The Automobile Industry in the USA - Essay Example

The present low cost of oil will not be permanent and the public is poised to demand more environmentally friendly automobiles. Electric cars and lithium-ion batteries will be a major contributor to this demand. This will create a new market as people are given an incentive to trade up to the newest technology available. However, among the bright spots in the industry are some substantial warning signs. A large number of employees have made employee safety an issue and could be a significant added labor expense in the coming years, which will severely limit profitability.

In addition, product safety groups will continue to lobby for safer vehicles that could add additional costs to manufacturing. Finally, the economic health of the Big Three is an unknown factor and will remain so until the US Congress acts and the automakers make concrete plans for their future viability. The industry must be prepared to offer a vehicle that the consumer wants to purchase. This is a considerable obstacle and any action regarding investments must consider this major drawback.