The United States recession (which lead to a world recession), began in 1997 and significantly impacted the United States automobile industry during the recession period. The United States automobile industry is still reeling from the effects of the recession throughout the period of economic recovery that continues today. According to Chu and Su, “In this credit-driven recession, one of the hardest hit sectors was the automotive industry, along with the housing and financial markets. Chrysler and General Motors were pushed into bankruptcy; and 276,000 jobs in the automobile and parts industry were destroyed, a whopping 36 percent of the total employment in the sector”. 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: 1. Externalities that may shift the supply and demand curve over the next five years. 2. Factors creating value in the industry and factors that will most likely input demand in the future. 3. Cost and supply analysis. 4. Industry trends and factors changing the industry. 5. Potential of supply and demand curve movement over the next 5 years. 6. Market Structure. 7. Porter Analysis on the industry. 8. General Motors strategic considerations using the game theory concept. Market Externalities 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... ... middle of paper ... ... If U.S. auto manufacturing takes a down-turn, the U.S. economy will be negatively impacted and the demand for automobiles in the U.S will suffer. If GM or other U.S. auto manufacturers fail, there will be greater opportunity for new entrants into the U.S. automotive sales industry. For these reasons, all manufacturers including GM that sell autos in the U.S. should continue to use a cooperative game theory strategy to ensure the industry recovers. GM should continue to use its technological advantages to create innovative automobiles, but do so cautiously. GM should follow the direction of today’s environmentally conscious consumers who want less expensive, economical automobiles. GM should primarily utilize a cooperative game-theory approach in its sales and marketing strategies in order to stay in sync with the current automotive industry needs.
"Is the Auto Industry's Recovery a 'Success Story?'." Internet Wire 24 Nov. 2010. General OneFile. Web. 25 Nov. 2011.
The automobile industry is one that has constant vicissitudes. Burns Auto Corporation is not exempt from these unexpected changes or shifts in that industry. Many factors drive the automobile market fuel prices, the economy, and family sizes are just a few. This paper will take an in depth look at the current situation at Burns Auto; including the situation, problem definition, end state goals.
Snyder, M. (2012, January 19). 17 Facts About The Decline Of The U.S. Auto Industry That Are Almost Too Crazy To Believe. The Economic Collapse. Retrieved November 17, 2013, from http://theeconomiccollapseblog.com/archives/17-facts-about-the-decline-of-the-u-s-auto-industry-that-are-almost-too-crazy-to-believe
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.
The manufacturing of automobile parts is always dependent on the demand for new car sales which are dependent on interest rates, the health of the economy, and by the replacement parts market (Hoover's, 2014). The jobs status in America is still growing at a very small place causing would be buyers to stay in their older vehicles longer before making the plunge to purchase. So, buying activity is slower compare to years past making it even tougher for industry competers. In a competitve manufacturing market small companies can compete along with larger ones by focusing on less parts or more specialized parts. In this market manufacturing profits rely on the demand for new vehicle volume. In 2009 from the...
AutoZone is not immune to economic downturn. In addition, when there is less money in the marketplace in general, all suffer, even AutoZone. Since consumers need money to buy auto parts. If the company takes its eye off the ball with respect to its center retail operation, it risks ceding ground to its rivals. AutoZone has been expanding at about 5% a year for quite some time. Prior to late 2006 its stock performance has been very mediocre. What really made the difference was its same-store sales growth since 2009. It increased from virtually zero to 5% almost overnight. The reason is because AutoZone is a macroeconomic driven business. AutoZone’s store traffic has benefited enormously from the economic downturn; in touch conditions, people do not buy new cars.
Detroit was once the mecca for workers pursuing the American dream. In the early 1900’s an innovative inventor named Henry Ford brought mass production of the automobile to this area, turning Detroit into a beacon of opportunity and economic success for many. This Automotive Industry has been at the base of Detroit’s economy for decades; however, it’s not like it once was. During the 20th century the auto industry had many high and lows. Many factors lead to the recent downturn of this industry that led to mass layoffs and displaced workers, which had a negative impact on Detroit, as well as the United States economy.
(4) Abel, Ivan, Maali Ashamalla, and Robert Camp. Competitiveness of the US Automotive Industry: Past, Present, and Future. Rep. 2nd ed. Vol. 10. Indiana: American Society for Competitiveness, 2010. Print.
The automotive sector is a major industry in America. The invention of the automobile in the late 1800’s revolutionized transportation. It wasn’t till Henry Ford in 1903 with his Ford Motor company, was the automobile made available to everyday Americans. Ford’s invention of the assembly line brought the automobile sector into a large industry in America’s economy. According to Veronica Franco of Market Research stated that in 2010 the auto industry had a global value of $728.3 billion. He projects that at the average growth rate of 24.1%, like what we saw from 2009 to 2010, by 2015 the value of the industry will be at $904 billion. So what does this mean for the future of this industry? It is going to continue growing. To see where the industry is going, one must look at the past, present, both the American and global sector, and the future projections.
The American auto industry is in a crisis, their vehicles are not in demand and they need government bailouts to keep their businesses afloat. American vehicles are not on demand because people want fuel-efficient, the car companies that are not at the point of bankruptcy, longer lasting vehicles, and hybrid cars. The American car companies are at a point of bankruptcy and people don’t want to buy cars from a company that may not be there in a couple of months. The foreign car companies are doing well and they much more dependable now that we are in an economic crisis. American cars are not fuel-efficient, not as long lasting, and don’t make many hybrids, so this affects their business negatively. I got some ideas that will make American car companies be on top of the industry again.
As the supply curve moves in the automobile industry, the equilibrium price and quantity sold will change with this shift. When the automobile manufacturers see this shift in supply, they will then raise their prices and the quantity sold will fall. Car manufacturers will also develop...
Last 5 years were unexpected for vehicle manufacturing companies. Increasing fuel costs and growing environmental concerns have moved the customer’s choices from fuel consuming cars to smaller and more efficient vehicles. Throughout the past 5 years, growth in the countries Brazil, Russia, India and China has supported Toyota’s production. Demand for Toyota cars increased in these countries because of their rise of incomes. And, Western automobile companies transferred their production facilities to these countries to get advantage from their markets and benefit from low-cost production. In the coming 5 years, the economies will continue to grow, and the automobile industry revenue is expected to grow about 2.5% (annual) i.e. $2.6
Automobile industry in the North America is a very established and was the world’s biggest automobile industry for many years, during the 20th century, which was started with a number of companies in the early 1900’s. But, as the time passed, many companies opted out the competition and some companies merged, and finally only three companies, namely Ford, General Motors, Chrysler stayed in the competition, taking advantage over other independent makers, because of their financial stability. The industry took different shapes and went through different phases-, the depression of the 30’s, the stricter government regulations for automobile manufacturing in the 1960’s
The American auto industry has driven the American economy for quite a while. This industry has shaped our progression, and affected American culture and social mores. In no time, caught by globalization and other overpowering variables, it stands up to a troublesome reality. The automotive industries basically influenced the lives of Americans. Chrysler, Ford, and General Motors were American establishments. They are credited for an essential rate of all American livelihoods; they put different hands on families into the professional class, and helped America form into the goliath of the twentieth century, in terms of quality they put all the efforts to reach customer satisfaction. Appallingly, the well-known auto firms are not what they once were and are going down a precarious way. The thickness of its condition has created to a vast issue. From a forceful remote work force, to a strange outside trade technique, issues have developed on a tremendous reach.
The automobile industry is a huge economic player worldwide in terms of revenue and the great number of other industries it directly and indirectly affects. The United States has been at the forefront of the industry since its humble beginnings in the 1900’s. For many years the United States produced more cars than any other country, this has shifted in recent years with stiff competition coming from China and Japan.