The U.S. Automobile Industry

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”.

Industry structure

Although “The Big Three” dominate the market, there are other players in this industry, though most operate as foreign branches. A good example of these is The Three Asian companies: Toyota Motor Corp, Honda Motor Co. and Nissan Motor Co. According to Checkonomics (2006) their combined market share in the U.S. had gone up to 40.61% by 2005. As shown in a report by Graduate School of Business, Stanford University (2000), these six shared the market with Volkswagen, although local consumers also imported vehicles from other countries.

Industry outlook

Economic conditions are known to change rapidly, either favorably or unfavorably, especially when the political environment is unstable. 2009 was a particularly hard period for the U.S. Automotive Industry with General Motors and Chlysler facing bankruptcy and Ford Motors being the only survivor among “The Big Three”. Between 2006 and 2009, the world witnessed the Iraq War. This ...

... middle of paper ...

...se, some consumers opted to import cheaper vehicles. Others who felt the cost of maintaining an automobile was too high resorted to public transport. This in turn reduced sales further worsening the crisis.

References

Checkonomics (2006). Major players in the US automobile industry.

http://www.checkonomics.com/IndustryOverview.aspx?IID=44&CAT=41CC479&IName=Automotive&CatName=Major%20Players

Graduate School of Business, Stanford University (2000) Disintermediation in the U.S. Auto

Industry. Retrieved from http://gsbapps.stanford.edu/cases/documents/EC10.pdf

Herman Rosenfeld (2011) The North American Auto Industry in crisis. Retrieved from

Crisishttp://monthlyreview.org/2009/06/01/the-north-american-auto-industry-in-crisis

QuickMBA (2011) Porter's Five Forces: A Model for Industry Analysis. Retrieved from

http://www.quickmba.com/strategy/porter.shtml