Cars Industry in Germany - Literature review Example

Task: Cars Industry in Germany German Strength Shows as euro zone crisis looms over Frankfurt motor Show: September Ruddick reports that despite the uncertainties looming over the manufacturing section of the German fiscal system, Frankfurt claims home to the principal European banker, ECB. The predicted fiscal difficulties could damage the industry well known over the years as the principal contributor to the German system. According to Ruddick by 2008 the signs of fiscal difficulty began to grip the Germanys auto industry. Germany Auto is reportedly the largest industrial exporter. However, at as the global recession began to infringe in various sectors of the global economy, the auto industry in Germany experienced a steady decline in exports. Furthermore, the high fuel prices across major markets like the U.S significantly reduced the export volumes. Moreover, Ruddick reports that numerous customers are increasingly cancelling orders following uncertainties over employment in the phase of the persistent global fiscal predicament. Ruddick observes that the GM owned Opel was among the first firms to close their factories as they sort to adjust to the global car sales. According to Ruddick, GM had already begun to allay fears over its operations. This was in reaction to its witnessed persistent poor performance over past years. Similarly, world class brands like BMW began to feel the downturn as it spread across the world. Consequently, Ruddick reports that by 2008, the cost of operating a car had increased by over 25% from the year 2000.This was comparative to the appreciation limits in automobile prices which had accumulated with a dismal 15%. This implied that cars were cheaper as compared to the present economic costs. Overall, the fiscal issue reminded numerous users and researchers that there was need for an economy car. Despite the crisis, numerous industries secured affordable fiscal assistance from authorities which vitally saved them from the brink of collapse. According to Ruddick, the Germany car makers learnt significant skills. However, industries in the U.S faced extreme difficulty and despite federal assistance, some still ended up filling for bankruptcy German Youth Snubbing the car industry; October 2011 Reuters reports that emerging trend shows a decline in the car sales a cross certain sections of the German population and in particular the youth. Reportedly, the youths are increasingly snubbing the products from the iconic German industry at a time of predicted volatility amid the global economy. However, Reuters questions the rationale behind this untraditional character and suggests the persistent fiscal difficulties as probable causative. Reuters reports that despite the presently appreciating market within and around the globe, many individual are continuously driving less. Reuters reports that despite this research carried out by renowned professionals showed that the German Youth presently drove less as compared to the earlier years. The home market continues to critical support the automobile sector. Reportedly, this report has raised concern about the issue given the persistent market augmentation and advancements adopted in Germany. Daimler to Axe Luxury Car Subsidiary Maybach: November 2011 News business reports that following strings of poor performances by the German car giant, it had decided to close down the branch with dealt with luxurious cars. This follows attempts to make the subsidiary perform in line with the rivals like Bentley and Rolls Royce. According to news business, the Germany automobile companies had started resuscitating from the economic downturn. News business attributes these results to critical factors. Despite the successful penetration of the Chinese market by the German cars, a few manufacturers found it had to hold on to some of their luxurious brands. News business reports that novel and even better luxurious models from their alternative models like Mercedes Benz will replace the iconic model. This follows the corporations declaration of an inability to engineer dissimilar model to the iconic model. However, a look into the motivations which led to the reestablishment of the once famous model reveals that the model reemergence to the market was ill advised by the acquisition of other iconic models by their strict competitor such as BMW. According to the analysis by the business news, BMS reacquired the Rolls Royce while and VA negotiated the acquisition of the Bentley. Evidently, this forced the executives to re think their stand in luxurious car manufacturing leading to the historic reacquisition. News business highlights that at the point of its acquisition, the leaders envisioned a yearly sale of close to 100 cars at a staggering prices of slightly over 300000 Euros. However, over the years, this grand plan failed and the annual sales hardly surpassed 100 cars. The leaders blame this on the past events including changing trend in the motor vehicle industries as well as the fiscal recession. According to the news business, the European commission imposed fresh emission policy that requisite industries within the European Union to cut down the emission of carbon dioxide to 130 grams per kilometer by 2012.This announcements faced protests from numerous leaders within the German nation. By the time, The news business indicate that the gigantic car industry within Germany released about 200 grams of carbon dioxide to the ecological set up. Reportedly, Germany was notorious for emission of CO2 especially the luxurious models. Reportedly, Germanys car industry is the chief employer a mid the manufacturing industries within the German nation. Additionally, Germany for decades had won the reputation as a leader in regards to ecological conservation, (news business). These factors necessitated the ensuing uproar upon the announcements by the European commission. Furthermore, for periods, Germany engaged in production of specially customized cars and largely ignored mass productions. However, attempts to raise such investments through mergers with companies like Englands rover group failed decisively, (news business). News business observes that a part from the CO2 drawback, the Germanys car industry was not well prepared for the future. Observably, they persist to dominate the markets owing to their sophistication but clients taste is steadily changing. News business reports that numerous users are increasingly becoming environmentally conscious. Such were the similar woes suffered by the American car makers who for long periods emphasized production of vehicles with poor fuel efficiency. News business observes that car makers in Germany are increasingly making extremely fast cars and employ sophisticated technologies that over the years have raised costs. However, this innovativeness has failed to explore a novel era of fuel efficient and ecologically friendly automobiles. According to news business, over the past decades, the Germany industrial leaders like VW attempted to make fuel efficient economy automobiles but failed. The huge market in Germany and its surroundings preferred the high speed and sophisticated machines typical of German engineering. BNW attempts were equally meager. News business reports that in reaction to the events crippling the auto industry in the west, they engineered the X5 to produce the X3 which was smaller and more fuel efficient. Euro Crisis has slowed pace of Fiats investment: December 2011 Fiats investments slowed down considerably despite the improving euro market conditions. Marchione observes that despite the evident improvements, the industry suffered and especially Fiats investment plans across Europe and in Germany in particular. However, the German auto market is steadily expanding to the Asian continent. Marchione reckons that this trend will obviously alter the overreliance of the manufacturers on the key European and American marketplace. Reportedly, the new eastern markets had a high affinity for German cars. Secondly, the onset of the year marked a steady decline in the Euro an event which devalued the German cars making them cheap in China and other sectors of the globe. These new found markets and low cots were significant in the rebirth of the economy. AP reports that by 2010, numerous companies were presently working near full load capacity. Works cited Marchione. "Euro Crisis has slowed pace of Fiats investment." Automotive News Europe. Automotive news, 6th December 2011. Web. 6th December 2011. News Business. " Daimler to Axe Luxury Car Subsidiary Maybach."News business. BBC, 28th November, 2011. Web. 6th December 2011. Reuters. " Germans Youth Snubbing car Industry. " The Vancouver Sun. Post media News, 26th October, 2011. Web. 6th December 2011. Ruddick, Graham. "German strength shows as euro zone crisis looms over Frankfurt moto show." The daily Telegraph. The daily telegraph, 14th September 2011. Web. 6th December 2011. Read More