The automotive industry like any other industry is dependent on consumers. In my opinion American and Japanese companies have looked at consumers and other stakeholders in different ways and thus we stand in a situation where some companies do better than others. But the big question is Are they better or worse on the basis of the demand on the market.
American cars have always made a statement they are symbolic of what America and its people represent. They are large shiny and beautiful. They are clear powerful and representative of a culture and lifestyle.
Our country has always been known for the cars we manufacture and our cars are labeled as so american because thats how we do them american.
The car companies had been the driving force for our countrys growth in the 20s but in the early 2000s. Their business for a change seems to be fragile incompetent workmanship and design out of place. In the 20th century it seems that the big car companies controlled the country and moved the mountains no longer.
When I do not say that anymore its because General Motors Ford and Chrysler have always done so well that a blink in their performance makes you feel lost. And in fact things are really gloomy were these companies faltered in giving away too much on their haystacks CEO after CEO continued to give concessions and privileges that worsen business results now. The companies are under a huge load of recurring costs that are more than their profits.
But to reflect on how they did we should look at the naked facts that these companies have been running for almost 100 years and spent almost 50 of those years in the top 10 list of the Fortune 500 magazine.
By late the difference has occurred in consumer preferences and changes in the environment. Consumers want cars that are easier to drive and economically efficient in maintaining the petrol price for sky raising.
Japanese car market
For years the business strategies of the three major car makers in Japan have been in violation of US industry and the governments trade rhetoric. With the despair of returning to the Japanese market on the grounds that it would never be enough to motivate serious efforts US companies relied on their huge domestic market and focused international efforts to build a major position in Europe.
Captivated by their own negligence in the late 1970s they covered a number of protectionist measures at home and in the past fake an aggressive agenda for scalled resuloriented trade politicians aimed at pushing Japan to meet very specific targets for both sales and the number sales outlets in the Big Three distribution network in Japan. With the introduction of the first American righhand drive vehicles in 1994 hopes like the sale of US cars jumped three major car companies almost tripled over the next three years.
But the slowdown in the Japanese economy exposed the American manufacturers weak strategic position for all to see. Sales of vehicles manufactured in the US fell by almost 18% and were even more powerful during the first quarter of 1998. This has once again aroused the language of potentially fragmented and economically harmful trade disputes as US government officials and executives blamed Japan for the decline.
Important factors affecting US car companies on the Japanese car market:
Since the bilateral agreement between the United States and Japan was reached in June 1995 Big Three has been engaged in an active process to franchise franchises close and or open 360 showrooms a number representing more than half of 60plus sales outlets in its Japanese distribution network. Despite this and in contrast to years of complaints about the need for more sales outlets the American manufacturers in 1997 ended with fewer showrooms than they had three years ago not the 177 additional stores that were canceled. This sales level is quite large for a mature market and clearly unsustainable in the long run.
Ford Japan has made the greatest commitment and the investment among the three major faces the most serious challenge due to strategic and product shortages. The company suffered nearly 40% of the sales of its US buildings in 1997 and many of its dealers are openly concerned about the lack of appeal of current models the lack of financial support from the manufacturer and the apparent lack of exciting new pipeline products.