All About the Automotive Industry

Cars and other automobiles are an industry worth over 250 billion US dollars worldwide, with production trending towards efficiency and sustainability.

5. Description

There is an incredible car culture to be found all across the globe, and the $257 billion-dollar automotive industry caters to the needs of this culture in a brilliant fashion. The industry is not only about the selling of cars and other motor vehicles, but also involves the designing, manufacturing, and repair of them as well. The umbrella of the automotive industry also includes such services as the selling of various accessories and auto parts that are significant in maintaining efficient functioning within an automobile's systems. From this, we define the automotive industry as encompassing all companies and activities involved with automobiles as stated above. Some of the biggest key players of the industry include the German-based manufacturer Volkswagen, two major automobile companies of Japan (i.e. Toyota Motor Corporation and Nissan Motor Corporation), the US-based rivals of General Motors and the Ford Motor Company, and the Italian company Fiat.

4. Location

Currently, the automotive industry is not limited to any specific geographical region, and in fact spans the entirety of the planet. However, in terms of automotive manufacturing prowess, the US automotive industry enjoys the top position, and has one of the largest automotive industries in the entire world. For example, top automotive manufacturing companies like Honda, Ford, Toyota, Chrysler and Mercedes-Benz, all have numerous assembly plants within the borders of the United States of America. Globally, in respect to a fast increasing consumer base, India and China are the most notable ones for experiencing the fastest growth in profit margins. The Japanese and South Korean automobile industries are also worth mentioning here, as South-East Asia as a whole has recently emerged as the fastest growing market for automotive products.

3. Process

The actual methods behind car production often vary between companies, vehicle types, and car models. Aside from these many variations there are some basic commonalities which define how cars are built. The automotive industry was the hallmark of Henry Ford’s assembly line method of production, and this remains true today. Cars are built in large factories wherein human activities and machine automation are combined in order to assemble the vehicle as quickly as possible. Each part of the vehicle is usually built separately, with everything assembled together into a main chassis as it moves down the production line. The aim of these factories is usually efficiency of production, though again the specifics regarding what pieces are put together, what balance of human and machine labor is employed, and exactly how efficient the overall process is will depend on the company and vehicle.

2. History

The automotive industries history began with the revolutionary invention of a feasible internal combustion engine. With such, machines began to facilitate fuel-burning within confined spaces in the 1800's. In 1823, the first internal combustion machine was patented by a London-based engineer named Samuel Brown. Later on, the sustained efforts made by American manufacturers, especially Henry Ford and his assembly line, paved the way for the mass production of cars. Following the horrors of World War II, a revival in economic growth, increased advertising channels through the new technology of television, and an expansion of the globe's highway systems resulted in marked growth within the automotive industry worldwide. What started as a novelty item in the early 1900s was soon converted into an essential consumer item. By the dawn of the 2000s automobiles could be found in virtually every corner of the globe, with more automobile manufacturing companies catering to the demands and expectations of its much larger consumer base, despite high fuel prices and strict regulations often haunting the efforts of automobile manufacturers. As per the most recent trends, investments in manufacturing of "smart" and "green" cars is on a steep rise worldwide, as vehicles proffer greater levels of convenience, safety, and sustainability than ever before.

1. Regulations

Like other industries, the automotive industry is also subjected to numerous governmental regulations within virtually every country. Most of these regulations are related to vehicle safety, emission levels, fuel economy, vehicle imports, and consumer protection. There are also a number of trade barriers, taxes, import duties and standards, and tariffs that affect international automotive transactions. For example, some of the regulations that the auto mobile manufacturers are required to follow in the US include the Federal Motor Vehicle Safety Standards (FMVSS), and the Corporate Average Fuel Economy regulations. The strict implementation of these regulations and others by the US government have resulted in higher initial costs for American car-owners. This is an obvious consequence of the use of the more sophisticated technologies that are necessary to achieve better fuel economy, adherence to more stringent safety standards, and lessened emissions of greenhouse gases. Today, many automotive manufacturers are manufacturing hybrid, clean diesel, and electric cars to boost their sales. This trend has come in the wake of further emissions standards and shifts towards a more environmentally conscious automotive consumer base.

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