Economics - GM

Running head : ECONOMIC FINAL PROJECT

Economic Final Project

Patricia Gacho

Abstract

The automobile industry has been a large contributor toward the way in which consumers live , with one in six or one in seven Americans being employed within the building , selling or maintenance of motor vehicles Meeting goals of the automobile industry is best achieved by analyzing the industry and subsequently evaluating economic indicators to assess the current state of the economy and how these economic elements impact the industry . By comparing and contrasting reports on designated economic indicators

, an in-depth analysis can be created to target successful business goals for effective operational and planning , as well as final recommendations and strategic initiatives for a successful industry Automotive Industry

Over the past three weeks , our team has assembled s based on specific elements relating to the automotive industry , and how economic indicators such as unemployment , interest rates , business cycles , oil and fuel , and inflation impacts the industry both present day and past For the final week the team has compiled the key elements from the previous with additional sections on in-depth analysis of how financial forecasting impacts the industry , how budget deficits or surpluses in the economy affect this industry and how monetary and fiscal policies impact the auto industry . The following will show how the automotive industry feels the affects of the economy , the changes in policies , rates and costs , and the automakers , both positive and negative feeling , on the impact

Automobile Overview

History of the Automobile Industry

It could be argued that since the development of agriculture about 12 ,000 years ago , the two inventions which have effected the way consumers live have been the electric light and the automobile (Wright 1996 . The automobile necessitated the development of roads , highways and interstates . Retail businesses grew along these roadways , because of the flow of automobile traffic . Benz in Germany was the first to put an automobile into production , a three-wheeler he built in 1885 . In the United States there were tinkerers , but no industry until 1896 (Wright 1996

Automobile Industry Overview

One in six or one in seven Americans are employed by the building selling or maintenance of motor vehicles (Wright , 2007 . Currently there are approximately 244 million vehicles operating within the United States . In 2007 approximately 806 million cars and light trucks were on the road , with estimation that by 2020 , that number will reach 1 billion (Plunkett Research , 2008

The automobile industry has recently experienced a dramatic development Inspired by escalating fuel costs , consumer demand has increased for fuel-efficient vehicles . Vehicle manufacturers have placed an emphasis on developing fuel-efficient vehicles several auto manufacturers have developed the hybrid in an effort to meet consumer demand . The desire for trucks and SUV 's has waned and vehicle sales are predominately focused on higher mile per gallon vehicles , which provide lower operating costs

Foreign-based , low cost manufacturers are impacting North American auto manufacturers . This has initiated pervasive effort in North America to reduce manufacturing and labor...