Automotive

industry
crisis of
2008–2010
:Team members
Ahmed khaled said 20080044 (searching and collecting the
cases and all the data that we need it from the internet)

Maged mohsen el-wakeel 20080631 (summaries the case and

the data that we got it)

Moaz abdel raheem 20080626 (typing the project at word)

Ahmed gamal 20080400 (he did the outline. also he

organized the shape of the project and work in the
presentation slides and the design of it.)
Summary
The automotive industry crisis of 2008–2010 was a part of a
global financial downturn. The crisis affected European and
Asian automobile manufacturers, but it was primarily felt in
the American automobile manufacturing industry. The
automotive industry designs, develops, manufactures,
markets, and sells motor vehicles, and is one of the world's
most important economic sectors by revenue. The term
automotive industry usually does not include industries
dedicated to automobiles after delivery to the customer, such
as repair shops and motor fuel stations. The Automotive
industry has had a large outcome in production over the
past 20 years. The downturn also affected Canada by virtue
of the Automotive Products Trade Agreement The Canada
—United States Automotive Products Agreement, commonly
known as the Auto Pact or APTA, was an important trade
agreement between Canada and the United States. It was
signed by Prime Minister Lester B. Pearson and President
Lyndon B. Johnson in January 1965.[1]

It removed tariffs on cars, trucks, buses, tires, and

automotive parts between the two countries, greatly
benefiting the large American car makers. In exchange the
big three car makers (General Motors, Ford, and Chrysler)
and later Volvo agreed that automobile production in
Canada would not fall below 1964 levels and that they would
ensure the same production-sales ratio in Canada.
Before the Auto Pact the North American automobile
industry was highly segregated. Because of tariffs, only three
percent of vehicles sold in Canada were made in the United
States, but most of the parts were manufactured in the U.S.
and overall Canada was in a large trade deficit with the
States in the automobile sector.

The Pact caused vast and immediate changes. Canada began

to produce far fewer different models of cars. Instead, much
larger branch plants producing only one model for all of
North America were constructed. In 1964, only seven
percent of vehicles made in Canada were sent south of the
border, but by 1968, the figure was sixty percent. By the
same date, forty percent of cars purchased in Canada were
made in the United States. Automobile and parts production
quickly surpassed pulp and paper to become Canada's most
important industry. From 1965 to 1982, Canada's total
automotive trade deficit with the U.S. was $12.1bn; this
subsumed a surplus of around $28bn worth of assembled
vehicles and a deficit of around $40.5bn in auto parts.[2]

The 2 nominal goals of APTA were to reduce production

costs in Canada by dint of more efficient production of a
smaller range of vehicles and components, and to lower
vehicle prices for consumers.[2] The agreement is said [who?] to
have benefitted Canadian workers and consumers by dint of
lowered prices and increased production creating thousands
of jobs and increasing wages. These newly-created jobs were
highly localized to southern Ontario, with little employment
benefit to the rest of Canada. The jobs created by the new
market conditions under the pact were almost exclusively
blue collar; administration, research and development
remained in the United States. This transfer of control of
Canadian automating operations to their US parent
corporations substantially reduced the autonomy of the
Canadian operations with respect to vehicle and component
specification, design, and sourcing; manufacturing and
production, branding and marketing, corporate policy, etc.[2]
The agreement also prevented Canada pursuing free trade
in automobiles elsewhere internationally, and this North
American exclusivity led Canada to adopt American
technical regulations rather than participating in the
European-based development of international consensus on
auto safety and emissions regulations.[3]

The Auto Pact was abolished in 2001 after a World Trade

Organization ruling declared it illegal, though by that time
NAFTA had effectively superseded it.

The automotive industry was weakened by a substantial

increase in the prices of A motor fuel is a fuel that is used to
provide power to motor vehicles.

Currently, the majority of motor vehicles worldwide are

powered by gasoline or diesel. Other energy sources include
ethanol, biodiesel, propane, compressed natural gas (CNG),
electric batteries charged from an external source, and
hydrogen

linked to the 2003-2008 energy crisis which discouraged

purchases of sport utility vehicles (SUVs) and pickup trucks
which have low fuel economy. Fuel usage in automobiles
refers to the fuel efficiency relationship between distance
traveled by an automobile and the amount of fuel consumed.

There are no quantities or units for fuel usage defined in the

International Standard ISO 80000 Quantities and Units, so
the nationally-defined reciprocal quantities fuel economy
and fuel consumption are used in this article.
[3]
The popularity and relatively high profit margins of these
vehicles had encouraged the American "Big Three General
Motors, Ford and Chrysler are often referred to as the "Big
Three" or, more recently the "Detroit Three",[1] being the
largest automakers in the United States and Canada. They
were for a while the largest in the world and two of them are
still a mainstay in the top five. Ford has held the position of
second-ranked automaker for the past 56 years, being
relegated to third in North American sales, after being
overtaken by Toyota in 2007. That year, Toyota produced
more vehicles than GM, though GM still outsold Toyota that
year, giving GM 77 consecutive calendar years of top sales.
For the first quarter of 2008, however, Toyota overtook GM
in sales as well.[2][3] In the North American market, the
Detroit automakers retained the top three spots, though
their market share is dwindling.[4] Honda passed Chrysler
for the fourth spot in 2008 US sales.[5][6] Since then, because
of Toyota's woes with their recent unintended acceleration
recall, Toyota has fallen back to fourth place in sales, with
Honda trailing in fifth place, allowing the Detroit Three
reclaim their Big Three title" automakers, General Motors,
Ford, and Chrysler to make them their primary focus. With
fewer fuel-efficient models to offer to consumers, sales began
to slide. By 2008, the situation had turned critical as the
credit crunch [4] placed pressure on the prices of raw
materials.

Car companies from Asia Japanese automakers Toyota,

Honda, and Nissan, among many others, have long been
considered the leaders at producing smaller, fuel-efficient
cars.[1] Their vehicles were brought to the forefront, due to
the 1973 oil crisis which had a major impact on the auto
industry. For instance, the Honda Civic was considered
superior to American competitors such as the Chevrolet
Vega and Ford Pinto. The Civic is the best-selling car in
Canada for 12 straight years in a row.,[1]

As well, the Nissan 240Z was introduced at a relatively low

price compared to other foreign sports cars of the time
(Jaguar, BMW, Porsche, etc.), while providing performance,
reliability, and good looks. This broadened the image of
Japanese car-makers beyond their econobox successes, as
well as being credited as a catalyst for the import
performance parts industry.

, Europe Germany

The German trio Mercedes-Benz, BMW and Audi are often

referred to as "Germany's Big Three",[35] although the
actual major automobile manufacturers are the Volkswagen
Group (producer of Audi) and Daimler AG (producer of
Mercedes-Benz), along with BMW.

, North America

is the northern continent of the Americas,[4] situated in the

Earth's northern hemisphere and in the western
hemisphere. It is bordered on the north by the Arctic Ocean,
on the east by the North Atlantic Ocean, on the southeast by
the Caribbean Sea, and on the west by the North Pacific
Ocean. South America lies to the southeast of the continent.

North America covers an area of about 24,709,000 square

kilometers (9,540,000 square miles), about 4.8% of the
planet's surface or about 16.5% of its land area. As of July
2008, its population was estimated at nearly 529 million
people. It is the third-largest continent in area, following
Asia and Africa, and the fourth in population after Asia,
Africa, and Europe.

and elsewhere have implemented creative marketing

strategies to entice reluctant consumers as most experienced
double-digit percentage declines in sales. Major
manufacturers, including the Big Three and Toyota offered
substantial discounts across their lineups. The Big Three
faced criticism for their lineups, which were seen to be
irresponsible in light of rising fuel prices. North American
consumers turned to smaller, cheaper, more fuel-efficient
imported from Japan and Europe. However, many of the
vehicles perceived to be foreign were actually "transplants,"
foreign cars manufactured or assembled in the United
States, at lower cost than true imports.[5]

Outline:
i. The automotive industry crisis of 2008–2010 was a part of a global
financial downturn.

ii. Crisis affected European and Asian automobile manufacturers, but it

was primarily felt in the American automobile manufacturing
industry.

iii. The downturn also affected Canada by virtue of the Automotive Products
Trade Agreement.[1]

iv. The automotive industry was weakened by a substantial increase in the prices of
automotive fuels[2] linked to the 2003-2008 energy crisis which discouraged
purchases of sport utility vehicles (SUVs) and pickup trucks which have low fuel
economy
Sources

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