Automotive industry
From Wikipedia, the free encyclopedia
The automotive industry designs, develops, manufactures, markets, and sells the world's motor vehicles. In 2007, more than 73 million motor vehicles, including cars and commercial vehicles were produced worldwide.[1]
In 2007, a total of 71.9 million new automobiles were sold worldwide: 22.9 million in Europe, 21.4 million in Asia-Pacific, 19.4 million in USA and Canada, 4.4 million in Latin America, 2.4 million in the Middle East and 1.4 million in Africa. [2] The markets in North America and Japan were stagnant, while those in South America and Asia grew strongly. Of the major markets, Russia, Brazil and China saw the most rapid growth.
About 250 million vehicles are in the United States. Around the world, there were about 806 million cars and light trucks on the road in 2007; the burn over 260 billion gallons of gasoline and diesel fuel yearly. The numbers are increasing rapidly, especially in China and India.[3]
In 2008, with rapidly rising oil prices, industries such as the automotive industry, are experiencing a combination of pricing pressures from raw material costs and changes in consumer buying habits. The industry is also facing increasing external competition from the public transport sector, as consumers re-evaluate their private vehicle usage.[4]
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[edit] Crisis in the auto industry
The automotive industry crisis of 2008 occurred mainly as a result of the global financial crisis and the related credit crunch. In the United States, other contributing factors were pricing pressures on raw materials and substantially more expensive automobile fuels which, in particular, caused customers to turn away from large vehicles such as SUVs. In certain countries, particularly the United States, the industry has also suffered from relatively cheap imports available from countries such as Japan and South Korea and to some extent from Europe. As of November 2008, the Big Three U.S. manufacturers, (General Motors, Ford and Chrysler), indicated that unless additional funding could be obtained over the short to medium term, there would be real dangers of bankruptcy.
[edit] History
[edit] Germany
Daimler-Benz is the industry's oldest firm, building automobiles since the late 1880s; its current structure dates from 1926. In 1998 it bought the American Chrysler, then sold out in 2007 at a heavy loss as it never integrated the new car in its line.
In the popular market, Opel and Volkswagen are most famous. Opel was a bicycle company that started making cars in 1898; General Motors bought it out in 1929, but the Nazi government took control and GM wrote off its entire investment. In 1948 GM returned and restored the Opel brand.
Volkswagen is dominant in the popular market; it purchased Audi in 1964. VW's most famous car was the small, beetle-shaped economical "people's car" with a rear-mounted, air-cooled engine. It was designed in the 1930s by Ferdinand Porsche upon orders from Adolf Hitler, who was himself a car enthusiast. However production models appeared only after the war; until then only rich Germans had automobiles. By 1950 Volkswagen was the largest German automobile producer.[5]
Germany is famous for its upscale sedans. They are designed for high-speed cruising over the autobahns. They feature well-designed suspension systems that provide both a soft ride and good handling characteristics on winding country roads. Engines are designed for sustained high-speed operation.
Daimler-Benz produces the upscale Mercedes-Benz, long a famous name in racing. BMW (founded 1916) and Porsche are major factors in the luxury market.[6] Porsche formed his own company, which today produces expensive, high-quality sports cars.[7]. In 2008 the Porsche company sought control of the much larger Volkswagen company; Porsche cornered the market for Volkswagen stock and made profits of tens of billions of Euros, while apparently gaining control of the bigger company.
[edit] Britain
Britain today produces about 1.6 million cars and 240,000 trucks a year, 75% of which are exported. Since 2005 the main firms are all foreign owned.
The auto industry developed late in Britain and for the first half of the 20th century the small output of British-owned companies focused on luxury and upscale models notably Rolls-Royce and later Bentley as well as Jaguar and Rover. The stress was on high quality hand-made craftsmanship, regardless of high cost.
Beginning 1925 William Morris, later Viscount Nuffield, began to mass produce small cars of modest power under the "M.G." nameplate. Morris modeled his methods after Henry Ford, and sought high volume production of inexpensive cars geared to the urban middle class. In 1953 M.G. merged with Austin to form the British Motor Corporation, the largest producer, which also produced the Austin, Austin-Healey, Morris, Riley, Wolseley. It added Jaguar in 1966. BMC specialized in small, economy sedans and sports cars, with 4 cylinder engines. It merged in 1968 with rival Leyland. Another rival was the Rootes group, with the brands Sunbeam, Talbot, Hillman, Singer, and Humber. [8]
Ford opened a plant as early as 1911 and soon had 40% of the British market. General Motors entered in 1925 by buying up two small companies and making the Vauhall its brand name. In 1931 Ford opened the largest auto plant in Europe near London. Ford eventually acquired Aston Martin, Jaguar and Land Rover. By 2008 it was selling off those divisions.[9] Rootes was taken over by Chrysler in the late 1960s and its brands phased out by the 1970s. The Chrysler operations were taken over by Peugeot in 1978. Nissan opened a plant in 1986.
After 1945 and the end of the Second World War, American and British firms dominated the European market. In 1950, of 523,000 cars produced in Britain, 398,000 were exported. By the late 1950s, however, the Germans were back, followed soon by the French and Italian producers, and Britain lost most of its continental market. By 1970 Japanese firms identified the British market as the first major European market to attack because of the relative weakness of the domestic car industry.[10]
Stiff competition from Japanese and German cars, a reputation for shoddy workmanship and a breakdown in labor relations brought the British companies to near bankruptcy by 1975. The government nationalized the industry in 1975, merging companies into British Leyland, which produced 40% of the cars sold in Britain, as foreign owned firms made the rest. The government provided £11 billion (in terms of 2008 £, or $16.5 billion in 2008 $) in bailouts. Wildcat strikes consumed more than 32 million worker-hours in 1977. Management cut employment in half, from 200,000 to 105,000 to cut expenses. The last bailout money came in 1988, when it had merely 15% of the home market. British Leyland turned into MG Rover, which was eventually acquired by BMW, then spun off, finally going bankrupt in 2005 ending the era of mass production by British makers. The Chinese purchased the MG brand, while Jaguar went first to Ford and now to TATA Motors; only 22,000 workers remain employed at successor firms.[11]
The gentry who bought cars before 1939 found driving was easy on rural Britain’s smooth road surfaces in its generally mild weather. The rural roads are famously narrow and winding, so cars were small with stiff springs for good handling characteristics on them. High taxes on gasoline and crowded streets encouraged smaller, fuel-efficient cars in the cities.
[edit] Japan
Japan, with its large population squeezed into very high density cities with good public transit, has limited roadways that carry very heavy traffic. Hence most automobiles are small in terms of size and weight. Nissan began making trucks in 1914, and sold cars under the "Datsun" brand until it switched to "Nissan" in the 1980s. It opened its first U.S. plant in Tennessee in the early 1980s and a British plant in 1986. It is 44% owned by Renault of France. Honda, which began with motorcycles, emerged after World War II. Its luxury cars carry the "Acura" brand. Toyota began making cars in the 1930s and is now the world's largest producer. Its luxury models carry the "Lexus" brand. Toyota is famous for its innovative, quality-conscious management style, and its hybrid gas-electric vehicles, especially the Prius, which was launched in 1997. Other major companies include Subaru, Mitsubishi, and Mazda. Japan became the world's leading auto maker in 1980, the first year since 1905 that the United States had been outproduced by any other nation.
[edit] South Korea
The South Korean automobile industry is today the fifth largest in the world in terms of production volume and the sixth largest in terms of export volume. While 50 years ago, its initial operations were merely the assembling of parts imported from Japan and the United States, South Korea is today among the most advanced automobile-producing countries in the world. The Hyundai Kia Automotive Group is today the second largest automaker in Asia only after Toyota and one of the top five automakers in the world.[12] South Korean car marques have grown to compete with top established European brands and Hyundai operates the world's largest integrated manufacturing facility. Annual domestic output exceeded one million units in 1988. In the 1990s, the industry manufactured numerous in-house models, demonstrating not only its capabilities in terms of design, performance, and technology, but also signalling its coming of age. South Korea overtook France in 2005 as one of the top five automotive manufacturing nations in the world.
[edit] World motor vehicle production
Japan 11596
United States 10781
PR China 8882
Germany 6213 (includes GM Belgium)
South Korea 4086
France 3019
Brazil 2971
Spain 2890
Canada 2578
India 2307
Mexico 2095
UK 1750
Russia 1660
Italy 1284
Thailand 1238
Turkey 1099
Iran 997
Czech Rep. 939
Belgium 844
Poland 785[edit] Top vehicle manufacturing groups (by volume)
The table below shows the world's largest motor vehicle manufacturing groups, along with the marques produced by each one. The table is ranked by the latest production figures from OICA 2007[13] for the parent group, and then by marque.
Japan) France) Japan) Italy) France)
South Korea) Japan) United States) Germany) South Korea) Japan) India) Japan) Japan)