Spring 2015 issue of Horizons

TRANSPORTATION & DEALERSHIPS

Does Globalization Affect Auto Dealers?

Globalization…what does that have to do with my local car dealership?

If you want to buy a car, you just go to your local car dealership and pick one out. However, the typical consumer has no idea how much impact globalization has on car dealerships. Globalization has an enormous, but not always readily visible, impact on the cars we drive. Consumers who base automobile purchasing decisions on whether a car is “American” or “foreign” may have a tough time deciding where to buy. It is getting increasingly difficult to tell what an “American” car is anymore. Cars.com’s 2014 American-Made Index, which lists the top 10 American-made cars, includes four Toyotas and three Hondas, even though both automakers at one time topped industry import lists. Chrysler is owned by an Italian company–Fiat–while Ford and General Motors sell more vehicles outside of the U.S. than within our borders. The North American Free Trade Agreement (NAFTA) was intended to help the United States compete globally, but in the case of the automobile industry, it has dramatically changed the industry. Before NAFTA, vehicles sold in the United States were manufactured in the U.S. Today, it’s not unusual for vehicles to be assembled in the United States, Canada or Mexico, and include a significant number of parts assembled in another country. Takata, a Japanese company, has been manufacturing and selling defective airbags to almost every major vehicle manufacturer in the world. In the United States alone, 17,000,000 vehicles have been recalled to replace airbags that could potentially explode in a crash. In the U.S., two global tech giants, Google and Apple, are joining the competition to develop clean electric vehicles that will integrate new technology and change the future of driving, as well as vehicle development. Apple announced its goal to release an electric vehicle capable of going more than 200 miles on a single charge and cost less than $40,000 by 2017. Composite materials from around the world, developed in the aerospace industry, are now routinely used in vehicles to reduce weight, improve safety and increase gas mileage. The National Automobile Dealers Association’s held its 2015 annual convention in San Francisco, bringing together dealers, manufacturers and vendors from around the world to share ideas, technologies and innovations. Vehicle manufacturers are integrating cutting-edge computer and material science technologies into their products to deliver affordable, safe, reliable and environment-friendly vehicles. Even more astonishing is the impact that one small company on the other side of the world has had on millions of car owners in the U.S.

page 40 | horizons Spring 2015