What Are The Challenges Of The Automotive Industry

The Automotive Industry in the United States continues to face several environmental challenges as it moves into the future.These challenges come from regulatory changes, demographic shifts, technological advances, global competition, and sociocultural perceptions.

Starting in the 1960's, there have been several major legislations passed which seek to increase passenger safety and also protect the environment. (Highfill, Baki, Copus, Green, Smith, Whineland, 2004) In 1966, the National Traffic and Motor Vehicle Safety Act established a set of "rules requiring installation of seat belts for all occupants, impact-absorbing steering columns, padded dashboards, safety glass, and dual braking systems.” (Olmstead, Todd, 2004) Since then, regulations concerning fuel economy and engine emissions have been passed, as well as increased regulations regarding vehicle safety. The challenge for the Automotive Industry here is to not only keep up with these regulations, but also to attempt to predict them and innovate higher standards on their own, and therefore avoid expensive redesigns and recalls. Safety and

There is a very high barrier to entry into the industry, making new competitors very rare. Parts suppliers have very little bargaining power, due to the wide variety of parts required to keep all of the vehicles running. There are very few realistic substitutes for automobiles; walking, bicycles and public transportation are not available or plausible for those outside a major metropolitan area, making automobiles the method of choice to get around. Lastly, there is an intense rivalry among the major competitors, and therefore strong brand loyalty among consumers. All in all, the Automotive Industry in the United States has challenges and strengths in equal measure. (Highfill, Baki, Copus, Green, Smith, Whineland,