Sample Essay on Factors Affecting Automobile Industry in the USA

Sample Essay on Factors Affecting Automobile Industry in the USA

There are many factors affecting automobile industry in the USA. One of the major factors that the USA automobile industry is facing is the excess capacity. CSM Worldwide, which is an auto research company, estimated that the global capacity in terms of automobile production in 2004 was at 74 million units.

In North America which is one of the regions that earn majority of the profits and revenue from the automobile industry excess capacity stood at 17 percent. The projection by the research firm was that excess capacity would continue for the years to follow. Excess capacity implies that automobile manufacturers have to face stiffer competition in the market.

Analyzing the market environment is another factor that the automobile manufacturing industry in the USA is facing. This is because there are more external forces that are changing the spending and buying habits of consumers. There are variables that the automobile industry in America cannot control.

For instance, the auto industry in America cannot control income distribution in another country where it sells its automobiles. Laws that governments of other countries pass are also difficult to control. In such cases, the best approach for the automobile to take is to analyze the markets and understand the shifts. This way, the automobile industry can come up with appropriate marketing strategies on the basis of the available data.

The automobile manufacturing industry in USA is also facing a challenge of competing with automobile manufacturers in other countries in innovation. The industry has to invest in research and development to come up with new technologies.

For instance, the auto manufacturing industry in the USA has to come up with latest technology that ensures that the produced automobiles are sustainable and environmental friendly. The technology that the industry comes up with will also impact its marketing strategies. Thus, the industry is facing competition in innovation to produce quality automobiles that meet the expectations of the market.

There are also many factors in the macro-environment that are affecting the auto industry in USA. Macro-environment is made of various forces of the society including market intermediaries, suppliers, the companies and customer markets among others. The industry must address these issues by manufacturing automobiles that target consumers.

As such, the automobile industry must conduct extensive research every now and them on cultural, political, technological, natural and economic trends. All these external forces affect the auto industry in USA because they must be addressed by manufacturers for them to achieve their objectives.

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