CARS COMPARISON 13
Outlinefor Cars Comparison
Outlinefor Cars Comparison
I.Introduction
- Automobile industry has played and continues to play a significant function in the modern industrial economy. It has plays an important role in shaping the built and natural environment. In the modern economy, automobiles offer reliable, rapid and convenient methods of mobility to the increasing population. For these positive roles they play in shaping the modern economies, automobiles are also blamed for other pressing issues, largely environment related (RFF, 2003). Automobiles are a major source of air pollution as well as congested roads particularly in urban areas where there concentration is high. Since the 1960’s, the United States has witnessed mass production of automobiles that was precipitated by a renown automobile guru, Henry Ford who introduced an assembly line that was the standard automobile mechanism. Growth has been recorded since 1973 to present with the automobile industries making lean production that was started by Toyota (Demeter et al, 2007).
Research Question
Amajor focus of the research for this presentation is the role thatthe Automobile industry played in the United States and China. Thegrowth of the automobiles in the two countries also poses a questionin mind for research, as well as the impact of the industry in thetwo countries. The research question for this presentation is asfollows
Whatrole and impact has the automobile industry made for the economies ofthe United States and China?
Thisresearch question brings the following questions in mind as a guidethe research of the automobiles in the two countries
What role has the Automobile industry has played and continues to play in the modern American and Chinese economies?
To what extent has the automobile industry grown in the recent years in both the United States and China?
What negative impact has the automobile industry made in the two countries
II. The Body
- The growth in the automobile industry since in the 1960’s to present. .
Source:Motor Vehicles and the environment: Growth of motor vehiclesworldwide since 1960’s. http://www.rff.org/files/sharepoint/WorkImages/Download/RFF-RPT-carsenviron.pdf.(Accessed on 14 May 2016)
Thegraph above indicates the growth rate of the automobile industry thatis at a steady growth of about 3% per year. The figure aboveindicates that such automobiles such as cars, buses and trucks thatare close to 800 million in the year 2002 that rose from about 100million in 1960 (Statistics, 2016). However it is important tounderstand that the growth rate of buses and trucks is higher thanthat one of cars. In addition, that growth rate is expected tocontinue steadily in the next years. In Germany, the forecast on thisgrowth is expected to increase above 50% through the next 10 years(Statistics, 2016). The vertical scale indicates the number ofvehicles in thousands.
III.Automobile’s contributions to employment opportunities to theeconomic cycle
Source:OECD (2016). Valueadded, employment, exports by sector in OECD economies, 2016.https://www.oecd.org/eco/outlook/44089863.pdf.(Accessed on 14 May 2016)
Inthe economic sector, the automobile industry normally represents asmall percentage in the overall size of the OECD economies. This isin terms of employment and value added services, however there isgreat variance across different regions. In this regard, theautomobile sector supports about 4% of the total output in China andJapan while in countries like the United States, it is close tonon-existence. However, the industry is to account for 2% employmentopportunities to individuals working in the automobile sector. Inaddition, the higher percentage of employment opportunities isrecorded in the value chain such as maintenance, insurance andfinancing.
Source:OECD (2016). Valueadded, employment, exports by sector in OECD economies, 2016.https://www.oecd.org/eco/outlook/44089863.pdf.(Accessed on 14 May 2016)
Itis important to understand that in the recent periods, the automobileindustry has been undergoing a lot of difficulties particularly bythe main American automobile producers. These three big Americanproducers had been specializing in producing large automobiles.However by 2008 with the rise of oils, the cost of producing becamehigher as material costs rose sharply. In addition, there was asudden shift of customer preference. More customers were demandingsmaller vehicles which further led to increase in problems to theAmerican automobile companies. Moreover, there was high debt burdenhuge labor costs and fixed capital, pensions and retirees’healthcare policies increased these problems (Geffer and Rothenberg,2000). This saw the United States to be filled with saturated marketform the discounts offered on sales of vehicles of previous decade
IV.The Relationship between automobiles and the existing business cycles
Quarteron quarter growth: comparison between automobile growth rate in theUnited States and China.
China
Source:OECD (2016). Automobile production growth, 2016.https://www.oecd.org/eco/outlook/44089863.pdf.(Accessed on 14 May 2016)
Thereis a positive and strong relationship between automobile industrieswith the existing business cycle in countries such the United Statesbut slightly differing in China as observed in the above figures.This relationship has been observed to increase particularly in therecent past in the United States, however there is a greatpossibility of having such kind of relationship disrupted due tochanges in the automobile sectors. It is also worth noting that thereexists a high correlation between private consumption and car salesthat is accounted for the total output particularly in the UnitedStates and China. This is because the correlation coefficient hasbeen observed to increase steadily in both countries in the pastdecades.
V. Conventional pollutants
Thereis a need to measure the extent through which automobile industrycause air damage through pollution. As seen in the previous diagrams,there has been steady increase in car ownership in both the UnitedStates and China and both cases share same commonalities as far asair pollution is concerned. This is in all areas such as causes andthe impact of air pollution. However, research has indicated thatthere exist some differences in the pollution problems itself,environmental institutions, enforcement and the existing policies. VI. Vehicle pollutants and airdamage In automobiles, air pollutionis caused directly from the vehicle fuel, which is typically neverfully combusted. The other notable cause of air pollution inautomobiles is the gas wastes that are formed and released to theatmosphere as a result of chemical processes that occur during thecombustion. The reason as to why the pollution levels vary in thesetwo countries is because of the different types of engines, fuels,types of chemical compounds and environmental factors such astemperature (Geffen, Rothenberg, 2000). For instance, the emissionprocesses of diesel and gasoline are quite different. This is becausegasoline typically produces pollutant gases such as carbon monoxide,oxides of nitrogen, volatile organic compounds, airborne and oxidesof nitrogen. However for most diesel engines the emissions arenormally VOCs and CO (Geffen, Rothenberg, 2000).IV. Conclusion
- Through the decades the automobile supplies have gained global importance particularly in the industry of Automotive. Their importance have improved so much that the demand has pushed them to take on the primary responsibility of product development, manufacturing and engineering to some systems of automobiles. This is because initially, the automobile industry was mostly comprised of automobile assemblers who integrated those parts that were produced in the enterprise. Currently, there are three main automakers worldwide namely Toyota Motor Corporations, General Motors and Ford Motor Company who have enjoyed a market share of 11%, 13% and 10% respectively (Statistics, 2016). In addition, these have significant contribution to the economic cycle through creation of employment and determining factors of economy There is a distinct relationship or link between pollution formation, emission and damages to general human health (Berry, Rondinelli, 1998). Therefore most countries like the United States and China have come up with regulatory policies aimed at controlling air pollution.
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