Automobile World Industries
Mark Geraghty AP Economics Automobile Industry There is no industry more present in the world-wide community than the automobile industry. The automobile has changed the lives, culture, and economy of the people and nations that manufacture and demand them. Ever since the late 1800s when the first "modern" car was invented by Benz and Daimler in Germany, the industry has grown into a billion dollar industry affecting so many aspects of our lives. There are more than 400 million passenger cars alone on the roads today. During the early part of the twentieth century, the United States was home to more than 90 percent of the world's automotive industry, but has shrunk to about 20 percent in today's world. This drastic change has occurred by the booming economies in such nations as Japan, Germany, Canada, France, Italy, and other nations. The US auto industry "sales totaled $205 billion, or 3.3 percent of the total Gross Domestic Product." (Tardiff 394) By the end of 19th century,! there were about 500 auto manufacturers, but that number dropped sharply to 23 by 1917, and today the Big Three dominate the market. Ford, General Motors, and Chrysler make up the Big Three which account for 23 percent of the world's motor vehicle product
y permanent, personal, and hopefully life-long relationship is created between the company, the dealer, and the buyer. Since the company keeps ties to its consumers, it already knows what the consumer wants, and the consumer is more willing to buy from the company. Toyota continues developing and producing its car, and it comes across the same problem as the GM team of not having all the specialized parts it needs. Like with the dealerships, Toyota has formed many symbiotic relationships with car part suppliers. These suppliers work hand in hand, with the Toyota team and develop any products that Toyota needs for its new model. The past decade has seen many interesting fluctuations within the automobile industry. Overall the auto industry fluctuates with the normal business cycle, for motor vehicles are an elastic demand to consumers. The more the price for cars goes up, the less people buy cars. For many years, the automobile industry has seen very large profits because the d! y permanent, personal, and hopefully life-long relationship is created between the company, the dealer, and the buyer. Since the company keeps ties to its consumers, it already knows what the consumer wants, and the consumer is more willing to buy from the company. Toyota continues developing and producing its car, and it comes across the same problem as the GM team of not having all the specialized parts it needs. Like with the dealerships, Toyota has formed many symbiotic relationships with car part suppliers. These suppliers work hand in hand, with the Toyota team and develop any products that Toyota needs for its new model. The past decade has seen many interesting fluctuations within the automobile industry. Overall the auto industry fluctuates with the normal business cycle, for motor vehicles are an elastic demand to consumers. The more the price for cars goes up, the less people buy cars. For many years, the automobile industry has seen very large profits because the d! he car in fiberglass or clay, then forge life size models also in clay or fiberglass. Automotive engineers then develop each part of the car, and mock-up builders create those indigenous parts of the new car. Test drivers check over the entire system, analyzing how it runs, and then gives suggestions on improving the vehicle. Automotive engineers test all the new, specialized parts of the car, and after all the parts are tested, plant engineers plan how to best mass-produce the new car. Of all the people working in the automobile industry, most will be found in this next industry which is the assembly plant. In the United States, the majority of these assembly plants can be found in the Michigan, Great Lakes area, and it, on average, takes about ninety minutes on the assembly line for an entire car to be produced. When planning a new car model, the company tries to create what the consumer wants. This is very difficult because as stated earlier it take between three and four y! emand and necessity for cars has increased significantly. Recently, large foreign competitors and steadily increasing prices in motor vehicles have reduced these surplus profits within the industry. Consumers are now demanding lower prices and more luxuries in their cars. To deal with this consumer demand, auto manufacturers have begun by lowering employee pay rolls, replacing employees with machines and more capable workers to improve productivity, and many times merge with other companies to better compete in the market. Production growth has been about 2-3 percent for the past few years in the auto industry, and hopefully will continue by implementing new cost efficient procedures. American industries, competing in the international markets, face the problem of a strong dollar compared to the weaker currencies of foreign nations. This means that American cars to foreign nations are more expensive, and foreign cars to Americans are cheaper. This supply and demand problem was! lobal car market is
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Approximate Word count = 4237
Approximate Pages = 17 (250 words per page double spaced)
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