Auto industry environment

The cost intention, local manufacturing procedures, and final products continue to drive the industry towards global product offerings even though national policies impact them a huge deal. A demand in light utility vehicles has driven change due to lifestyles that have evolved into a two wage family income home. Another serious challenge the industry is facing are the prices of new vehicles continuing to increase higher than the average household income.

The demand for vehicles and increasing environmental concerns will be factors that nutrition to the automobile industry as well as the anticipation of geographical changes and major organizational variations in regards to auto-manufacturing procedures. In the worldwide automotive industry there is an overcapacity problem that puts automakers in Jeopardy of experiencing financial losses since production has been increased to improve their profitability. Therefore, overcapacity has prompted the industry to merge and network alliances to minimize new investment initiatives, consolidate and streamline control and placement functions.

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The unique parts in the vehicles, different designs and production tools, the number of direct supplier relationships have all been the direct impact of shifting the industry to change. Expectations of the development of new products to facilitate the industry with automotive productive capacity to new auto industry environment By Illegally with consolidating to optimize productive capacity in the industry is that mergers usually have the complimentary products; this poses a threat to diminishing some impasses, which results in many lost Jobs.

Typically mergers from different countries also have had little success since the political forces tries to maintain domestic Jobs. Analysts are predicting that productions will reallocate from the North America, East Asia, and Europe to Brazil, China, India, and Southeast Asia countries. With the geographical shift trade liberation will smoothen the process in production and increase communication. This will introduce the vehicles to potentially increase using homogeneous components for production.

Another challenge that the automobile industry continues to face is the environmental concerns related to carbon dioxide levels and its effects. Since exact estimates haven’t been determined of the threat the impact vehicle emissions have on the global environment, overtime automakers have made safety and emission adjustments to the newer vehicles. The average fuel efficiency and smog-producing compounds have been improved over the years by automakers to address the environmental concerns and economic growth.

New technologies and products round the globe continue to develop and get applied to the production of these vehicles. Telecommunications, navigational systems, electronic fuel cells have been incorporated in modernizing vehicles in this century and will continue to integrate new technology and influence greatly the transformation of the automobile industry. Web-based and Internet communications are also expected to influence the next revolution of the automobile industry and influencing distribution channels to implemental build-to-order system fully.