Environmental Challenges Facing The Automobile Industry Case Study

The environmental challenges facing the American auto Industry.America is currently the second largest auto industry in the world after China. In a report on Edmunds.com it is estimated that in 2014 America will produce 16.4million light vehicle cars. The giants in this industry the General motors, DaimlerCrystler, Ford, Toyota and Honda will battle it out for a market share. Historically buying of cars was associated with wealthy and even today some of the brands in the automobile industry are status brands. As the world is changing a lot of issues are arising from consumers, governments and the auto industry owners themselves. The first challenge was in 2009 era when the once biggest auto industry output dropped to a record low of 5.7 million
Investments have been made to acquire technology which will address the issue of fuel; one of such investments is in the hybrid electric engine cars technology being pursued by Honda and Toyota whilst the other is investing in hydrogen fuel cars by General Motors. According to a paper on Automotive Industry Analysis written by David Highfill and others November 2004, as prices of fuel continue to go up and there is instability in the regions where this fuel come from, it is only feasible to consider other alternatives and hybrid and hydrogen fuel cars seems to be the future of the auto industry. The capital needed to be invested is very huge and long-term plans of auto industry should weigh the opportunity cost associated with failing to invest in research and development of the technology.The consumer demands have kept the automobile producers busy. The need for safety features has caused the installation of airbags and abacus breaking systems in new models of cars produced. The need for fuel savers has forced the industry to reconsider its position on fuel guzzlers like the Fords four by Four
They are also not willing to associate themselves with cars whose carbon emission into the atmosphere is questionable as social corporate responsibility is also becoming one of the marketing tools.At one time America had a trade association which housed industry players in America only called America Automobile Manufacturers Association, but with the passage of time and in order to increase market share into initially closed markets, a new trade association called Alliance of Automobile association was formed and this was a global association which made it extra difficult for any new entrant to enter the automobile industry. The big names where now in one association and kind of reduced the hostile competition. The benefits of this association was the ability to access markets which had government restrictions making trading easy