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Weekly Case Analysis #1
Auto Industry This article describes the situation of the global auto industry in 2009. The industry was facing new challenges brought on in large part by the housing market collapse. The collapse of the housing market left many people scared to invest and scared to spend. Trust had been lost in banking institutions and no one was ready to take on new loans at this time. This meant demand for high priced items, such as automobiles was down in the United States of America. The United States and the global automobile industry were suffering big losses. United States auto sales were down eighteen percent from 2007 to 2008, while France’s automobile sales were down 15.8 percent from the previous year. The Big Three automobile companies in the United States, Ford, General Motors, and Chrysler, had dominated the market up to this point, but was starting to lose an edge to many foreign automobile manufacturers. Many foreign automobile companies, like Honda and Kia, were moving in on this gap that had been left by Ford, General Motors, and Chrysler. These foreign companies were able to continue to profit while Ford, General Motors, and Chrysler suffered losses because they were not stuck in an old business model like the older companies. They were able to find out what the consumer wanted and what would be most sustainable long term. Ford, Chrysler, and General Motors got caught up in doing what had always been successful and did not look at changing their business model until it was too late. Now, the Big Three are fighting to catch up to other automobile manufacturers in terms of technology and the future of their automobile lines. These three companies are beginning to adopt techniques and ideas that should have been incorporated long ago, not when you realize the competition has already passed