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May
8

BERA: Issue 2 Automotive Industry: Global Automotive Industry

Increasing global trade has enabled the growth in world commercial distribution systems, which has also expanded global competition amongst the automobile manufacturers. Japanese automakers in particular, have instituted innovative production methods by modifying the U.S. manufacturing model, as well as adapting and utilizing technology to enhance production and increase product competition.

There are a number of trends that can be identified by examining the global automotive market, which can be divided into the following factors:4

Global Market Dynamics – The world’s largest automobile manufacturers continue to invest into production facilities in emerging markets in order to reduce production costs. These emerging markets include Latin America, China, Malaysia and other markets in Southeast Asia.

U.S. automakers, “The Big Three” (GM, Ford and Chrysler) have merged with, and in some cases established commercial strategic partnerships with other European and Japanese automobile manufacturers. Overall, there has been a trend by the world automakers to expand in overseas markets.

Industry Consolidation – Increasing global competition amongst the global manufacturers and positioning within foreign markets has divided the world’s automakers into three tiers, the first tier being GM, Ford, Toyota, Honda and Volkswagen, and the two remaining tier manufacturers attempting to consolidate or merge with other lower tier automakers to compete with the first tier companies.

1st Tier Company Mergers – Volkswagen-Lamborgini; BMW-Rolls Royce
2nd Tier Company Mergers – Chrysler-Mercedes Benz; Renault-Nissan-Fiat
3rd Tier Company Mergers – Mazda-Mitsubishi; Kia-Volvo

This section presents literature that examines three major automotive markets in North America, Europe and East Asia. This material is intended to provide a thorough examination of industry trends, structure, and the effects of global market dynamics of the automotive industry within each region, as well as their interrelationships, followed by literature researching the East Asian automotive market.

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Research on the Global Automobile Industry

The Beyond BRIC Auto Markets: A Close Look at Four Clusters: An In-Depth Look at the Challenges and Opportunities. Boston Consulting Group, October 22, 2013.
https://www.bcgperspectives.com/content/articles/…_close_look_four_clusters/ External Link

The full report is only available to subscribers but this is looking at BRIC countries – Brazil, Russia, India and China.

Fitch Solutions
https://store.fitchsolutions.com/autosExternal Link

Fitch Solutions (formerly BMI) produces industry reports by country available for purchase online.

Global Auto Report Scotia Bank, March 13, 2017.
http://www.gbm.scotiabank.com/scpt/gbm/scotiaeconomics63/GAR_2017-03-13.pdf External Link [PDF format: 287 KB/9 p.]

Brief overview of the automotive industry worldwide.

Hashmi, Aamir Rafique and Johannes Van Biesebroeck. Market Structure and Innovation [electronic resource] : a dynamic analysis of the global automobile industry. Cambridge, MA : National Bureau of Economic Research, c2010.
LC Catalog Record: 2010655999
Full text on NBER web site External Link

This is a study of the relationship between market structure and innovation in the global automobile industry from 1982 to 2004.

Hiraoka, Leslie. S. Global Alliances in the Motor Vehicle Industry. Westport, CT: Quorum Books, 2001.
LC Call Number: HD9710.A2 H57 2001
LC Catalog Record: 00037269

This study examines the origins, consequences, and trends of globalization in the motor vehicle industry, with chapters on transplants from Japan, US recovery, the DaimlerChrysler merger NAFTA,

Apr
13

Transportation as a Civil Rights Issue

Many things come to mind when you think about transportation: Traffic, congestion, mass transit and the cost of fuel, to name a few. You might also think about the economy, urban planning and the environment. Yet one thing often is left out of the discussion: civil rights.

The Leadership Conference on Civil and Human Rights lays out the case for transportation as a civil right in a report, Where We Need to Go: A Civil Rights Roadmap for Transportation Equity.

The way the conference sees it, access to transportation is key to connecting the poor, seniors and those with disabilities to jobs, schools, health care and other resources. It is essential to widening opportunities for all. Many of us take our mobility for granted, but getting around can be a real challenge for millions of Americans.

This is a key issue as Congress considers the surface transportation reauthorization bill, which essentially maps out federal transportation spending and priorities for the next six years.

“Smart and equitable transportation systems connect us to jobs, schools, housing, health care services — and even to grocery stores and nutritious food,” Wade Henderson, president and CEO of the conference, said in testimony presented to the House Highways and Transit Subcommittee. “But millions of low-income and working-class people, people of color and people with disabilities live in communities where quality transportation options are unaffordable, unreliable, or nonexistent.”

According to the report, the average cost of owning a car is just shy of $9,500. That may not sound like much until you realize the federal poverty level is $22,350 for a family of four. One-third of low-income African-American households do not have access to an automobile. That figure is 25 percent among low-income Latino families and 12.1 percent for whites. Racial minorities are four times more likely than whites to use public transit to get to work.

Yet the federal government allocates 80 percent of its transportation funding to highways.

“This is the civil rights dilemma: Our laws purport to level the playing field, but our transportation choices have effectively barred millions of people from accessing it,” the report states. “Traditional nondiscrimination protections cannot protect people for whom opportunities are literally out of reach.”

Americans in the lowest 20 percent income bracket – many of whom live in rural communities – spend roughly 42 percent of their annual income on transportation, according to the report. That figure is 22 percent for middle-income Americans.

Land use patterns contribute to the transportation divide. By focusing so much spending on highways, we’ve created decentralized communities. This is not, by itself, a problem. No one’s arguing everyone should live in cities. But we’ve underfunded mass transit and built minimal infrastructure for the 107 million people who walk or ride bikes to work each day.

(That’s a whole ‘nother issue: Americans make about 10.5 percent of all trips on foot, and only 1.5 percent of federal transportation funds are allocated to retrofitting roads with sidewalks and crosswalks even though pedestrians account