The Trends in Auto Industry - Assignment Example

What are the trends in 2007 auto industry About 53 million new cars were sold around the world in 2007. 15.9 million Cars and light trucks were sold in US in same year. As the price of gasoline and petrol is rising, the market is getting prepared for adopting fuel efficient options. Such a trend has paved the way for hydrogen, electric and hybrid cars. Toyota's Prius hybrid car gained immense popularity. Toyota has planned to produce 48,000 hybrid Camrys yearly. The demand for Toyota's Lexus RX400h hybrid crossover is also gaining momentum. Many companies are trying their expertise in making a mark in the emerging hybrid car market in the coming years. Passenger vehicles in Europe are relying upon clean diesel engines like the ones manufactured by Mercedes-Benz. With the rise in car production in China, it will soon take over US car users in number. China is the leading importer of the petroleum to support the ever growing demand of the automobile industry. Other countries like Russia, Mexico and South America have also seen major growth in the car industry in 2007. New trends in car designs are evolving in the developing countries like India. The Indian auto giant Tata Motors launched the world's cheapest car called 'Tata Nano' worth around $2200 to meet the demands of working middle class. This car has been designed keeping in mind the low budget of common people ("Automobiles and Trucks Trends"). Total number of cars and commercial vehicles produced in Japan in 2006 was 11,484,233. The same number was 1,508,358 for Russia, 11,263,986 for USA, 5,819,614 for Germany, 7,188,708 for China and 2,572,292 for Canada ("OICA >> Production Statistics"). The year 2008 will see a rise in the demand for eco-friendly cars especially in USA which is the leading pollution causing nation of the world. The infrastructure for supporting hydrogen car is being developed. Car companies like Toyota and Honda are aiming the hybrid markets. Honda has decided to lease more cars to the individuals to get the feedback for future. Developing countries like India will have economical cars like 'Tata Nano'. China will overtake USA in 2008 in the number of car owners. What company owns what brand The top 20 auto companies of the world are: Toyota, General Motors, Ford, Volkaswagen Group, Honda, PSA, Nissan, Chrysler, Renault, Hyundai, Fiat, Suzuki, Diamler, Mazda, Kia, BMW, Mitsubishi Motors, AVtoVAZ, Subao and Tata Motors ("Automotive industry"). BMW(Bayerishe Motoren Werke) was founded in the year 1916 in Munich, Germany. In 1928 BMW acquired Eisenach vehicle factory and launched its first motorcar. The first car was an Austin Seven built under license("Welcome to BMW Company Facts"). BMW is also the world's largest manufacturer of luxury cars. The brands owned by BMW are BMW, MINI and Rolls-Royce. The BMW sales of units in 2006 were 1,179,317 for BMW, 186,674 for MINI and 847 for Rolls-Royce. Its biggest buyers are European Union with 37% and United States with 22.8% share ("Welcome to BMW Company Facts"). General Motors Corporation was founded in 1908 and is the world's largest automaker for last 76 years. In 2006, GM cars were sold globally under brands Buick, Cadillac, Chevrolet, Opel and others. Around 9.1 million cars were sold in year 2006 ("About GM Company Information: Corporate Information: GM General Motors"). Chrysler was founded in 1925 by Walet P. Chrysler. Chrysler in 1960 started a model of uni body among cars that is the most significant feature of current cars as this allows more security and became one of three leading companies in 1960's in United States. In 1998 Chrysler was overtaken by Diamler and named as Diamler Chrysler Corporation. It's 80.1% stocks were again sold by Diamler to Cerberus Capital Management. Chrysler group is now individual under name Chrysler Motors LLC. Chrysler owns Chrysler, Dodge and Jeep. Under Diamler Chrysler it owned brands like Maybach, Mercedes-Benz, and Smart ("Chrysler"). Toyota is world renowned for its cars. Toyota was founded in 1933 as a division of Toyoda Automatic Loom Works. Toyota Motor Company became independent unit in 1937. Toyota Motor Sales Co., was established in 1950. "In 1982, the Toyota Motor Company and Toyota Motor Sales merged into one company, the Toyota Motor Corporation. Two years later, Toyota entered into a joint venture with GM called NUMMI, the New United Motor Manufacturing ...". Toyota owns: majority stakes in Daihatsu , Fuji Heavy Industries(8.7%), Subaru, Isuzu (5.9%), Lexus, Scion, and Toyota. ("Toyota"). What is the role of cars on global warming Global warming refers to an increase in the average temperature of earth as a result of the accumulation of the greenhouse gases (such as carbon dioxide, water vapor, ozone, methane and nitrous oxide) in the atmosphere. Out of these six gases, carbon dioxide is the major cause of global warming; produced primarily by the burning of fossil fuels such as diesel, petroleum and natural gas. Cars and other automobiles have internal combustion engines that emit hot gases due to the burning of the fuel. These gases get accumulated and trap the sun rays in the atmosphere leading to increased heat on the earth. Global warming can be devastating for the earth. It can turn fertile lands into deserts. An increase in the temperature will lead to the melting of glaciers resulting in a rise of water level in the sea. There are numerous islands and low lying areas that will submerge in water. Many areas will suffer droughts; others will suffer heavy floods, hurricanes and storms leading to mass destruction of life. Burning of 1 liter of petrol releases around 2.8 kilograms of carbon dioxide into the atmosphere, in addition to other toxic gases like nitrogen oxide, carbon monoxide. However diesels emit about 2.8kg, and LPG cars emit 1.5kg of the same ("Motor Vehicle Emissions - Environment Division - Department of Tourism, Arts and the Environment"). America's transportation sector produces 48% (i.e. around 333 million tones of CO2 in a year) of the world's total CO2 emissions by the automobiles ("Time to Cut Pollution From America's Autos - Global Warming - Environmental Defense"). Different preventive measures must be taken to stop global warming. One option is the use of renewable bio fuel i.e. fuel from vegetable oils and food crops. Use of bio fuels reduces the amount of carbon dioxide emissions as compared to fossil fuels. Another option is the reduced traveling; a liter of petrol saved will save 3kg of carbon dioxide. Instead of using a car, use of public transport and walking for short distances will also save fuel. Electric, hydrogen and hybrid cars should be opted which generate less pollution. What are eco-friendly cars Cars that produce minimal amount of carbon dioxide are categorized as eco-friendly cars. Such cars use hydrogen, bio fuel or electricity for power. These cars are also quieter than petrol or gasoline ones. Hydrogen, electric and hybrid cars are eco-friendly cars. The advantages of hydrogen make it an attractive option. The only by-product of this technology is the water vapor and zero CO2 emissions. Hydrogen can be produced from renewable sources of energy like water, sunlight and biological waste. Arab countries dominate the fuel production, due to which other countries have to pay high prices and depend on them for fuel. Hydrogen will make many countries independent. Hydrogen is more efficient than conventional fuels; greater distances can be covered for same amount of fuel (Swain, "The Advantages of Hydrogen Fuel Cell Cars"). There are certain limitations of the hydrogen cars. Hydrogen fuel cells are costly than internal combustion engines. Cells take time to startup in the low temperature conditions. The cells have a low service life than conventional systems. Hydrogen is difficult to store and transport. It is also expensive to produce hydrogen in a form to be used as a fuel ("Hydrogen vehicle"). Hybrid electric cars comprise an internal combustion engine and electric motor power-driven by a rechargeable battery. Smaller engine along with a high torque and powerful battery is used. When high speeds are desirable, both gasoline and electric motor are used to drive the car. For normal speeds only gasoline engine is used which also powers the batteries for later use. Such a combination makes the car more fuel efficient and economical, cutting down the emissions to a considerable level ("Hybrid Center :: How Hybrid Cars work :: under the hood"). Hybrids tend to cover up the limitations of vehicles based on only electric battery or internal combustion engine. There is less use of fuel, leading to reduced emissions of carbon dioxide. There is no need of recharging the battery as it gets charged by the gasoline itself during regenerative braking. There are some negatives of the hybrid cars also such as the limited battery life and cost of battery change. Due to light weight there are some security issues in the practical designs too ("Hybrid Car Pro and Cons"). Many companies are set to hit the roads with their designs of the fuel efficient hydrogen and hybrid cars. Honda will lease about 100 hydrogen cars in US in 2008. At present there are only 20 fuel cell cars on US roads being used by fleet service and only 2 by individuals on lease. Other companies are also preparing to introduce their versions of the eco-friendly cars in the coming years like Phoenix Motorcars' electric sport utility truck, Toyota's plug-in HV, Honda FCX Clarity fuel cell car, General motors' Chevy Equinox fuel cell and all. The companies aim at leasing than selling to get the feedback ("Top 5 Green Cars that Envison the Road Ahead | Green Car .com"). The Toyota Prius and the Honda Insight are the two best-selling hybrid cars in North America. Toyota has sold about 120,000 Priuses since it was introduced three years ago and about 2,000 Insights are sold every month ("More eco-friendly cars in near future"). At present times, eco-friendly cars are very expensive to afford. Companies are introducing new technologies to make the cars cheaper. Companies like Honda have leased their innovations to get the feedback. Success of these cars depends on the availability of the resources supporting their operation like hydrogen fuel stations, powerful batteries and their affordability to the common man. What are the pros and cons of leasing a car A leased car is available for use for a limited lease term, the car is not owned by the user. A monthly lease amount has to be paid to the original owner of the car. As more and more fuel efficient technologies are being developed, cars are getting expensive to buy. There is a wide range of people who prefer leasing a car than buying one. Leasing has several advantages. Users can drive a new car every two or three years as the lease term is over, which will be too costly if one has to buy a new car every time and also manage to get rid of the old one for a good price. Monthly payments for leasing are much less than the loan payments for buying. No or very minimal down payment is required. There is no need to worry about the maintenance and expensive repairs as manufacturer's warranty covers all. Sales tax paid for a leased vehicle is also very less. Shortcomings of leasing are also numerous. Lease term cannot be terminated earlier than agreed upon. If done so, an extra fee along with the remaining charges has to be paid to the owner. Lease puts a limit on the miles one can drive. Extra charges have to be paid if miles limit is crossed at the end of lease. A leased car cannot be personalized according to the choice. Leased cars should be treated well and returned in a good condition, every scratch has to be paid for. Although loan payments for owning a car are huge, after few years one can relax about the payments but in case of leasing one has to always pay ("Car Leasing Not Right For Everyone. Should I Lease, or Not"). Leasing like everything else in life has its own advantages and disadvantages. It is our own personal choice to utilize it or not. What are the benefits and limitations of owning a car Car is an absolute necessity these days. Buying or owning a car has several benefits. A large payment is required for buying a new car but after some time there is no need to worry about the payments once the loan is over and car is owned. There is no agreement or bond of any type. There is no limitation about the usage of the vehicle. No need to worry about the miles one can drive. Own car be customized as desired. It may be repainted in any color. Any modifications or additions can be done without any interference or botheration. No concern of wear and tear of the car. Old car can be sold anytime without any hassle (Pareto, "Pros And Cons of Leasing Vs Buying A Vehicle"). As the value of a new vehicle depreciates heavily in the first year, it ends up being very expensive on the pocket. However if we keep the car in a good condition, then after few years we can still sell it for a reasonable price and recover a part of the value spent (Foreman, "Leasing versus Buying a Car"). The major limitation of buying a new car is the huge down payment and monthly payments afterwards. Buyers may have to opt for financing the car, which results in much higher payments than the actual cost of the car (Pareto). Selling of the old car is also a headache. One cannot enjoy different and expensive cars after short terms like a year or two. In order to get the benefits of owning a car you must own the car for a pretty long time. Decision about buying a car should made taking into account all the factors. What are the pros and cons of buying a new/used car Feeling of getting behind the wheels of a brand new car, having the hottest features, a new number plate and equipped with latest security trends is incomparable. However there are lot of factors that deserve a mention while deciding whether a new or a used car is more attractive. Pros of buying a new car are: A new car is covered with warranty and all the repair costs are covered. Buying a new car is definitely risk free as compared to the used one. Interests on loans for new cars are lower. New cars come with the latest security features and the trendiest colors and designs. It is always easier to find buyers for reselling a new car. Buying a new car offers a wide range of choices and alluring discount schemes. There are several cons of buying a new car. New cars are very expensive to buy. If certain features are to be installed cost shoots up immensely. Loan term on a new car is longer than the used ones. A new car faces huge depreciation during the initial years. Some cars loose 50-75% of their original value after few years of hitting the roads. Used cars can save a lot of money when selected smartly. They can offer a number of advantages as: Used cars are considerably cheaper. Buying a used car saves a lot of money. Less payment goes for the insurance and tax for a used car. Used cars are reliable enough when maintained properly. A used vehicle with installed features can be much cheaper than a new car with same equipment. The drawbacks of buying a used car cannot be neglected either. Choice is limited when buying a used car. Risk is involved while buying an old car as there is no information about the inner state of the car. For used cars repair costs are on your pocket, especially if the car is subjected to wear and tear and proper care is not taken by the earlier owner. Many parts may have to be replaced soon after buying a used car. Used cars can lack in the latest security features available in the new models of the same car. ("Pros and Cons of Buying a Used Car"). Considering all the pros and cons a smart choice must be made for buying a car as it is a valuable asset. What are the effects of cars on the society Cars have evolved from status symbols to absolute necessities. They are the basic mode of transport in the developed countries and the developing countries are catching up with the pace. Cars have made our lives comfortable and convenient. Every step is being taken to facilitate the travel by cars. More structured road and parking network is being developed by the countries. Laws are created and modified to support the growing transport culture. A lot of time is saved while traveling. Many industries were born after the automobile revolution. As the need of the cars grows up, the production of other materials that are use to manufacture and support them has also shoot up like petrol, gas, steel. The adverse effects of the vehicles are of utmost worry. The depletion of the fossil fuels like petrol, coal and the air pollution caused by the emission of harmful gases is a source of concern. The harmful effects of cars are gaining attention of the environmentalists around the world. The burning of fossil fuels in the cars leads to the emission of harmful gases like carbon dioxide, nitrous oxide and methane which cause greenhouse effect. The average temperature of earth is increasing due to the greenhouse effect which will lead to mass destruction of life on earth due to natural disasters like floods, droughts, storms, hurricanes and all. People prefer cars for even short distances. Nobody prefers walking any longer. This has become a serious health hazard. While walking a person meets several persons on the way and socializes. Due to mobility in cars every time ,people do not know and interact with their neighbors any longer. Car accidents are the major cause of deaths and injuries at present times. Pedestrians have to be alert always to protect themselves from a speeding car. Cars with all their negative and positive aspects have become an integral part of our lives. It is difficult to imagine transportation without cars ("Effects of the automobile on societies"). Works Cited About GM Company Information: Corporate Information: GM General Motors. General Motors Corporation. 9 Feb 2008 . Automobiles and Trucks Trends. Plunkett Research, Ltd. 9 Feb 2008 . Automotive industry. Wikipedia, The Free Encyclopedia. 9 Feb 2008. Wikimedia Foundation, Inc. 9 Feb 2008 . Car Leasing Not Right For Everyone. Should I Lease, or Not. 9 Feb 2008. . Chrysler. Wikipedia, The Free Encyclopedia. 8 Feb 2008. Wikimedia Foundation, Inc. 9 Feb 2008 . Effects of the automobile on societies. Wikipedia, The Free Encyclopedia. 6 Feb 2008. Wikimedia Foundation, Inc. 9 Feb 2008 . Foreman, G. Leasing versus Buying a Car. Campus Crusade for Christ. 9 Feb 2008 . Hybrid Car Pro and Cons. All Hybrid Cars. 9 Feb 2008 . Hybrid Center :: How Hybrid Cars work :: under the hood. The Union of Concerned Scientists. 9 Feb 2008 . Hydrogen vehicle. Wikipedia, The Free Encyclopedia. 7 Feb 2008. Wikimedia Foundation, Inc. 9 Feb 2008 . More eco-friendly cars in near future. CBC/Radio-Canada. 9 Jan 2003. 9 Feb 2008. . Motor Vehicle Emissions - Environment Division - Department of Tourism, Arts and the Environment. Department of Tourism, Arts and the Environment. 9 Feb 2008 . OICA >> Production Statistics. Organisation Internationale des Constructeurs d'Automobiles. 9 Feb 2008 . Pareto, C. Pros And Cons of Leasing Vs Buying A Vehicle. Investopedia ULC. 9 Feb 2008 . Pros and Cons of Buying a Used Car. Consumers Union of U.S., Inc. 9 Feb 2008 . Swain, D. The Advantages of Hydrogen Fuel Cell Cars. May 21, 2007. 9 Feb 2008 . Time to Cut Pollution From America's Autos - Global Warming - Environmental Defense. Environmental Defense. 9 Feb 2008. . Top 5 Green Cars that Envison the Road Ahead | Green Car .com. DEMAND MEDIA, INC. 9 Feb 2008. . Toyota. Wikipedia, The Free Encyclopedia. 8 Feb 2008. Wikimedia Foundation, Inc. 9 Feb 2008 . Welcome to BMW Company Facts. BMW (UK) Limited. 9 Feb 2008 . Welcome to BMW Company Facts. BMW (UK) Limited. 9 Feb 2008 . Read More