Evolution of the Global Automobile Industry

Evolution of the Global Automobile Industry
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Evolution of the Global Automobile Industry
Introduction
Since the birth of the first vehicle, the global automotive sector has seen significant innovative changes. The business has evolved from being controlled by the United States in the 1920s to being split among numerous nations in Europe and Asia, each with its strengths and disadvantages (Bharadwaj, 2018). The prevailing technology has also seen significant advancements, with the growing adoption of fuel-based, hybrid, and completely electric cars contributing to market diversification. The evolution of the automobile has seen significant innovations in technology, and changes in the market have been less oligopolistic as more nations venture into automotive production since the 1920s.
Innovations and Changes in Market Status in the Automobile Industry
In the 1920s, America’s global automobile industry was primarily held by the Big Three firms Ford, General Motors, and Chrysler, which owned the oligopoly market. The history of American manufacturing was based on vehicles being manufactured in more significant numbers and at lower prices than in Europe (Bharadwaj, 2018). As a result, Ford, General Motors, and Chrysler produced faster, more comfortable, and higher capacity cars due to engines and internal car space innovations. Since there were no trade barriers among the states, sales spread across a larger area attracting higher volumes. The early industrial process automation in America was drastically benefited and drew its might from low-cost raw materials and the availability of skilled workers. Cars in this era depended on internal combustion (IC) engines running on petrol or diesel. In 1913, the U.S. produced 485,000 out of a global aggregate of 606,124 vehicles (History, 2018). This domination demonstrated the oligopoly of the three automakers in America against the world.
In the 1950s and 1960s, foreign car models from Europe and Japan grew popular rapidly as buyers began to search for other brands of automobiles, forcing Ford, General Motors, and Chrysler to accuse the government of neglecting to assist the American automotive sector. With rising oil prices and a growing public education on environmental issues in the early 1970s, some American buyers gravitated towards less engine capacity cars and environmentally friendlier European and Japanese vehicles (Bharadwaj, 2018). Japan mainly produced automobiles for home use, with just a tiny percentage shipped outside. Japanese automaker Toyota then began to focus on smaller capacity engines of around 300cc, termed a disruptive innovation in the late 1970s, promoting higher sales revenues in America and Europe (Bharadwaj, 2018). This innovation of less capacity and more reliability in European cars such as Volkswagen and Peugeot, and Japanese Honda and Toyota saw a significant rise in revenue until the 1980s. The global market was highly competitive and m...