Automobile Industry Essay

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.

Sectors within the automobile industry include marketing, maintenance and production. The manufacturing area alone employed around 700,000 workers in the U. S. in 2011 according to Basu (2015). Globally the industry employs over 4 million people directly, and many more indirectly. The world produces around 60 million automobiles

This has caused some issues with the industry and has caused a surplus of vehicles, particularly in the U.S. The problem comes from the level of profit directly related to the ability to mass produce automobiles. “The natural response to slowing growth and increasing productivity is to reduce capacity. However, existing plants are very painful to scrap: mass production confers a strong cost advantage, which has traditionally encouraged very large and expensive plants. The result is excess capacity worldwide. Even continuing consolidation in the industry is not resulting in capacity reduction” Papatheodorou (2007). Basically if the major automobile manufacturers scale back on production with their current labor scheme and existing plants they lose

As auto manufacturers from Japan, China and Europe have started expanding into the U.S. they have taken much of the business. This situation is causing U. S. based companies such as Ford and General Motors to lose not only money but market share. It is clear that this situation is not sustainable and must be remedied if these companies are to stay solvent.

As the United States and the world as a whole become more urbanized and less rural the demand for automobiles will begin to decline. Where once the idea of taking the bus or other means of public transit was looked down upon recently mass transit is becoming popular and even encouraged. Cities are now beginning to work on improving mass transit in forms of buses, buses and tramlines. This has also been spurred on by the soaring cost of oil in recent years. One can only imagine as oil becomes scarcer how much more it will cost to fill up a gas tank.

For situations in which one may need a car ideas such as Uber and car sharing clubs provide the urban dweller the convenience without the cost and overhead of ownership. Growing concern over carbon emissions and the effect that fossil fuels are having on our environment also play a role into the public’s slow drift away from the automobile. These combined factors will slowly see the reduction in demand for personal