Changes in Global Business

The Automotive Industry

History of the Automotive Industry

The automotive industry entered Canada through the U.S. The big car manufacturers of the states were imported to Canada duty-free through the auto pact. This allowed any car owned by a U.S company to import to Canada without any tariffs. In the 1970s however, a gasoline shortage caused prices to rise, which lead to an increased demand for smaller, more fuel efficient cars. The big three companies (Ford, Chrysler and General Motors) finally had a reason to be competitive. Their fuel consumption figures were far below other imports so more consumers began to move to imports. Eventually the realization came that imports were not only more efficient, but safer and better built as a whole. With the increase in imports, Japanese car manufacturers complained about the huge tariffs they paid even if their cars were manufactured in North America simply because there was no American ownership. This caused the Auto Pact to discontinue. As for the impact of international business on the industry, the industry only began as a result of international trade as no Canadian owned cars have ever existed. The industry exists here, and is sustained by international business.


Technological changes within the industry

With the countless little gadgets that technology provides, car manufacturers have found the way to being unique. Car manufacturers today can be seen producing 27 different shades of ambient lighting in their cars, or cars that act as a wifi hotspot, or cars with a 10 function massage chair, or cars with a night-vision feature. These little features seem unnecessary to many, but it allows cars to stand out by providing little things that may not even be used, but act simply as a cool feature to have. These features have provided the basis for some car models’ success entirely on their own.


New Processes

New processes in the aspect of distribution plays a big role in the automotive industry today. Many higher-end car manufacturers deliver cars to the customer rather than having customers pick them up from the dealership. Examples are Ferrari, Lamborghini, Audi (for certain cars) and many others. This exclusivity factor adds hugely to the experience of buying the car and allows car companies to set up fewer plants as they will be shipping cars anyway. This exclusivity also pulls in customers in an odd way. One of the key factors of buying an expensive is the rarity of the vehicle, so adding to that feeling is an almost effortless way for the dealer to add to this feeling.


New Attitudes and Concerns: Environmental Concern

Concern for the environment is a game changing attitude-shift as it has brought out whole new markets which, 50 years ago were considered ludicrous. The simplest example of this can be the sub-market of electric cars. Tesla motors is a multi-billion dollar company and its sales are based on the idea that cars can be driveable while protecting the environment from the ill-effects of gasoline powered cars.

New Attitudes and Concerns: Health Concern

Watching old movies gives all of us the semi-true impression that the 1960s were incomplete without cigarettes. Today however, laws are being put into place to actively restrict the impact that smoking can have on health. This new attitude towards smoking has made ‘smoke-free’ cars more valued on the classified market. Car companies saw this opportunity and have decided to step up to this challenge for their customers and have fitted their cars with air purifiers so customers can enjoy smoking without ruining the resale value of the car.


Social Attitudes

As social trends go, there are a number of trends that we can all see quite clearly in the direction car manufacturers take when selling their vehicles. This being said, all the methods point to establishing brand name. The social attitude that has become prevalent towards cars is that they are a representation of who you are as a person. The same way many critics discuss the consumerist culture we see today, they could quite accurately apply this culture to the automotive market. Cars with an established brand focus most on reminding people of the brand rather than discussing features, or stats that actually make their cars great. The easiest example is BMW. They talk a great deal about the ‘ultimate driving experience’ but never explain it, they simply state is existence next to a BMW badge. Car makers that don’t have an established brand name advertise in the form of comparisons. They continually highlight features that highlight their superiority compared to other brands.