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U.S Auto Industrys Market Share And Fluctuations

879 words - 4 pages

U.S Auto Industry's Market Share and Fluctuations

The U. S. auto industry's share of the market has experienced fluctuations over
the past 50 years. These fluctuations have been caused by many reasons, but some
of the main reasons include quality, price, and foreign competition.

The Ford Motor Company, General Motors Company, and the Chrysler Corporation,
a.k.a. "The Big Three", are the three largest manufacturers of automobiles in
the world. " The Big Three" hold nearly 75% of the market and produce over 8
million automobiles per year. The largest competitors of " The Big Three" are
Japanese auto producers that include Toyota, Nissan, and Honda. These three
foreign manufacturers hold 20% of the market and produce about 2.7 million
automobiles per year.

General Motors Company, the world's largest automobile producer, originally was
composed of four major vehicle manufacturers- Buick, Cadillac, Oldsmobile, and
Oakland which became Pontiac. Presently, General Motors is made up of Buick,
Cadillac, Oldsmobile, Chevrolet, Pontiac, and Saturn. During the first thirty
years of operation GM's only major competition was from U. S. manufacturers.
However, since the first foreign truck was imported from Japan in 1956, GM's
share of the market began to decline. Foreign cars were smaller, more fuel
efficient, less expensive, and often more reliable than their American
counterparts. General Motor's market share dipped from nearly 44% in 1973 to
below 30% in 1985. In response to this sudden drop in its share of the market GM
founded the Saturn Company. Saturn produces compact cars very similar to
Japanese imports at competitive prices. This response halted GM's declining
share of the market. Today, General Motors maintains about 30% of the market.

General Motors was the first large auto company to begin research on alternative
fuel sources and continues to lead the way. Some developments of this research
include the first production natural gas engine, and the first car powered
completely by electricity. Many ideas are still in the process of being
developed, such as affordable solar powered vehicles and ultralight plastic body
parts.

The Ford Motor Company, founded in 1903 by Henry Ford, was the largest car
manufacturer in the world until 1929 when GM passed it. Ford is currently the
second largest producer of automobiles in the world producing over 5 million
cars per year and holding 25% of the market. In the late 1970s and early 80s
when its share of the market was being taken over by foreign auto companies,
Ford's response was different than that of GM's. Ford decided to buy small
foreign companies and convert them to Ford production facilities. This would
enable Ford to increase its share of the market in Europe and Asia. Also, this
would allow Ford to avoid high tariffs placed on foreign cars in China and Japan.

Ford motor company currently employs over 300,000 workers world-wide. In January
of 1996, Ford merged its...

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