The Car Industry in the 1990s Essay Example | Topics and Well Written Essays - 2750 words

The Car Industry in the 1990s - Essay Example The political factors that affect cars and car manufacturers have become one of the major impacts on the industry. Government laws and regulations had been continuously set in place as compelled by increasing concerns for the safety of the consumers and users as well as for the protection of the environment. Because of consumers’ clamor, almost every concern that cropped up over the years that relates to the car, there is a corresponding bill that is passed or a regulation that is being enforced. This includes not just safety issues but also economic concerns such as the rising cost of petroleum or environmental alarm like gas emissions. Taxes, duties and subsidies also play a major part in the factors that exert themselves on the car manufacturers and the industry in general (Highfill et al, 2004). The huge impact of the auto industry to the country’s economy cannot be ignored. A study revealed that the industry supports other jobs in other industries (Gale, 2004 as cited by Highfill et al, 2004). However, the industry itself is faced with so many economic challenges. At present, even if the European market could increase or decrease depending on the specific economic climate, the scenario of over capacity if the market demand is low is always a real threat. The entry also of imports is a concern to the European based car manufacturers. This is especially so because of price competition which is the prevailing competitive advantage of imports (Trends and drivers of change). The economic downturn had been one of the greatest influences in the economic aspect of this industry. A research from Uswitch.com, an independent price comparison and switching service reported in 2008 than 77% of the motorists put a halt to their plans of acquiring a new car (Ganly, 2008). The economic aspect of the automobile industry is largely affected by oil prices also. Thus, it is a  very important factor in the demand for cars.   An increase in prices might put a brake on their sales potential while the reverse could boost the demand for the product.   (Sector futures, 2004, p2).