Ford and G.M. Lose Grounds to Imports Essay Example | Topics and Well Written Essays - 500 words

Ford and G.M. Lose Grounds to Imports - Essay Example companies, which has resulted in dwindling of the market share of the â€Å"Big Three†, with particular emphasis on the car segment of the auto industry, and forcing the â€Å"Big Three† to respond in an attempt to hold on to the large market share. In spite of such efforts the Japanese auto manufacturer Toyota in October 2004 forged its way into the top three largest auto sellers in the United States of America, displacing Chrysler from this prestigious position. This event has led to the speculation that the structure of the U.S. auto industry is likely to see a change, wherein Japanese auto manufacturers are likely to rub shoulders with the traditional â€Å"Big Three† manufacturers of General Motors, Ford, and Chrysler. (1). The Japanese auto manufacturers have started edging towards and past the three big American auto manufacturers in terms of market share. There are two possible key factors involved in the pull of the American customer towards Japanese auto products. The first is the Japanese auto products are more economical than the American products, which is related to the strategies employed by the Japanese in boosting the productivity of their employees and cutting manufacturing costs. In the current scenario of job insecurity, investment in the purchase of a new vehicle is bound to be conditioned by the worsening economic scenario. The second possible factor is related to the rising costs of petroleum products. Japanese cars are less of gasoline guzzlers in comparison to the American cars, and with rising fuel prices and unstable incomes the Japanese auto products are more attractive to the American customers. This is reflected in the continuing rise in the sales of Japanese auto products in s pite of the response of incentives by the American auto manufacturers. (1). Put in a nutshell, we may take the game theory as an attempt to explain the strategic actions in a competitive environment and the gains and losses that could emanate from these actions