformation in the industry will be a build-to-order system which will change the distribution channels thanks to the internet. (Gale,