Impact Of The Automobile Industry On The Auto Industry

The automobile industry throughout the years has been a major player in the economic structures of society. The industry as a whole has contributed to all areas of micro, macro, and international economics in a way that not a whole lot of industries have. The automobile industry was not created overnight by a single inventor. Numerous companies have come and gone throughout the history of the automobile. Governments have bailed numerous corporations out, the industry has unemployment due to outsourcing, and the economic profits of this industry have major factors in decision making throughout an economic landscape. There have been numerous mergers and acquisitions over the years, to name a few: Studebaker and Packard in 1954, Daimler†¦show more content†¦Ã¢â‚¬Å"USA Today reports that there were roughly 210 million licensed drivers in the United States as of 2010.†(ask.com) Most people have at least one car, but numerous people drive multiple cars making the consu mer market for automobiles very lucrative if the certain automobile manufacturer can obtain any sort of brand loyalty. The automobile industry is led by four main powerhouses in the United States. As of May 2015, General Motors has a 17.7% market share, Ford has a 15.1% market share, Toyota has a 14.5% market share, and Chrysler has a 12.5% market share so far this year. Worldwide, these numbers vary, but General Motors and Toyota are the leading manufacturers by multiple percentage points. When analyzing any industry it is best to look at Porter’s Five Forces of Competition model. In the automotive industry, there is not a whole lot of threat of new entrants to the industry. The industry has high entry barriers, which cause for new entrants to have a hard time competing with the bigger manufacturers. The economies of scale limit competition as well. There is really no threat of substitute products in the automobile industry either. An automobile provides convenience, independence, and a quicker way of getting to a destination. In some cities the threat of mass transit poses a little threat, but transit like New York, Boston, and Chicago are not readily available in rural America. There is a large amount of buyer power