Automobile Industry
There is no industry more present in the world-wide community than the
automobile industry. The automobile has changed the lives, culture, and economy
of the people and nations that manufacture and demand them. Ever since the late

1800s when the first "modern" car was invented by Benz and Daimler in

Germany, the industry has grown into a billion dollar industry affecting so many
aspects of our lives. There are more than 400 million passenger cars alone on
the roads today. During the early part of the twentieth century, the United

States was home to more than 90 percent of the world’s automotive industry,
but has shrunk to about 20 percent in today’s world. This drastic change has
occurred by the booming economies in such nations as Japan, Germany, Canada,

France, Italy, and other nations. The US auto industry "sales totaled $205
billion, or 3.3 percent of the total Gross Domestic Product." (Tardiff 394) By
the end of 19th century, there were about 500 auto manufacturers, but that
number dropped sharply to 23 by 1917, and today the Big Three dominate the
market. Ford, General Motors, and Chrysler make up the Big Three which account
for 23 percent of the world’s motor vehicle production in 1997, with the

Japanese industries coming in second, producing 21 percent. Germany produces 9
percent, Spain, France, South Korea, and Canada each produce 5 percent of the
international market in 1997. In the US alone, the auto industry, which includes
it’s 500,000 car-related businesses, create 12 million jobs. The automobile is
clearly an oligopoly, but each company’s control of the market has gradually
diminished because of rising foreign competition. The US has three main auto
manufacturers, Japan has five major producers as does Germany. Each of these
companies produce differentiated versions of the same product, have control over
their products’ prices, and rely heavily on non-price competition. Each
company produces a new line of cars for each model annually. There are many
different types of cars, like sedans, station wagons, Sport Utility Vehicles (SUV),
two-doors, and four-doors, but by comparing models between two competing
companies, you can see how great the similarities are. The auto industry can
still thrive even though it’s products are so similar because the demand for
cars is immense and continuous. People rely on cars for so many things that life
without one seems impossible, especially in the US which registered 141 million
cars in 1988, whereas Japan, the second highest, only registered 30 million. The
creation and production of a new car starts about three to four years before it
is released to the public. The initial planning stage begins in the company’s
corporate headquarters with ideas for the car from product planners and company
officials. Automotive designers draw prospective sketches of the new car, and
once approved, model makers create small scale models of the car in fiberglass
or clay, then forge life size models also in clay or fiberglass. Automotive
engineers then develop each part of the car, and mock-up builders create those
indigenous parts of the new car. Test drivers check over the entire system,
analyzing how it runs, and then gives suggestions on improving the vehicle.

Automotive engineers test all the new, specialized parts of the car, and after
all the parts are tested, plant engineers plan how to best mass-produce the new
car. Of all the people working in the automobile industry, most will be found in
this next industry which is the assembly plant. In the United States, the
majority of these assembly plants can be found in the Michigan, Great Lakes
area, and it, on average, takes about ninety minutes on the assembly line for an
entire car to be produced. When planning a new car model, the company tries to
create what the consumer wants. This is very difficult because as stated earlier
it take between three and four years to develop a car. When General Motors
begins developing a new product, it starts by assembling a new team to
coordinate the production. After this team is assembled, millions of dollars are
spent on dispensing and analyzing public surveys, private firm’s own research,
government research, and past car sales to determine what the consumer wants.

These specifications include physical dimensions, cost, fuel efficiency,
comfort, market price, appearance, and performance. GM then would go on to begin
producing the car. The most time consuming step when creating a new model is
supplying the specialized pieces of the new model. Some of the parts can be
carried over from previous models or other cars, but many times the company has
to either create the new pieces themselves