Example research essay topic: Issues In Today’s Global Automotive Industry – 1,206 words

What are the most important characteristics of the
global environment in the automobile industry,
especially those opportunities and threats faced
by the top players in the industry? Why so? If a
list was made of the top economic sectors with the
greatest influence on the American economy, one
could make a strong argument for including the
automotive industry. A prime example of the
validity of that claim was evinced when durable
goods, such as cars, made up over 90% of the spike
in consumption at the end of 2001. (Wolkomir 34)
Since consumer spending is now the prime indicator
of the state of our economy, the success of our
auto industry is very important to the future of
our economy. In the last few years, many were
quick to dismiss stalwarts of the Old Economy. In
light of the astronomical growth of the “New
Economy” technology sector in the late 1990s, the
auto industry seemed to be filled with lumbering,
corporate behemoths. With the recent crash of the
technology sector, the automotive industry is
again in the spotlight, along with many other
manufacturing industries.

Even though sales have
been up recently, the automotive industry still
faces many challenges. These challenges must be
overcome in order to ensure the survival of the
industry’s major players. In this paper I will
discuss what GM, Ford, Daimler-Chrysler, Toyota,
and the remaining handful of smaller manufacturers
must do in order to stay on top in the future.
Each one of these companies is faced with its own
unique strengths, weaknesses, opportunities and
threats that must be properly addressed. As a
whole though, they all face similar issues. I will
address those issues in this paper. If any one of
these companies is not careful to handle these
issues in the coming years, then it stands the
chance of being absorbed by another company or
going under.

I will attempt to outline the future
of this industry in general, and what several of
the major corporations involved must do to stay on
top of the game or survive. There are literally
thousands of elements that are involved in shaping
the future of an automotive firm. For the sake of
simplicity and brevity, I have tried to divide it
into four different areas: product, market,
manufacturing, and economics. Each one of these
major areas has several influencing elements that
will shape the automotive corporations of the
future. The first area that I will address is
product. Under product the following subject areas
are included: product development and product
marketing.

Product is crucial to an automotive
company because it defines the company. The VW
“bug”, the Chevrolet Corvette, the Mazda RX-7, a
Chevy or Ford pickup, a Cadillac sedan, the
Jeep-whether a specific model or a vehicle series,
these vehicles and many others have defined
companies reputations and made for explosive
profit growth. A unique car design or excellent
brand recognition can make or break an automotive
company. An example of the significance of product
recognition can be found in the recent efforts of
Cadillac to restore its former image. A recent
article in Business Week explained it as follows,
“Lately, GM stock, up 22% for the year, is even
showing up on Wall Street buy lists. But pickups
and sport-utility vehicles can only go so far.

GM
cannot remain the world’s preeminent carmaker
without a viable luxury car.” Cadillac represents
GM’s luxury sedan line. In light of recent
explosive SUV sales, foreign luxury lines have
replaced the American luxury sedan. As gas prices
rise, American consumers invariably will turn away
from gas-guzzling SUV’s and towards sedans. If GM
wants to again dominate car sales, they will need
a luxury line. In addition, there is an even more
important reason for GM needing to have a line of
luxury cars again. “It’s not just a gold-plated
image that’s at stake.

Without a strong Cadillac
leading the way, GM will have trouble revving up
Caddy-era profit margins again. In a
profit-challenged industry, an entry-level luxury
car can earn an automaker $3,000, compared with
$500 for a midsize sedan. Top-of-the-line SUVs and
sedans haul in $15,000 a pop. That’s why Ford has
built up a luxury stable that includes Jaguar,
Volvo, and Land Rover.” (Christenza 60) In this
case, having a strong-selling line of vehicles can
restore not only the Cadillac name, but GM’s
profits in an area where it was previously
under-performing. Another element of the product
that will shape future products is technological
change. Every year automakers use different
technologies in the form of new materials, new
production techniques, and new drive train
technology.

This is part of their ongoing effort
to make a better vehicle, a more efficient
vehicle, a faster vehicle, a vehicle that handles
and brakes better, and a vehicle that is cheaper
to make. What is unique about the current state of
technological change in the industry is that
vehicles are about change in a way that they
haven’t seen for almost a century. In the next
five to ten years, all of the manufacturers will
be utilizing hybrid (Toyota, Honda, Chrysler,
Ford, VW), fuel cell (GM, Chrysler, Ford), and
electric power plants (electric will not be
implemented though until battery technology
improves greatly). The traditional four-stroke
combustion design will probably continue for some
time, but a radical change is in store for the
industry, as these alternative power plants will
make up the majority of the manufacturers product
line-up. The pressures to move to alternative
power plants come from several sources. Government
has passed and will continue to pass legislation
that defines how efficient a car must be and how
much of an automakers fleet must be low emissions
vehicles.

Just recently, Congress is even
considering legislation that offers incentives for
alternative fuel vehicles. The House energy bill
includes tax credits ranging from $250 to $4,500
for consumers who buy automobiles powered by the
hybrid engines and other technologies. The
incentives would help offset the higher costs of
such vehicles, two of which, the Toyota Prius and
the Honda Insight, are already on the market.
(Goisher A1) More importantly, consumers seem to
be ready to accept alternative energy cars. The
conflicting demands being placed upon the
automobile today are unprecedented in their scope
and number. Individuals as citizens may call upon
governments to pursue the control of automotive
emissions and fuel economy and to alleviate
problems of traffic congestion. Yet as consumers,
they may purchase large SUVs with poor gas mileage
and oppose fuel taxes that would lessen automotive
use.

The government continues to change fuel
efficiency standards and offer incentives to
manufacturers who provide alternative power plant
cars. Automakers are trying to address both sets
of customer requirements, typically through green
initiatives that are independent of their ongoing
product and operational activities. Yet the
automaker that can persuasively link their current
green strategies to a future vision of
sustainability, from a competitive, environmental,
and economic development perspective, may enjoy a
strong advantage in both corporate reputation and
consumer attractiveness. Opportunities certainly
exist. New drive train technology, by disrupting
the dominant vehicle design, may spur product
innovation and create openings for new entrants.
New lightweight materials can lessen the tradeoffs
associated with green vehicles. The green goals of
recycling vehicle content and minimizing the
environmental impact of manufactu ….

Research essay sample on Issues In Todays Global Automotive Industry