The Advantages and Disadvantages of the Automotive Industry
Ford, Chrysler, Toyota and Mitsubishi. What do all these companies have in common?
These are some of the best known car manufacturers in the world.
Cars are a necessity in the modern world. These are used to transport people and goods to various places. The vehicles these companies produce come in different shapes and sizes.
All the customer has to do is walk in to one of these dealerships, check if the vehicle satisfies certain expectations then drive it off the lot.
The automotive industry has grown since the end of the 2nd world war. Cars are more comfortable, spacious and elegant. The engines are bigger and stronger making these work horses work well in the fast lane.
The advantage of open markets creates stiffer competition among the automotive players. It keeps the research and design divisions working constantly to build better and more fuel efficient cars.
In the 90’s the first hybrid car was introduced into the market. Other manufacturers have followed suit developing similar models. The fluctuating price of oil in the world market has helped in the sale of these new vehicles as well as compact cars. People who once owned SUV’s have also replaced these vehicles with those that have smaller engines.
The United States automotive industry is strongest in the world. But things have changed. Due to deals and agreements with foreign countries, new cars are competing with the local brands. Since these are cheaper and in some cases better, sales have suffered.
Recently, Ford announced that 30,000 jobs will be cut from the workforce. This is part of the restructuring campaign due to slow sales. Other companies such as Volkswagen have also stated similar reductions.
Another advantage of the automotive industry is that it has generated new jobs. The United States just like Japan and Germany have moved manufacturing operations overseas. This is because the cost of labor is cheaper and there is a market for those vehicles in those countries.
The disadvantage of having it done overseas is that a lot of Americans will not have jobs. This in turn will increase the unemployment rate of the country and people who have been working in the assembly line for years will have a hard time looking for a new job.
The automotive industry has also made old rivals into friends. Chrysler has merged with Daimler-Benz. Ford made a similar arrangement with Volvo. The combining of technologies and know how of such partnerships has led to the development of better vehicles. This as some analyst say is just the beginning of more global consolidations in the future.
The oil problem has also prompted manufacturers to try finding alternative fuels to power these vehicles. Japan has developed the electric car. Some countries in Europe are trying to use sugar cane oil to replace diesel.
The disadvantage of this partnership will forever change how these cars were developed. Volvo had a way of making a car. Ford had a certain approach. Each of these companies had an x-factor that distinguishes one brand from another.
The advantages of the automotive industry outweigh its disadvantages. Though this might make the world one giant corporation, as long as there is a demand from the consumer, manufacturers will still continue to build better, safer and more efficient machines.