The American automobile industry is a large segment of the American national economical growth. In this respect in the United States, this industry is the domain of three major automobile corporations, namely: Ford, Chrysler, and General Motors. The main indicators of stability and efficiency in work were the factors for the oligopoly of the automobile market in the United States. The concentration of great amounts of financial resources provides an obstacle for new firms in this industry. To be precise, these are national auto leaders of the country.
First of all, the kit is vital to mention that the automobile branch in the economy of the United States has a long history. In fact, in the 1920s the United States dominated the world’s automobile market. Since that time three giants in the industry began to compete. The governmental programs supported them. Just in the middle of the twentieth-century observers stated that the American policy in vehicle building is considered with domestic production and foreign trade (Leontief 332). American companies achieved high rates of inefficiency, and this made the decrease of prices possible. The national approach was strategically necessary. Consumers were pleased and bought cars. The term “mass market” was concerned with the decrease of prices for mass sales of cars (Studer-Noguez 16).
Another point of view is the place of corporations in terms of the process of globalization. The facilities of the American automobile companies are concentrated throughout the world. The point of the assembly line is important. The thing is that companies decided to decentralize their facilities, so that to produce cheaper parts for the automobile but with the same quality. Thus, the competition among the leaders grew. It touched upon several constituents such as price, quality, share in the market, position on new markets.
The increase in production costs was a huge problem for American automobile companies in contrast to, for example, Japanese and German ones. Low import costs made the penetration into the American automobile market possible (Rubenstein 1). Thus, the companies should act immediately in the sphere of reorganization. This is why the plants in the United States were closed in the 1980s, and new ones should be opened in Asian countries (Rubenstein 1). Hence, the strict rules of global integrity were taken into account by American producers.
Works cited
Leontief, Wassily “Domestic Production and Foreign Trade; The American Capital Position Re-Examined.” American Philosophical Society, 1953.
Rubenstein, James M. “Further Changes in the American Automobile Industry.” American Geographical Society, 1987.
Studer-Noguez, Isabel. Ford and the global strategies of multinationals: the North American auto industry. London: Routledge, 2002.