Monday, 26 August 2013

Domestic Cars and Foreign Cars in the USA

According to World Bank, there are 423 cars for every 1,000 people in the USA. This means, there is 1 car for every 2.3 persons. Though there are different means of transportation in the USA, people prefer to use their own cars.

When it comes to the car market in USA, competition among automakers is pretty high. Also, there is a huge demand for foreign cars.

US car manufacturers (Major)
The major players are General Motors, Ford, Chrysler, Dodge, Jeep, Ram, Lincoln, Buick, Cadillac and Chevrolet. Of these, the three big manufacturers who top the list, also known as the "big three", are:

• General Motors

- Established on 16 September, 1908 by William C. Durant and Charles Stewart Mott.

- Headquartered at Detroit Michigan, USA.

• Ford

- Established on 16 June, 1903 by Henry Ford.

- Headquartered at Dearborn, Michigan, USA.

• Chrysler

- Established on 6 June, 1925 by Walter Chrysler.

- Headquartered at Auburn Hills, Michigan, USA.

In 2012, General Motors stood first by producing and selling the highest number of cars in USA, while Ford and Chrysler shared fifth and twelfth places respectively. Foreign companies like Volkswagen, Toyota and Hyundai dominated the list with second, third and fourth places respectively. These rankings clearly show how strong the competition between the domestic and foreign automakers is in the USA.

US car manufacturers (Minor)
Besides these big car manufacturers, there are many other car manufacturers, which include Anteros, Aurica, DeLorean, Fisker, Mosler, Electro, Shelby American, Tesla and Zimmer.

Why are foreign cars sharing top rankings with domestic cars in USA?
The entry of foreign cars into the USA market started in the late 1970s and early 1980s. It started with "oil crisis" in USA in the year 1973. This crisis made people opt for fuel efficient cars manufactured abroad. During the same period, domestic cars had design and manufacturing problems. This led to the dominance of foreign cars, and people even today believe that foreign cars are better than domestic cars.

• In 1977, General Motors got a bad reputation by the revelation of the news that they installed Chevrolet engines in Oldsmobile.

• During the same period, there were reports and complaints from people that Ford Pinto's tank exploded when it was hit from behind.

• Chevrolet released a flop model "Chevrolet Vega" during the same time with an aluminum engine that got rusted very quickly.

These things gave foreign companies a chance to dominate in the US market.

Decline in oil prices in mid 1980s, the success of minivan in 1984 by Chrysler and fuel efficient K-cars raised the hopes of domestic companies.

However, the US car manufacturers, including the big three, have taken lessons from the past and are taking measures to produce good cars.

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