Automotive industry crisis in english

Páginas: 10 (2277 palabras) Publicado: 30 de noviembre de 2009
“Industria Automotriz”

The automobile industry is responsible for the design, development, manufacture, assembly, marketing and sale of automobiles. It is a major employer as well as direct labor it requires, affects a whole industry of auto parts in parallel, so the indirect labor is very great too.

In 2006 there were made more than 69 million motor vehicles in the world. In the same yearsells were about 16 million new cars in the United States, 15 milllones in Western Europe, 7 million in China and 2 million in India. In 2007, markets in Canada, USA, Western Europe and Japan showed no growth in sales, unlike the booming markets of South America (especially Brazil), Eastern Europe (especially in Russia and Asia (South Korea and India).

Here are some of the most important firmsof automotive industry, there are a total of 40 Brands of Cars in the World.

The automotive industry crisis of 2008-2009 is a global financial crisis in the auto industry that began during the second half of 2008.
The crisis has beaten mainly to the U.S. auto industry and, by extension, Canada and Mexico due to the Automotive Products Trade Agreement, but other automakers, particularly inEurope and Japan, are suffering from the crisis.

The automotive sector was weakened, first by the substantial rise in prices of automotive fuel related to the rise in oil prices since 2004 that caused buyers to avoid buying sport utility vehicles (SUVs) and pickups main sector "Big Three" (General Motors, Ford and Chrysler).

The U.S. automakers also suffered from significantly higher salariescompared to their counterparts, including wages, benefits, social security and pensions. In exchange for a peaceful work environment, management granted concessions to their unions that they meant an uncompetitive cost structure.

In 2008, the situation became critical due to the global financial crisis and the resulting credit crunch put pressure on commodity prices. In some countries,particularly in the United States, the Big Three were under strong criticism because they had failed to correct the inefficiency of SUVs in terms of fuel consumption, despite the increase in oil prices. Consequently, both suffered from a perception of consumers being able to obtain relatively higher quality models abroad (especially Japan and to some extent, Europe)

The Big Three had neglected thedevelopment of passenger car and, instead of that they focused on light trucks because of improved profit margins to offset higher labor costs significantly, so were significantly delayed in these market segments in relation to Japanese automakers and Europeans.

SUV sales were in top in 1999 but they have not returned to that level since, due to high gasoline prices. They were slow to introduce newvehicles on the market, while the Japanese were and are considered leaders in the production of smaller cars in terms of better fuel efficiency. They have faced constant financial losses, ‘The Big Three’ have closed many factories and drastically reduced employment, especially in Michigan. (The state is the largest producer of cars and trucks in the United States).

They have been heavilydependent on considerable incentives and subsidized loans to sell cars, which was crucial to keep the plants running, these have risen the sales, but have also cut benefits. The subprime mortgage crisis and oil prices in 2008 resulted in the collapse of the selling of trucks and SUVs.

On September 30th 2008, the first loan package to automakers was signed with a total value of $ 25 billion USD withlow interest rates to help U.S. manufacturers to produce more efficient cars and trucks over the fuel and on October 3rd 2008, Obama said he wanted to double the loan guarantees to U.S. auto industry of $ 25 billion to $ 50 billion. Steven Rattner leads with about 20 people the rescue of Chrysler, GM and the industrial restructuring. The Treasury Department announced that the U.S. was...
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