Evolution of Automotive Industry
The automotive industry is a competitive yet lucrative business industry. Everyone is designing and developing the latest revolutionary model car. Automotive manufacturers and dealers are able to price their products at exorbitant prices if they so choose because in most cases the consumer does not have a choice but to purchase a car. We all need transportation and with that in mind automotive traders basically determine product pricing.
The market structure of the automotive industry is relative to the number, size, kind and distribution of buyers and sellers (ModernIr LLC [MILLC], 2008). Needless to say the automotive industry is a very huge market. The ...view middle of the document...
Also noted in the wallstreetjournal.com article, “so far this year Chrysler has reported big declines in monthly vehicle sales, as customers switch from trucks and sport utility vehicles to small cars and crossovers.”
The main factors dictating the way in which producers in the automotive industry price their products are supply and demand. Along with the supply and demand factor companies in the automotive industry also take into account the production costs when placing a price on their product. When setting prices producers have to determine whether the product price reaches the company’s financial goals, are consumers willing to buy at the set price and the product identity. “A good pricing strategy would be the one which could balance between the price floor (the price below which the organization ends up in losses) and the price ceiling (the price beyond which the organization experiences a no demand situation)” McKinney 2006.
The creation of automotive technology over the past years has been greatly affected by
government regulations. Congressional Committees and regulatory agencies have passed rules a
and guidelines with the purpose of enhancing safety, limit air pollution, and decrease fuel intake.
The creation of the automobile has had a deeper influence globally than any other creation in this
nation. With this being said, manufactures and designers have always had to keep up with new
demands of the economy and technology. The connection Americans have with the automobile
goes more in-depth than many people can imagine, especially those who made the transition
from horse to automobile. The biggest satisfaction was personal mobility. Even with that said,
the demand for personal mobility was the foundation for the private wants for automobiles. With
the growth of communities and industries in large cities, the automobile seem to be the
solution to many obstacles getting from one point to another.
The life span of automobile regulation is young, but deep in experience. Government
regulations on vehicle have played a great role in a time of new technology. Automobiles are now safer and uses less fuel, miles per gallon Government regulations was the core in limiting emissions and enhancing safety. Because of the large support for cleaner air and more safety from consumers, Government pushed for government regulations on emissions. The modern day automobile burns less fuel and cleaner air, yet the impact from a financial point of view, is no greater now then it was before. Safety restraints, for an example airbags, were complexes and delayed by automakers for years. However, with the introduction/requirement of airbags in 1991, the consumer demand for safety evolved to fast and strong, vehicle manufacturer incorporated airbags before the deadline of cars in 1998 and light trucks in 1999.
More debate has been over energy regulation then any other regulation thus far. With the