Essay 2 Rough Draft

Cars, we use them everyday; they are the staple of our American lives. Automobiles have changed over the years, from the materials they are made of to the features they provide. From the Ford model T to the modern SUV, it's hard for one to imagine life without the automobile. The freedom and autonomy associated with owning a car is sought after all over the world. Recently, this dream has become more difficult to realize for people all over the world. Geopolitics and other factors have begun to adversely affect the automotive world affecting both consumers and manufactures alike. Henry Ford, the father of the modern car once said "A market is never saturated with a good product, but it is very quickly saturated with a bad one." The words of the Ford tycoon strike close to home of late as some of the largest and oldest car company's struggle to sell current models to a saturated market while they balance researching new fuel alternatives and new models. Although current trends in automobile manufacturing are currently evolving in many ways, global economics and the demand for oil has caused retarded manufacturing and progress in many aspects of the industry because of rise in the price of oil demand from emerging markets and the global financial crisis

The automotive industry has been hit hardest by the price of oil, which has sky rocketed over the past few years. Although the current price of oil has bottomed out due to speculation the automotive industry has suffered heavy losses as a result of lower sales and an oversaturation of large vehicles with poor fuel economy.

 

The only thing constant in the American car industry has been change. While cars have stayed the same in many respects they have continued to evolve based on the needs of the consumer and the technology available. In the last 40 years economics has been the governing force behind automobile innovation. While other factors such as safety, ride quality and styling still play a large role in design and marketing, affordability is always one of the top concerns for consumers. As a result when the market demands change from automobile manufacturers those who are too slow to respond often suffer the most. For example the oil shortage in the mid 70's forced many automobile makers to drastically change the design and fuel efficiency of their vehicles in order to meet the new demand. This event in the 1970's mimics our current oil situation today where prices have gone to over 100 dollars a barrel in the last several years. The auto industry has made great strides to adapt to these new challenges by offering flex-fuel vehicles which run on both standard petroleum and ethanol, and hybrid vehicles which are partly electric. This is great for the consumer who can now afford to not only buy a motor vehicle but also drive one.

 
 

It is not only America that has been hit hard by changes in the global economy. Other nations from South America, Africa and the Middle East have had to weather this sea of change as well. Changes in this current global economy has lead to decreased production in many developed nations, first world countries such as America, Great Brittan, South Korea and Japan, while other nations such as India and China have seen a huge increase in automobile sales and manufacturing. The demand has shifted to these emerging markets where a large percentage of the population has just recently become middle class citizens. But where does all of the capital and resources for these new emerging markets come from? Just like a pie, the global economy only has so much to go around and as these foreign markets develop many resources shift to account for a newly created demand.

 
 

 But what happens when that pie gets smaller rather than just being redistributed? The current world financial situation doesn't paint a bright immediate future for most nations as over spending and a European credit crunch has caused a ubiquitous slow down in buying in many foreign and domestic markets. This affects automobile manufacturers on several levels. In these new market raw materials to make new vehicles becomes more expensive, not only to obtain but also to distribute and to ship; in turn this leads to a trickledown effect which makes current automobiles more expensive, allows less money for research and development of new models and technology and, can, negatively impact the consumer and delay progress for changes in car design and technology.

 
 

While automotives continue to make strides in the right direction, perhaps the auto industry as we know it is already gone. The decades spent living with companies like General Motors and Ford might be coming to an end. As we emerge from our current economic rescission caused in part by the global credit crisis changes in new markets and the high price of oil we reflect on how these many changes can impact our everyday lives.