The hottest real problem facing the American autom

2022-08-09
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The real problem facing the U.S. auto industry

the U.S. auto sales are close to the highest level in history, but the U.S. auto industry is in great turmoil

automakers are facing an unsustainable situation: they have too many factories that produce cars Americans no longer need. This is why General Motors (GM) closed four U.S. factories while Ford (f) is undergoing major restructuring

the production capacity of American automobile factories exceeds 3million, but compared with ordinary cars, SUVs and trucks sell well

One of the main reasons for overcapacity after the auto factory construction carnival is that foreign automakers have built large-scale new auto factories in the United States for 30 years

foreign automakers operate 19 auto assembly plants in the United States, and this number continues to grow. Volvo opened a factory earlier this year. Toyota and Mazda are jointly building a new plant in Alabama. BMW is expanding its plant in South Carolina, which is already the largest in the world, and BMW is also considering adding an engine plant in the United States

these factories have reduced the transportation costs and delivery time of foreign automakers to American customers. They also lowered the exchange rate at 500 DEG; Risk of fluctuation after 50 hours of oxidation under C. In the past 30 years, they have helped foreign automakers double their share of the U.S. market - more than half of the cars sold in the United States are now made by foreign automakers

the market share growth of these foreign brands is at the expense of American automakers. In 1988, Toyota opened a factory in Kentucky, which ushered in a boom period. At that time, General Motors (GM), Ford (Ford) and Chrysler (Chrysler) controlled 74% of the US market. Today, these three companies account for only 44% of the market

half of GM's 12 assembly lines have less than 80% capacity, which is usually the breakeven point of factory profitability

"every factory has some idle capacity," said Christine, vice president of industry, labor and economics at the automotive research center. "The largest one is general motors."

su has suddenly become popular in recent years

changes in consumer tastes have also led to oversupply

the preference of car buyers has relatively suddenly shifted from traditional cars to sports utility vehicles (SUVs) and trucks, making the capacity of some automobile manufacturers far exceed the ability to meet demand. Some sport utility vehicle (SUV) factories are actually facing the situation of tight production capacity through special manufacturing processes

some automobile factories have changed from cars to SUVs or trucks. Ford took a factory that made Ford Focus and used it to make new Ranger pickup trucks. Ford will also cut 1150 jobs in some factories with low utilization, and transfer most of its workers to factories producing SUVs. It is reported that Chrysler plans to close an engine plant in Detroit and restart the production of Cherokee jeeps

but turning factories from cars to trucks is an expensive process. Electric cars and autonomous vehicle still need some time to fill the gap

that's why General Motors plans to close factories while Ford cuts shifts and jobs at one of its few U.S. automakers

car sales fell

from 2010 to 2016, car sales basically increased in a straight line, with sales increasing by more than two-thirds. But Americans don't buy as many cars as before

U.S. car sales fell by 5% last year. As of September this year, the sales volume increased slightly, but even if it barely achieved a small increase this year, it will not be able to return to the record level in 2016

if the economy starts to slow down, these sales may decline further

import factor

another problem is the import of cars to the United States

U.S. President trump and some members of Congress quickly blamed GM's closure of U.S. factories on cars imported from Europe and Asia, as well as U.S. automakers' factories in Mexico

imports are a source of competition for American factories, but not their largest source. Most of the cars sold in the United States are actually made in the United States

foreign automakers produced a total of 5.2 million vehicles in the United States last year. This is about 1million more cars than the Mexican and Canadian factories imported into the United States, almost twice the number of cars imported from Asia to the United States last year. This is more than four times all imports from Europe

most cars from Asia and Europe are model cars, not SUVs. Therefore, as Americans reduce their car purchases, they may reduce some overseas goods imported into the United States

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