Help me with my investigation on the American automobile market!!!!!!!!..............?

Question

It´s an investigation on the current state of the american automobile market:
What is happening with the local companies?
What role is Toyota playing in this case?
What economical phenomenom can explain what's going on?
What has been the response of the local companies?

Answer 1

Here is a testimonial for Toyota. My husband and I have a 2003 Toyota Corolla with 73,000 miles on it. The only thing we ever need to do is change the oil. Wonderfully reliable.

We also have a 1992 Toyota Paseo with 226,000 miles on it. Runs great and is totally relable, too. The only thing that ever went wrong with it is the air conditioner. So, we just don't drive it in the summer.

Sooooo......I am hooked on Toyotas. They are designed for safety and reliability. While Detroit was asleep at the switch for building the vehicles we want to own, Toyota did it. Toyota builds most of their vehicles in the U.S. by American workers. Ask anyone living in Evansville, Indiana how the Toyota Truck plant spurs their economy?

Bottom line. Toyota just does it better. They should go back to their old motto, "Get your hands on a Toyota and never let go!" That is so true!

Answer 2

The local domestic companies are General Motors, Ford, and the Chrysler group of Daimlerchyrsler (Chrysler merged with Daimler some years ago, but it's likely it will be spun off again in the near future).

They are all suffering financially and generally losing market share to the competition, especially the Japanese companies Toyota and Honda. The American companies have usually been unprofitable in recent years, and all of them (profit or not) have been suffering negative cash flow to a degree that threatens their continued existence, if they do not turn things around.

Toyota is merely the strongest competitor; it has been gaining market share from all the U.S. companies. Toyota is perceived to make better, higher quality cars, at better value, that simply do a better job of satisfying consumer demand. Some things are in the eye of the beholder of course, but it is indisputable that used Toyotas retain value and fetch higher resale value that any American car.

Economically, many many factors have led us to this point, relating both to the cars themselves and to the way the U.S. companies have been managed. Almost more than I could list but here are some things:

- clearly the largest single factor in the demise of the US auto industry is the labor unions. U.S. autoworker labor unions have used their monopoly labor power to gain far too much benefits and money, which makes it difficult for US companies to make cars profitably and has created enormous legacy costs for the car cos. Unions also make it impossible for US car makers to be flexible and make swift changes in design and manufacturing.

- The companies themselves lost focus on making good quality cars for a lot of reasons:
-- Generally they have too many models and too many brand names, which dilutes their efforts and attentions, & of course must lead to massive corporate infighting over every detail.
-- Ford and GM launched financing arms like GMAC. This divided their attention -- are they car makers or banks? You can't be good at being both.
-- All the US makers were so focussed on the lucrative truck and SUV market that they lost the ability to design and profitably make good small cars. The rising price of gas has exacerbated this situation.

- In general the US car makers have responded to foreign competition by whining to the government and demanding protection, and by trying to appeal to patriotism among American consumers, rather than doing what a real company would do -- improve product.

I could go on but I'll stop...