The car manufacturers of the
U.S. Automobile Industry will have to look to the developing markets around the globe, if they are to regain their 'numero uno' position in the World Automobile Industry, that has been recently taken over by the Japanese automobile manufacturers.
The U.S. Automobile Industry, which is mainly based upon the combined business of the Detroit Three – General Motors Corporation, Ford Motors Corporation, and Chrysler LLC which is an unit of DaimlerChrysler AG, has been surrendering domestic market share to foreign companies in the automobile sector, especially those belonging to Japan.
The Japanese automobile manufacturers are the major global competitors of the manufacturers of the U.S. Automobile Industry. For a rise in the prices of gas, the manufacturers belonging to the U.S. Automobile Industry suffered losses as the domestic automobile purchasing trends shifted from trucks and SUVs to smaller sized cars. Here was the chance for the Japanese manufacturers who specialize in the manufacturing of such “kei cars,” and thus, the sales of the Japanese cars overtook those of the U.S. manufacturers in their own backyard.
The domestic markets in the U.S. being almost saturated, the manufacturers of the U.S. Automobile Industry need to move out of North America, to the emerging markets where automobile sales are growing by leaps and bounds.
In addition, the production costs in the U.S. are much higher in comparison to the rest of the world, and this is the main reason behind the U.S. Automobile Industry manufacturers closing factories, reducing the number of employees on their payroll in the U.S. itself.
Similar to the model followed by the Japanese automobile giants, the U.S. Automobile Industry giants are setting up plants in the developing countries where the costs associated with production are lower along with labour costs.