Automobile Industry Essay Research Paper The automobile

Automobile Industry Essay, Research Paper The automobile industry right now is not as good as it used to be a couple of years ago, where big companies such as General Motors Corp., Ford Motor Co.and, DaimlerChrysler AG delighted themselves seeing how their sales and profits increased in their quarterly report. Now instead, is the flip side of the coin, where these big companies and many others endure slumping sales, not only nationwide also globally speaking. The big question now is why is this happening, but the answer is not clearly defined yet, although many blame it on weakening consumer confidence, winter weather, a tightening of consumer credit and a decrease in consumer sales incentives, all of this followed by a misguided marketing. Last month America’s auto

industry declared a 10 percent drop in sales for the month of December 2000, making it the weakest nonstrike sales month in more than two years and matching the slowdown in other sectors of the economy, analysts said. But even worst if we see other numbers such as Ford Motor Co. car sales that mirrored those of GM at a 16 percent drop. However, light truck sales will fare a bit better at a 12 percent decline. The Burnham Securities analysts said these forecasts exclude Ford’s Jaguar, Volvo and Land Rover units. In other auto news affecting our shores, Japanese automobile exports fell 2.9 percent last month, from 1999, to make it the third consecutive year that the figures declined, said the Japan Automobile Manufacturers Association. Exports to the U.S. market have recently

been falling due to a slower economy here and Japanese cars have been losing price competition in Europe because of currency fluctuations. Passenger car exports were down 5.6 percent to 315,075 units, and truck figures were down 14.5 percent to 52,370. Of the five top Japanese automakers, Toyota Motor Co. was off 0.7 percent; Honda Motor Company was down 7.5 percent; Nissan Motor Company got hit with a 12.7 percent decline, while Mazda Motor Corporation took the hardest blow and was down 28.5 percent. Mitsubishi Motors Corp. distinguished itself as the only Japanese motor company in positive export territory, however. Boosted by the popularity of the Montero Sport SUV and Galant sedan in the United States, exports rose 40.1 percent. (numbers as of December 2000). Whether the

downward trend in exports from Japan will take a turn is uncertain. Earlier in January, officials in Tokyo declined to renew a 1996 Auto Trade Pact that increases the sales of American-made cars and auto parts in Japan. After talks ended in San Francisco, negotiators expressed their disappointment in Japan’s rejection, calling it a dangerous mistake. My fear would be for the Japanese frankly, said one U.S. trade official. “With the U.S. economy, and certainly the U.S. auto sector showing some signs of slowdown the focus of a new Congress and a new administration ought to be something of concern to the Japanese.” Ford Motor Co. is now trying to reduce operating costs, and its doing so by cutting off plants in the U.S. and Europe. For example last Friday (01/26/2001) was

known that General Motors Corp. and Ford Motor Co. would idle a combined seven North American assembly plants — three in Ohio — in hopes of winnowing bloated inventories. GM said it will temporary close five plants for the week, and these shutdowns, which GM said will affect about 14,400 workers, were previously announced. In the other hand Ford said the two van plants it will idle for next week are in Avon Lake, Ohio, where the Mercury Villager and Nissan Quest are made, and in Lorain, Ohio, where the Ford Econoline is produced. Those plants employ 4,150 hourly workers, Ford spokesman Ed Miller said. This is not only inside the U.S., Ford s Dagenham, U.K., body and assembly plant was closed and 1,400 jobs eliminated also as part of a massive restructuring effort to trim