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Automotive Industry

The automotive industry, one of the most important industries in the world, has left its mark not only on the economy but also on the world cultures. The automotive industry is involved in the design, development, manufacture, marketing, and sale of motor vehicles.

More than 73 million motor vehicles, such as cars and commercial vehicles were produced worldwide in 2007 with a total of 71.9 million of new automobiles sold: 22.9 million in Europe, 21.4 million in Asia-Pacific and 19.4 million in USA and Canada. While markets in North America and Japan have stagnated, those in South America and Asia have grown, with the most rapid growth coming from Russia, Brazil and China.

The Automotive Industry produces automobiles and other gasoline-powered vehicles, like buses, trucks, aeroplanes, and motorcycles, but also electricity-powered vehicles, such as trains. Not only does it provide jobs for millions of people worldwide, but the revenues generated reach well over billions of dollars, providing the necessary base for a wide range of other service and related industries.

The invention of automobiles revolutionized transportation in the early 20th century, and the way people lived and commuted for pleasure or business was forever changed. Goods could be taken farther and faster, and new market areas were now opened to facilitate business and commerce.

Overall costs of production were brought to a minimum with methods such as mass production, meaning that several products were made at once, mass marketing- products were sold nationally not only locally), and last but not least, globalization of production assembling products with parts manufactured all over the world.

However, in 2008 due to increased oil prices the automotive industry is subject to pressures from higher prices of raw material combined to changes in the buying habits of consumers. Moreover, the industry is at the same time up against external high competition coming from the public transport sector, since consumers are just now starting to evaluate the use of their private vehicle.

In North America, the automobile industry is dominated by the famous Big Three:

General Motors (producer of Chevrolet, Pontiac, Buick and Cadillac, etc)
Chrysler (Chrysler, Jeep and Dodge)
Ford Motor Co – (Ford, Lincoln and Volvo)

Unfortunately, the automobile also means related problems, like air pollution, the emission of gases leading to imminent global warming, traffic, not to mention fatalities. Nevertheless, the automotive industry is still an important source of employment and transportation for billion of people all over the world.

The rise in foreign investment has led to the rapid growth of automobile production, its export and developing of a more strong automobile industry. Overseas companies are making huge investments and are installing extensive production capacities in many developing countries. Today, the increase in the purchasing power and standards of living of people has resulted in the increased demand of automobiles especially four-wheelers in the developing nations. The fast pace of life and changes in lifestyles necessitates safer mobility for commuting to and from the work place and for traveling long distances. Research & development has resulted in increased productivity, better quality of automobiles and automotive accessories all across the globe. Low cost vehicles that are scooters and motorcycles have led to the massive growth of some of the fastest developing economies. The future of automotive industry in the developing countries seems bright and promising because of its further growth potential.

A lot of the major automotive giants are shifting their production facilities to almost all emerging markets with the main purpose of gaining better access and reduction in their production costs. According to the figures, South America and Asia have witnessed a boom in the past years. The various factors such as cheap financing and price discounts, rising income levels and infrastructure development have helped increasing the growth and development of automotive sector in the majority of developing countries around the world. The global automobile industry along with components and parts is expected to reach US$ 1.9 trillion by 2015, growth and it is thus evident that the economical potential of the auto industry is very high.

Reasons for the boost witnessed in the certain regions for the automobile industry are due to the availability of infrastructure facilities such like power supply, machinery, capital and availability of raw materials with efficient and relatively cheaper labor. Automotive industry is providing employment to a population of about 25 million people in the world. This industry not only provides millions of jobs to the people, but also produces billions of dollars in terms of worldwide revenues to many countries that are linked directly or indirectly with automobile industry.

This industry is developing new markets worldwide but major shares still remain in the prominent automotive manufacturing regions. North American regions like New England, New York and the Mid-Atlantic, Central New York, Pittsburgh/Cleveland, Western Great Lakes, St. Lawrence Valley, Ohio and Eastern Indiana, Kanawha and middle Ohio Valley, St. Louis, the Southeastern region, Gulf Coast, Central Florida, and the West Coast are the major contributors towards the automotive industry in the USA. The European Union has the largest automotive production regions in the World. The key automobile manufacturing regions are United Kingdom, Rhine-Ruhr River Valley, Upper Rhine – Alsace – Lorraine region, and the Po Valley in Italy.

The global automotive component industry is highly diverse and comprises of various product segments like engine parts, drive transmission and steering parts, suspension & braking parts, electrical parts and other auto components parts.