Essay About Auto Industry Of Today And World’S Automotive Industry

The Auto Industry of Today
The Auto Industry of Today
The Auto Industry of Today
There is no industry more present in the worldwide 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 Benz and Daimler in Germany
invented the first “modern” car, 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 (Tardiff 394).. 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 dominant the market. Ford,
General Motors, and Chrysler make up the Big Three, which account for 23 percent of the
world’s motor vehicle production in 1997, with the Japanese industries coming in second,
producing 21 percent. Germany produces 9 percent; Spain, France, South Korea, and Canada
each produce 5 percent of the international market in 1997. In the US alone, the auto-industry,
which includes it’s 500,000 car-related businesses, creates 12 million jobs (Broughty 290). The
automobile is clearly an oligopoly, but each company’s control of the market has gradually
diminished because of rising foreign competition.
The US has three main auto manufacturers; Japan has five major producers, as does
Germany. Each of these companies produce differentiated versions of the same product, have
control over their products’ prices, and rely heavily on non-price competition (Womack 154).
Each company produces a new line of cars for each model annually. There are many different
types of cars, like sedans, station wagons, Sport Utility Vehicles (SUVs), two-doors, and four-
doors, but by comparing models between two competing companies, you can see how great the
similarities are. The auto industry can still thrive even though their products are so similar
because the demand for cars is immense and continuous. People rely on cars for so many things
that life without one seems impossible, especially in the US which registered 141 million cars in
1988, whereas Japan, the second highest, only registered 30 million (Broughty 96)
The creation and production of a new car starts about three to four years before it is released
to the public (McBride 102). The initial planning stage begins in the company’s corporate
headquarters with ideas for the car from product planners and company officials. Automotive
designers draw prospective sketches of the new car, and once approved, model makers create
small-scale models of the 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