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Automotive Industry Research Essay

2220 words - 9 pages

Through the years, various automobile makers have come and gone. Hudson Motor, Auburn Motor, Essex Motor, and Duesenberg are just to name a few automobile companies that have failed through the years (Sullivan, 2008). The competition has been fierce between different automakers, whether it is with Ford, Mercedes-Benz, Honda, or General Motors (GM). Each company strives to make a car that will not only sell at a reasonable price, but also appeal to the consumer. Now the U.S. automotive industry is financially struggling and may mark an end to an era.
Currently Chrysler, Ford, and GM are struggling so much so right now that the manufacturers are temporarily closing doors in an effort to ...view middle of the document...

D.) while a Ford Model T sold for $825 (Henry Ford Estate, 2008). While the majority of people drive a vehicle today, the cost is still out of reach for many people even though automakers have dropped the selling price of a new car to an average of $25,362 (New car prices fall at fastest rate ever, 2008).
In an effort to increase sales, automakers are resorting to various rebates or incentives. Hyundai recently announced that those who finance a new Hyundai car and find that they are unable to make payments; the consumer now can return the vehicle to the dealership (Strumpf, 2009). While there are conditions, consumers may like the return policy enough to make a purchase. Manufacturers are taking loses on most 2008 models that are still on lots. GM and Ford are offering $14k - $18k off certain types of cars, trucks, and sprout utility vehicle (SUV). With the amount of inventory from 2008 that is still sitting on dealership lots, manufacturers are getting creative. They are offering 0% financing or cash rebates as incentives (Bunkley, 2008).
It is not just the auto manufacturers themselves experiencing financial difficulties. The dealerships are also facing troubles. More than 650 dealerships closed in the first 10 months of 2008. Bill Heard Enterprises, one of the nation’s largest Chevrolet dealerships closed all 13 showrooms in various states including Texas and Florida. National Automobile Dealership Association expects that the 2009 year to see even more casualties (Bunkley, 2008). While sales are down, the service and parts departments are seeing an increase in business as people are driving cars longer which means cars need parts and work completed.
The world has been fascinated with automobiles since the late 1800’s when Karl Benz created the first motor powered vehicle. However, it was not until 1908 when Henry Ford created the Model T that the majority of people could actually afford a car. Henry Ford was an engineer who saw that the automobile was gaining popularity. Henry Ford said, “When I am through everyone will be able to afford one, and just about everyone will have one. The automobile will be taken for granted.” Amazingly, he was right (Cunningham, 2005).
Henry Ford started the Ford Motor Company in 1903. In the first year of business, Ford Motor sold more than $1 million in cars alone. However, the company did not gain popularity until 1908 when they created the Model T with a selling price of $825. Because of the Model T, Ford became the top U.S. auto company ahead of GM (Cunningham, 2005). Eventually through mass production and assembly line production, Ford was able to reduce the selling price to $260 in the mid 1920’s (Henry Ford Estate, 2008). This enabled everyone including Ford workers to buy a car (Cunningham, 2005).
Throughout the years, automakers have struggled trying to balance between employee needs, reduced costs, and consumer likes. In an effort to keep workers on the production line, Henry Ford doubled the...

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