Custom «Why Many Americans Prefer Foreign-Built Cars» Essay Paper Sample

Introduction

The automotive industry has become highly competitive over the years. During recent years, automakers have invested a great deal in the industry with the increasing demand for cars. In America, the automotive companies are facing competition from multiple foreign companies. These American companies include Cadillac and Ford car manufacturers. However, the companies like Honda, Volkswagen, and Toyota seem to be increasingly flooding the American market, and it seems that Americans give their preference to the foreign-built cars. Recently, foreign automakers have increasingly invested in assembling their cars in America. As a result, the profits of the American companies have fallen and consequently reduced their job opportunities in the country. However, the profits and job opportunities of the foreign companies have barely hit the half of the prior profits of the local automobile industry. This paper will compare the demand for the internationally and locally built cars in America. Additionally, the paper will discuss the causes and effects of the rising demand for the foreign-built cars in America.

Causes

The changes in the American automotive industry have been caused by a drastic increase in the number of investors entering the market. New world famous foreign companies have been in the market over the last fifteen years.  Different Japanese and Chinese companies are operating as the assembling centers on the American ground today. The new overseas companies are attracted by the increasing demand for the foreign cars in America. The US cars do not offer diverse features as the foreign assemblages, hence, posing competition. As a result, the American companies are facing financial challenges. For example, recent report has stated that Detroit is operating on a billion dollars loan from the government (Quispel 236). Therefore, the local companies are straining to offer the best products to their clients.

Additionally, the local companies have dominantly relied on the old features of vehicles. The new foreign manufactories are implanting innovations into their cars. The new models have attractive features that Americans are willing to try. Similar to any other business, the local companies need to fund the market and diversify their product range. However, without sufficient funding, the company becomes less dominant and since automotive industry is not monopolistic, other competitors with funds get an advantage over the weak businesses. The locally made vehicles in America include Ford, Chrysler, and Cadillac. The companies sought billions from the government to survive in the market in 2000 (Hayford 37). Domestic cars have existed for quite a long time, nevertheless they have not made any vivid quality changes or advancement..

Moreover, the American government has shifted its interest fromfunding the automotive companies to inviting the foreign experts. After the automotive industry funding in 2000, the expected returns by the government have not been accrued yet. . Recently, President Obama has invited more foreign investors to the country, making it easier to trade and operate in the country. As a result, the revenue from the Detroit’s market has increased by more than 55 percent since 2010 (Hayford 37). Therefore, the government’s support has influenced the increasing demand for the foreign-built cars in the market.

The factors discussed above are the major causes to the increase in demand of the foreign-built cars in America. The increase in the demand has different effects on the economy, the local industry, and international trade of the country. Therefore, a discussion on the effects of raised demand will help in understanding the industry changes better.

Effects

The factors that have increased the demand for foreign-built cars have triggered a drastic change in the American economy. The effects experienced are either positive or adverse. For example, there is an increase in the automobile import meaning the raise of government’s revenue.. Moreover, the fall of the local companies has led to the job losses among Americans. However, with the entry of new manufactories, more job opportunities have been created in the country. The effects on the automobile industry in America have led to an increase in the exposure of the emerging and trending issues in the industry from other companies. Additionally, the trade agreements between America and other countries have created better international relationships (Lugar 16). For example, the trade agreements between China and the USA have opened floodgates to better trading relationships between these countries. The same effect has been experienced with Japan and Germany.

Conclusion

In conclusion, the causes for the raise in demand of the foreign-built cars include a broad range of advantages namely variety, affordability, and high quality of foreign cars. The foreign-built companies offer a range of different models for their customers, unlike the American ones. The foreign-built vehicles have proved to be more reliable in a long time service with fewer repairs compared to the American models. Additionally, the wide range of variety has different prices making it convenient to buy a car. As a result, the demand for the locally made cars has led to the decline and the American's preference has shifted to the foreign-built cars. The trend has caused a comparative decline on the profits and growth of the American automotive industry. The effects have been extended to the economic growth and development of the country.