discuss how automobiles has been shaped by globalisation through its impact on the economy

Answer 1

Globalization has significantly influenced the automobile industry, shaping it in various ways through its impact on the economy. Here are some key aspects:

1. Increased market access: Globalization has opened up new markets and increased the reach of automobile manufacturers. Companies can now sell their vehicles in various countries, leading to increased sales, profitability, and growth. This has resulted in the expansion of multinational automobile companies, as well as the establishment of production facilities and supply chains in different regions to cater to local demands.

2. Trade liberalization: Global trade agreements and reduced trade barriers have facilitated the exchange of automobiles and automotive parts worldwide. This has resulted in the expansion of international trade in vehicles, components, and raw materials. As a result, automobile manufacturers can source parts and components from different countries to take advantage of cost-efficient production.

3. Outsourcing and offshoring: Globalization has enabled automobile manufacturers to outsource and offshore various operations. By seeking cheaper labor and production costs, these companies can increase their competitiveness and reduce manufacturing expenses. Outsourcing also helps in the formation of global supply chains, where different countries specialize in particular components, leading to more efficient production processes.

4. Technology transfer and innovation: Globalization has increased the flow of technology and knowledge across borders. Collaboration and competition between countries and automobile manufacturers have spurred innovation and technological advancements in the industry. For instance, multinational automobile companies often invest in research and development centers globally to leverage global expertise and gain a competitive edge.

5. Increased competition and consolidation: Globalization has intensified competition in the automobile industry. The accessibility of new markets has attracted both established and emerging players, resulting in a highly competitive marketplace. To survive and thrive, automobile companies have engaged in mergers, acquisitions, and partnerships to strengthen their positions and gain access to new markets.

6. Environmental regulations and standards: Globalization has led to the harmonization of environmental regulations and standards. As countries collaborate and adopt similar emission standards, automobile manufacturers must comply with these requirements to access multiple markets. This has led to the development of cleaner and more fuel-efficient vehicles, driven by global demand and environmental consciousness.

7. Supply chain complexity: Globalization has made the automotive supply chain more complex and interconnected. Companies rely on suppliers from different countries to source raw materials, components, and services. This interconnectedness has increased supply chain risks, including disruptions due to natural disasters, geopolitical tensions, or economic crises.

In conclusion, globalization has significantly impacted the automobile industry, shaping it through increased market access, trade liberalization, outsourcing, technological advancements, competition, environmental standards, and supply chain complexity. The industry has adapted to these changes and continues to evolve, driven by the global economy and consumer demands.