U.S Auto Manufactures compared to foreign competitiors

US AUTO MANUFACTURERS COMPARED TO FOREIGN COMPETITORS

2007

US Auto Manufacturers Compared to Foreign Competitors

Introduction

There have been numerous discussions regarding how foreign auto manufacturers produce better and better selling cars than US manufacturers . These discussions produce similar results , in which analysts believed that foreign manufacturers have lower cost structures due to cheaper labor costs and material costs . After repeated statements of how foreign manufacturers have various reasons to outperform the Americans , these reasons begin to sound more like excuses rather than efforts to analyze the situation and

made improvements

Analysts confirm that underlying reasons why foreign auto manufacturers are in overall better then the Americans are due to their lower material cost and lower labor cost in their original production environment , but people should not forget that these foreign auto manufacturers have proven themselves by producing more fuel efficient , longer lasting and higher quality cars also

The later factor is the one we must pay more attention to in to gain a fair comparison between foreign auto manufacturers and US . This is true , especially when those foreign manufacturers have already established production facilities in US soils for years now , using US materials and complying to US labor standards , and still ahead of US auto manufacturers in terms of production cost efficiency

In this , we are reviewing the issues which relate to foreign auto manufacturers ' competitiveness against US auto manufacturers and how they manage to reach such competitive advantages . The will not focus on economic reasons only , due to the fact that such analysis has been performed repeatedly . This is a short analysis using several different perspectives , attempting to discover the real reasons why foreign auto manufacturers are performing better than US auto manufacturers , even on US soils

Competitive Advantage Comparison

II .1 . Transfer of Market Share

The American auto manufacturer industry is dominated by the Big American Three , which include Ford , Daimler Chrysler and general Motors . In 1998 these companies control 70 of the market share . But these numbers are outdated by 9 years now . Since 1998 , the market share of the big three has been shrinking and left them with only 50 in 2005 . These companies are reported to lost economic of scale due to the lost of loyal customers . This led to a chain reaction resulting the company to have less and less ability to produce cars at competitive prices and catching up on new technologies

As a further result , the Big Three 's models are now sitting on US dealers a lot longer than models generated by foreign auto manufacturers . For instance , surveys conducted in 2005 on thousands of auto dealers all over the United States revealed that Daimler Chrysler 's models generally sits on the lot for more than 100 days , GM 's and Ford 's models more than 80 days , while Honda 's models , Toyota ' models and BMW 's models were sold in average of 30 days since arrival (Weiss , 2007

Toyota on the other hand , as one of...