Ten years is a very long time, and technology can advance by leaps and bounds in just a decade’s time. A prime example of the way an industry can be altered in just ten year’s time is the past decade of changes in the automobile industry. The economics of the industry have changed, as have the cars themselves. Here are some of the biggest changes that the automobile industry has had to face over the past decade.
For decades, the automotive industry was part of America’s manufacturing backbone. But with the financial woes of car companies, particularly during 2008-2010, the government had to step in and provide financial assistance. Funds from the Emergency Economic Stabilization Act of 2008 were used to provide $17.4 billion in loans to GM and Chrysler, and additional TARP funds were also provided.
The bailouts also contributed to the restructuring of the industry, with GM declaring Chapter 11 bankruptcy and cutting ties with many of its dealerships. On the hook for such large loans, the companies will need to pay regularly or else go into default with the government. This will give them an incentive in the coming years to make smart business decisions.
The Motor City is no longer the epicenter of the automotive industry. Cars and automotive components are being made in South Africa, China, and other far-flung cases. And as cars are in high demand in impoverished and developing nations, new automakers are finding ways to create cars that sell for far less than the ones made in America or Japan.
For example, the Indian-made Tata Nano retails for around $2,600, and has generated so much buzz that the company plans to release a “souped-up” version for the European and American markets.
And while Chinese goods have a taint on them in the minds of many US consumers (due to recalls of pet food and child’s toys in the past decade), Chinese automakers are poised to make a splash when the offer their cars for sale in the US. Chinese brands to watch in the coming decade will include Brilliance China Automotive and Chery Automotive.
With rising gas prices, many American consumers are making the change from gas-powered automobiles to hybrids. More electric-only cars also hit the market in the last decade, but with inadequate recharging station infrastructure outside of major metropolitan areas, most consumers preferred hybrids to electric-only cars.
Issues of cost aside, the hybrid also rose to prominence over the last decade because of a growing “green” movement. Those wanting to make a difference in the environment can lower their carbon footprint by opting for a hybrid car instead of a traditional combustion engine.
Computer chips in automobiles have been around for longer than a decade, but what is new in the last ten years are features like GPS, the proliferation of On-Star, TVs, voice command, and options to sync your mp3 player with your car. Consumers have never had such a variety of tech options with which to customize their cars, letting each new car owner feel like the car is tailored to their individual lives.
It may seem like a small change, but the last decade has given consumers a great way to personalize their cars: an increase in the number of available paint colors. While black and silver will always be classic choices, consumers are also attracted to colors like “Lime Squeeze” found on the Ford Fiesta or “Yellow Blaze” found on the new Focus.