Issues in Today's Global Automotive Industry
Issues in Today's Global Automotive Industry
What are the most important characteristics of the global environment in the automobile industry, especially those opportunities and threats faced by the top players in the industry? Why so?
If a list was made of the top economic sectors with the greatest influence on the American economy, one could make a strong argument for including the automotive industry. A prime example of the validity of that claim was evinced when “durable goods, such as cars, made up over 90% of the spike in consumption at the end of 2001.“ (Wolkomir 34) Since consumer spending is now the prime indicator of the state of our economy, the success of our auto industry is very important to the future of our economy.
In the last few years, many were quick to dismiss stalwarts of the Old Economy. In light of the astronomical growth of the "New Economy" technology sector in the late 1990’s, the auto industry seemed to be filled with lumbering, corporate behemoths. With the recent crash of the technology sector, the automotive industry is again in the spotlight, along with many other manufacturing industries. Even though sales have been up recently, the automotive industry still faces many challenges. These challenges must be overcome in order to ensure the survival of the industry's major players. In this paper I will discuss what GM, Ford, Daimler-Chrysler, Toyota, and the remaining handful of smaller manufacturers must do in order to stay on top in the future. Each one of these companies is faced with its own unique strengths, weaknesses, opportunities and threats that must be properly addressed. As a whole though, they all face similar issues. I will address those issues in this paper. If any one of these companies is not careful to handle these issues in the coming years, then it stands the chance of being absorbed by another company or going under. I will attempt to outline the future of this industry in general, and what several of the major corporations involved must do to stay on top of the game or survive.
There are literally thousands of elements that are involved in shaping the future of an automotive firm. For the sake of simplicity and brevity, I have tried to divide it into four different areas: product, market,...