Section A - Analysis of Automotive Industry in Europe (700 words)
Automotive Industry in Europe at a Glance
The automotive industry is a major industry in the European economy involving a few vehicle manufacturing firms and about 2/3 of the production is outsourced to a substantial number of independent suppliers. The produce includes cars, light trucks and vans, buses and coaches, medium and heavy trucks, motorcycles and agricultural and forestry tractors.
A lot of mergers and acquisitions have been the routine of the automotive industry. Currently DaimlerChrysler, Volkswagen (VW), BMW, Ford Europe, General Motors (GM) Europe, Renault, PSA (Peugeot-Citroën), Fiat and Porsche comprise the main EU car industry. Beside them, there are a good number of small manufacturers apart from some Japanese manufacturers’ production facilities in the EU.
The EU has the largest automotive production region (34%) in the world and 7.5% of the manufacturing sector in the Union is owned by the industry. The automotive industry employs about 10 million employees (including direct and indirect) out of which about 2 million are in a direct employment.
Since 2001, The motor vehicle production has seen a significant drop in the European Union: from 17.2 million units in 2001 to 16.9 million units in 2002. Compared to 2002, 70,000 motor vehicles less were produced in 2003. The drop in the market for trucks and buses was worse than the one for passenger cars over the period 2001-2003.
The major reason for the drop since the year 2000 is basically the worsening of the macro-economic situation where consumer demands have been decreasing.
Cultural Constraints
Trade
In 2002 the EU exported motor vehicles of worth around € 66.2 billion, which is double th ...