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
The automobile has come along way since the days of Henry Ford, and you can rest assured that it will continue to evolve. Some of the parts can be carried over from previous models or other cars, but many times the company has to either create the new pieces themselves or buy them from a large scale supplier, like ITT Automotive. Each of these companies produce differentiated versions of the same product, have control over their products' prices, and rely heavily on non-price competition. When General Motors begins developing a new product, it starts by assembling a new team to coordinate the production. Most of the regulations now placed on car manufacturers have to do with making the car drive safer and be more environmentally sound. 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. Even though the ca!r itself will continue to change as will the industry that creates these incredible machines, there is no doubt that people's demand and love for cars will go on for a long time to come. Auto workers are also among the most highest paid workers in any industry and also the most productive. The Toyota team then collects the same information about what the public wants just like the GM team but has a much cheaper way of going about it. 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. The rise of computer technology in today's society has greatly affected the automobile industry. More than ever, international competition will keep individual company's sales from soaring. For many years, the automobile industry has seen very large profits because the d!emand and necessity for cars has increased significantly.
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