Automotive Industry
Current automotive market
Current market make up of the global automotive industry:
Impact on the American economy
Not so long ago, the death knell of General Motors was being sounded by many economists. However, GM has rebounded, largely thanks to its international presence, particularly in Indian, China and Russia. "General Motors [has] appeared to regain its one-time perch as the world's largest automaker. With 2011 sales of more than 9 million vehicles, it soared past Toyota, which plunged from first to fourth...as well as Volkswagen" (Eisenstein 2012). GM's sales dominate developing world nations, which shows a great deal of promise for sustained growth given that these nations' middle class populations are expanding and there are high levels of aspirational consumption. Many families have never owned cars and now desire to make their first purchase. The international market could prove more important for all Detroit car manufacturers than the domestic market.
GM sales rose 59% in India, 21% in Russia and 11% in China in 2011. "Just two years ago GM's China sales were growing at an annual pace of almost 50%" but sales have been leveling (Shirouzu 2012). One problem is that Beijing's city government has begun to more strictly limit the issuing of license plates for new cars: "it will issue a maximum of 240,000 license plates for new cars and microvans this year, about a third of the 750,000 expected for last year" to "combat congestion" (Zhang & Shirouzu 2012).
GM's astounding growth globally demonstrates how merely looking at an automotive company in terms of its sales in its country of origin does not paint a complete picture of its financial health. Purchases of SUVs overall have been increasing in the developing world, once again contradicting the demonizing of American car-companies as unthinkingly churning out SUVs that no one needs or wants. GM was particularly criticized for its lack of creativity during congressional debate over the bailout. But SUVs are beloved by the rising middle class, particularly in China. "Sales of sport utility vehicles (SUVs) in China surged 101.27%" in 2010 (China's SUV sales surge 101% to 1.33M units in 2010, 2012,...
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