How does the car industry evolved throughout the years in the U.S and manage to be the most profitable industry in the U.S. once?
Widley Marcelin
Supply Chain Business Analyst | Economist | Self- Published Author of 6
Car consumption in the U.S was so important that they even had a city for the car industry. In the past like some decades before Detroit was the city of car construction most famous in America. Having a car is in some countries like a must, in the U.S some years ago there was a plan to allow a large number of people the opportunity to get a car. I don’t think that was done just by the simple understanding that everyone needs a car to get to work on time. I think instead that it’s just part of the car industry strategies to sell more cars.
One of the pioneers in the car industry in the U.S. can be Henry Ford who comes up with his company Ford. Ford Company is one of the car companies who come up with large lines and a supply chain of production very large in the United States. They’ve learned how to produce at a larger scale to reach the satisfaction of the national demand. Those innovations allowed this company and many others to acquire good numbers from this industry.
Year after year new car companies takes birth in the States. Nowadays we could have tones of them, but some of them fail to face bankruptcy as this industry is costly and highly demanding if you want to excel in it. One of the youngest car company and somehow newcomer is Tesla motors.
In this article, we’ll try to narrate in some way the history about the car industry in the United States, their success and establishment as. We’ll also try showcasing some numbers that might help to conclude this industry throughout the years has impacted the American economy.
Presentation of the car industry and key locations contributing to its expansion
The chance to present the entire industry in this article is not too strong there are too much to say about it. So a better way to make a presentation of this industry in the U.S is just by highlighting the different meaningful numbers related to it in the states. One more point is that there are maybe more than 20 car companies (Let’s say manufacturing car) in the States.
Car companies strategies and updates to stay necessary and prevent collapse
There have been a lot more car companies in the states some years ago. Maybe during the recession from 2008-09, some of them have been ejected from the market, whether because of bankruptcy or maybe high cost that they can’t support. So for that reason, those that are still existent necessary need good and very strong strategies to face the unknown and future. The best strategy is just working on updating functionalities and also the capacities of your cars. I mean the number of people that can go inside of the car.
Let’s highlight some numbers related to the car industry in the U.S
Based on some numbers presented by www.statistica.com and www.franchisehelp.com let’s showcase the following numbers:
- In 2017, 14.8 million cars were registered in California.
- In 2018, there was 2.9 million GM light vehicle sold in the U.S.
- Ford had a revenue of USD 97 billion, only in North America.
- Other estimation proved that there are 4.2 million people in the U.S. that are employed in the car industry.
- In 2017, The U.S automobile aftermarket would worth about $ 273.4 billion (based on the estimation done by the Autocare Association).
- In 2015, there were 257.9 million passenger vehicles registered in the U.S.
How the car industry in the U.S does is adjusting itself to the world demand and competitiveness
There are many of them in the United States but also in other countries. This industry is also a very competitive one so each company has to improve their branding and their production. Some companies like newcomers are trying to innovate and update if they are not inventing new functionalities. So almost a decade ago Tesla brought in the industry the new concept which is electric vehicles and hybrid cars. So as this concept gets so famous and popular all over the world (specifically for the rich people) other companies are trying to innovate and adapt themselves to this new conception. So, by producing hybrid cars or even complete electric vehicle it’s become like a marketing strategy for car companies to attract rich people and also those who are interested in the concept of environmental protection. So, as nowadays we are in an era of propaganda for the green and production that won’t affect the sustainable development and climate change. However, luxurious car companies such as Chrysler, Cadillac, and Mercedes Benz still have loyal customers to their brand. As I previously show it strategies are required to provide enough cars for worldwide consumption. Producing in a different part of the world is also a strategy for producing at a higher scale to supply the market demand which is quite high. So, this brings different advantages to those companies that adopt those strategies. First of all, we got standardization in the production of parts. Secondly, different parts are produced quicker than if it was produced in one place. And finally, all of those different parts and materials are reassembled in the original country in less time.
An economic analysis of the different car companies and the industry overall specifically in the U.S
Scaling business has always been an economic strategy for business to increase their numbers and profit. Doing business requires two main strategies, we all may know about those strategies. The first one would be cost reduced and the second would be maximizing prices whether the business or company sell or provide service. Both of them are not necessarily applied simultaneously. Furthermore, it wouldn’t be loyal to consumers to sell them products at highest prices if we can manipulate the cost.
So in this industry, the scaling economy is one of the answers in producing at a greater scale by reducing at the same time cost and specifically the fix costs. It allows car companies not caring too much about prices, I mean not put too much accent in pricing highest fees possible.
In the U.S. another advantage cars companies have and provide to the U.S. economy is the possibility of exports elsewhere. Exporting cars help the U.S. economy is having such greater numbers, it also helps constructors and companies to improve their value internationally and contribute to the national GDP.
The car industry is one of the most profitable industries when exporting a huge number of cars. Car consumption requires some high income. International companies that are selling those products have a better chance to attract the biggest numbers than any other industry. The tech industry is an exception. The technological industry is nowadays one of the most profitable industries worldwide. However, some luxurious car companies keep having very high fees which can convert in high numbers. Rich people, those in the show business, billionaires and their luxurious tastes force them in consuming expensive products from the car industry. Their contribution is needed and important in keeping the industry or companies in this industry alive.
Widley Marcelin
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