scooters chicago
Automotive
INTRODUCTION:
The automotive industry worldwide industry that involves itself in the manufacture of motorcycles, trucks, vans, buses and coaches. There are many companies involved in this sector, including BMW, General Motors among others.
In this section I will look at the motorcycle section of the automotive industry.
Motorcycle industry is experiencing worldwide growth in production, sales, but profit margins for the past four years. Almost all industry players, including Harley Davidson, Honda, Kawasaki, Suzuki and also recorded from mild to remarkable sales in this period.
Shifts and price elasticity of supply and demand
Consumers react to a price change is measure the product of price elasticity of demand. Some products are highly sensitive to price changes, while others are not. In some Modest commodity price changes cause large changes in the quantity purchased, economists say that demand for such products as relatively inflexible or simply elastic. For other products, significant price changes cause only small changes in the quantity purchased, demand for these products is relatively inelastic, or simply hard.
According to the manufacturing industry products is relatively inelastic, which is due to the fact that many products in this sector are luxury goods. Products have some sort of 'snob appeal' and that's why, even though the prices of products have been steadily growing demand also increased relatively. The last survey of the U.S. market showed a statistical trend as below.
U.S. market share is as follows:
Harley-Davidson 34.8%
Honda 23.7%
Suzuki 14.6%
Kawasaki 13.6%
Yamaha 10.0%
BMW 2.3%
Ducati 0.9%
Moto Guzzi 0.1%
The pie chart below represents this information.
To increase the market share of each company uses its own strategy. But in any industry, there are four basic elements of the marketing strategy. These four elements are strategies that include product, price, promotion and distribution. All businesses within the sector seems use a different mix of the four elements to achieve its growth and industry projections.
Positive and negative externalities:
Externalities are costs or benefits of CA borne from economic transactions with entities that are not directly involved the transaction. In the motorcycle industry some positive externalities are increasing in technological progress not only in industry but also in other industries. Inventions through increased technology has become readily available, and it has resulted in cheaper products.
In addition, there was a notable reduction in transport costs, particularly in China and India, where increased use of motorcycles and scooters in the transport sector decreased traffic congestion as well as a reduction in public expenditure transport.
In the same context, an increase of negative externalities, including smoke pollution, noise and pollution water as a result of industrial waste, among others. Due to increased pollution, the American Motor Association (AMA), announced review the Environmental Protection Agency a letter of instruction "to the question of motorcycle-emissions rules were finalized.
AMA sought clarification of EPA regulations for "kit" and "custom" motorcycles in operation in the country. According to regulations, a person will be allowed only one kit motorcycle during his life, which will be exempt from meeting EPA emission requirements. For custom motorcycles manufacturers able to create and sell up to 24 rounds per year, which do not meet EPA emission requirements. In addition to these bikes will be specially marked as being are exempt, and these bikes will show rounds, which are seldom ridden.
Wage inequality:
Equally As in many other sectors of the motorcycle industry is confronted with the problem of wage inequality. This inequality has three dimensions. The first dimension includes different wages for workers in the same factory as some company executives may be paid more than engineers in the same company.
A recent example of this was in the Harley-Davidson company, which earlier this year went to two workers week strike demanding an increase in their wages, and in particular the Commission's fair share of the profit margin. On February 2, 2007, after their collective bargaining agreement, about 2700 employees AT-Davidson Inc. 's largest Harley factory in York, PA went on strike after failing to agree on wages and health benefits. [1] During the strike, the company refused to pay in any part of the striking employees' health care. [2]
Second Dimension covers workers are paid less or more, depending on the location of the factory. In this case, due to cheaper labor in third world countries and China, many companies have relocated their factories to the economy so that they will ultimately pay less to their workers. This has led many workers, particularly in Latin America go on strike, demanding the same regular pay equivalent to their workers based in Europe and America.
third dimension includes different wages depending the industry. In this regard, you may find that some industries, such as the motorcycle industry could end up paying less of their employees compared to other sectors such as banking.
Monetary and fiscal Policy:
In order to support the many governments have adopted various monetary and fiscal policy. No single policy that was adopted by the sector wise. To improve the South Korean government urged chaebols' specialize its operations to more efficient. In addition, the government ensured that there is low interest rates to help get chaebols' loans inexpensively. In other economies such as Vietnam, fiscal policy is deficit financing for the industrial sector in order to keep prospering economy.
In general, the development of this sector is necessary to have an expansionary monetary policy regime, which should be more compounded by a restrictive fiscal policy regardless of the geographical location of a particular company.
CONCLUSION:
The automotive industry is the value added in each sector of the economy. This means that the industry is very important for growth economy. Therefore, its economic importance lies both in its scale and complexity of its direct and indirect in other mutual sectors of the economy. Country's economy and the global village is the ultimate importance for the growth of this industry.
From Industry produces non-essential goods (luxury goods), it is important that the disposable income generated from productive work in other sectors, is sufficient to allow the public to purchase goods from this sector. In addition to the population and their purchasing power is important for industrial development. Correlation of the industry, such as in other sectors of industry to supply raw materials or finished buying products from the company goes a long way in supporting industry.
Economic influences that may affect the industry in a negative way:
There are many economic situations, which may adversely affect the industry. These scenarios may come from local Where is the holding company is or may result from the global market. The local economy, increasing taxes on exports, increases in interest rates and changes in the political arena, an unprecedented appreciation or depreciation of local currency can be all confined to the negative. In addition to the global depression of world economy, can prevent a negative impact on industrial development.
Reference:
Mankiw, NG (2004), Principles of Economics (3rd ed.), Chicago, ILLIOIS: Thomson South-Western
Philip Hardwick (1982), Introduction to Modern Economics, Longman, UK
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