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Environmental Challenges Facing The American Auto Industry

1414 words - 6 pages

The American auto industry began in the late 1880’s, evolving from the horse powered wagon, steam powered cars, gasoline powered then to the hybrids and hydrogen fuel celled technology today. Henry Ford and the Ford Motor Company were the first to mass produce cars. American automobile manufacturers dominated as the largest volume producers in the world until the 1980’s when the Japanese became the largest producers. The Chinese with 14.8 percent have become the number one volume producer in the world OICA (2014). The United States at 6.9 percent has dropped in position to the second highest volume auto producer in the world. The focus of this paper will be about the environmental challenges facing the American auto industry. In this title the word environment, speaks of the general elements (e.g. political, technological, economic, social, legal and environmental) that affects the industry. These general elements are mostly beyond the auto manufacturer’s direct control, yet they present challenges. The biggest environmental challenge facing the American industry is global completion. The last 10 years saw the rise in the number of Japanese vehicles being bought by the American consumer because they were cheaper, better gas mileage and performance. The Japanese auto maker Toyota is “spending more time on digital, social and mobile in order to focus on the elements that are important to the consumer” Retchin (2014). Toyota’s goal is to recapture and increase its market share. China with its 14.8 percent market share dominates worldwide auto sales however this dominance is a disadvantage and also an advantage for the American industry. General Motors now sells more cars in China than anywhere else and Chevrolet, Ford and GM are in a rush to expand their SUV lineup in China according to Greimel (2014). Mergers are another way for the American industry to remain viable, by allowing them to access new markets. Chrysler has merged with Diamler of Germany and Fiat the Italian manufacturer.
“The U.S. market may rise 2.4% to 16.03 million from 15.65 million this year and to peak in 2017 at nearly 17 million before leveling off” says (Ramsey & Boudette 2013). The American auto industry will face major competition in the next five years from Europe, China, Japan and other emerging markets. In order to remain viable U.S. auto manufacturers must continue to seek out new markets, mergers and invest in new technology.
The American auto makers have already invested billions of dollars in new technology. Every year at the major automobiles shows new concept cars are unveiled as each auto maker seeks to drum up consumer interest along with domestic and international investment. The U.S. government with a stated goal of reducing the dependence on oil has called for companies to put one million electric vehicles on the road by 2015 (D.O.E 2011). General Motors and Ford have already invested in hybrids and GM’s Chevy volt is already a top selling electric car. GM...

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