Industry Analysis Case Study

US Auto Industry: Heading Towards a Dead end?

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Abstract:
The Big Three automakers General Motors, Ford and Chrysler (DaimlerChrysler AG) of the United States (US) dominated the US domestic auto market accounting for more than 70% of auto sales in 1998. However their market share took a nosedive in 2004, when they accounted for only 58.6% of sales with the Japanese automakers overtaking them.

Declining market share and high inventories forced the Big Three to reduce assemblies in North America by 9% during the first half of 2005. They were also affected by an unfavorable operating environment caused by the continuous price war and some serious cost competitive issues like increasing legacy costs and frequent disputes with the UAW.

Under these circumstances, it was top be seen if the US auto industry was heading towards a dead end, or if it had a chance of a turnaround?

Pedagogical Objectives:

• Issues faced by the US Auto Industry
• Challenges faced by the industry in entering new markets and new product categories.

Keywords : US Automobile Industry; General Motors (GM); Ford; DaimlerChrysler; Toyota; Industry Analysis Case Study; Hyundai; Japanese automobiles/cars; Korean automobiles/cars; UAW; legacy costs; The Big Three Automobile industry; Chinese cars; labour costs; bankruptcy