The global automobile industry has hit a recession in recent years. Car producers are having trouble finding automobile buyers, even in countries such as China and India, their biggest targets. With the lack of car manufacturers in these two nations relative to their sizable populations, automobile companies should not have a problem selling cars in these countries, and yet, sales have dropped more than 4% in the automobile industry worldwide. Not only is there a drop in sales, but automobile companies are working together to stay alive. Companies like Fiat and Peugeot, two Italian manufacturers, are merging to make ends meet. Volkswagen and Ford have teamed up to produce more marketable electric cars. These factors prove that automobile companies are facing a crisis, which may be presage for the end of their era.
Automobiles have been the main source of transportation in the past few decades. However, there has been a huge decrease in the number of car purchases in recent years. A huge factor is the use of smartphones to call transportation, such as Uber and Lyft. Not only has this affected the taxi industry, but it has affected car companies as well. With easily accessible transportation services, people are losing incentive to purchase cars. The cost of purchasing an automobile outweighs the price of using a rideshare app. Customers, especially teenagers, are choosing to ride with Uber and Lyft rather than purchase their own car. This has been a huge loss for the car industry.
Another factor that has affected this phenomenon is the increasing awareness of climate change. People have begun to notice the effects of global warming and pollution, especially with the recent catastrophic fire in Australia. For example, people in wealthy cities are against the idea of purchasing more cars. Not only has the number of cars had an effect on the rates of pollution emission, it’s also affected traffic congestion. Traffic has become especially troublesome in wealthy cities such as New York and Los Angeles. As a result, the people living in these cities are more inclined to use car sharing programs or other forms of public transportation.
To address the concerns of environmentally conscious people, automobile companies are trying to make energy efficient mobiles, such as hybrid and electric cars. However, electric cars cost more to produce than conventional cars. As a consequence, there is an effect on the sale prices of these cars, making it harder for consumers to purchase them. These cars also require fewer workers and a shorter supply chain, having a negative effect on the unemployment rates and international trade. Therefore, these factors also attribute to the phenomenon of the decrease in automobile consumers.
All in all, automobile companies need to make changes in their business models and technological reconfigurations if they want to survive in the market. These companies need to find ways to efficiently produce cars that meet the demands and wants of consumers while maintaining low production costs. Consumers, especially in contemporary society, are aware of the effects of automobiles on the climate and traffic congestion. However, the high production costs of these energy efficient cars are an obstacle these automobile companies must overcome to survive in the market.