2.2 World Car

 

The automobile industry at the end of Chapter 2 details the effects of globalization on car companies and their reactions to it. American car companies have difficulty sustaining their business in a global economy. One solution to appealing to different markets is to come up with a car that can appeal to all markets with little to no modification. However, the wide varying preferences by different cultures make such a car a near impossibility. Meanwhile, everything in the car industry has changed. Cars and their parts are manufactured in many countries regardless of where the company is located and the internet has even allowed for people to purchase cars from other countries rather than local markets.

Globalization 3.0 is fueling change in the auto industry by forcing companies to rethink the way they manufacture, sell, and design cars. Because of global specializations, cheaper labor, and tax laws, companies offshore much of the manufacturing of a car. The international market has created a demand for cars that fit their lives. Unfortunately, this leaves the car industry without a standardized product to offer the world, creating inefficiencies. The global marketplace created by the internet has also altered the way the auto industry sells cars to international and local markets alike.

Although Globalization 3.0 has marked an open market place, cultural distinctions can make catering to different demographics difficult. For example, cities with smaller streets of some cultures are unable to handle the large cars that another culture may prefer. In addition, some cultures with less personal space may feel lost in a larger car. Because of this, car companies must make cars that are fundamentally different from one another if they want to appeal to every market.