The Automotive Industry and Global Trade

In the United States, one city is typically synonymous with the automotive industry. It’s challenging to think of an American made car without thinking of Detroit, Michigan, and in recent years the financial trouble the automobile giant has endured. Though foreign manufacturers in Japan and Korea have gained strength and drivers in the US, it doesn’t necessarily mean US automakers are done. MSNBC reported in late 2011 that the Big 3 in Detroit – Chrysler, Ford, and GM – enjoyed a nearly 30 percent increase due to a demand in sports utility vehicles and trucks.

Quick Facts About the Automotive Industry

  • Since 2000, an average of 48 million passenger cars alone have been manufactured annually around the world.
  • According to Worldometers, China produces one of every four new cars, and more than half of all cars are produced in Asia and Oceania.
  • Of the approximated one billion passenger cars on the road around the world, close to 25 percent of them are registered in the United States. (Source: International Organization of Motor Vehicle Manufacturers)
  • According to Businessweek, the top selling car in the world is the Toyota Corolla, with sales of well over 35 million.

Major Exporters of Automobiles

While China is one of the world’s largest producers of passenger vehicles, the country is not necessarily ranked high among top global exporters. The International Trade Centre recently put out a report on top automotive exporters, with the following leading the pack:

  • Germany – The roots of the German automotive industry date back to the late nineteenth century and the various patents owned by Karl Benz. Where in that time the country produced barely a thousand cars a year, now over five million are manufactured. Popular German brands include Mercedes-Benz, Volkswagen, BMW, and Porsche.
  • Japan – Gasoline-powered vehicles have been built in Japan early as 1907. Despite natural disasters that threatened the nation’s economy, Japan has worked to maintain its place among top car producers and exporters. Toyota, one of the top selling brands of all time, is based in Japan, as are Nissan, Honda, Mazda, and Subaru.
  • The United States – The US auto industry took a hit in recent years due to the economy. Through a combination of asset liquidation and government funding, the major brands (Ford, Chrysler, and General Motors) have worked to stay afloat. Despite this issues, the US remains a top producer with over seven million cars made on average in the country.
  • Republic of Korea – Over the last decade, South Korea has established itself as an automotive power thanks to an association between Daewoo Motors and GM, and Hyundai’s presence in the US with a major assembly plant.
  • Canada – While the country has no major native brand, Canada is important to the automotive industry by virtue of the many plants established by foreign brands, including Ford, Toyota, Chrysler and Honda.

Major Importers of Automobiles

While many countries produce domestic brands, automobile imports remain strong in economies that seek certain qualities, such as fuel efficiency and safety features. Among the top importers of automobiles:

  • The United States – Of the top brands sold in the US in the last year, many names bring to mind manufacturers from other lands: the Toyota Camry and Corolla, the Nissan Altima, and the Honda Civic and Accord.
  • Germany – While German brands dominated domestic sales in 2011, there is enough of a demand for foreign models to make Germany an important importer. Ford, Skoda (based in the Czech Republic), and Hyundai are popular names.
  • United Kingdom – Luxury is often synonymous with the British automotive industry. Aston Martin, Bentley, and Rolls Royce are three makes manufactured here, though Ford, Volkswagen, and the French Peugeot are seen more often on the roads.
  • Italy – Italy is known for the Fiat and Ferrari, but foreign makes like the Ford Fiesta, the French Citroen C3, and the Volkswagen Golf are also in demand.
  • France – The French appear greatly committed to domestic brands, particularly Renault and Peugeot, but foreign models from Ford, Volkswagen and the Romanian Dacia are gaining ground in the last year.

The Aftermarket

Equally important to the automotive industry is the manufacture and sale of auto parts and accessories, commonly known as the aftermarket. Sub-industries relevant to automobile sales may include products like tires and paint, stereo and GPS, engines and chemicals needed for operation, leather and vinyl for seating and safety features. According to the Automotive Aftermarket Industry Association (AAIA), the aftermarket in the US alone totals over $250 billion.

Though faltering economies and natural disasters have given the international automotive industry a number of challenges, one can conclude sales are destined to remain strong so long as the need for personal transportation remains. How and where people will by their cars may change over time as considerations for eco-friendly features grow in demand, but so long as people continue to buy automobiles the global industry will continue to gain speed.

Finding Finance and Insurance Careers in the Automotive Industry

Interested in finance and insurance (F&I)? Love cars? Looking for a way to merge the two into a long-lasting and fulfilling career in the automotive industry? It’s time to consider a career in auto sales and F&I management. Now is a great time to invest in F&I training, which can provide everything you need to succeed in this career. That means you will acquire excellent leadership and communication skills and have the expertise required to handle the financial and legal aspects of a sales transaction.

Automotive Business Manager programs are designed to teach the skills required to oversee the financial and legal aspects of the automotive industry. Students in these automotive training programs are trained in finance and lease options, sale of after-market products and the use of specialized software.

Becoming an F&I manager means you will be in the center of the action. It also means you will have a direct impact on profitability and be rewarded accordingly. Need another reason to invest in F&I manager? Job Futures 2000 predicts that more than one-third of all jobs created in Canada will require a skilled trade designation or a college diploma.

What about the extensive restructuring of the automotive industry? There has been a lot of change, but the automotive industry remains one of the world’s largest and most important business sectors. Moreover, a surge in demand is expected as consumers make purchases that would normally have been made in the last two years and additional demand is created by increases in population, new consumer offerings and improved manufacturing technology. Employment prospects for automotive sales and F&I management are good for the following reasons:

  • A growing shortage of well trained individuals to fill sales occupations
  • Service Canada predicts there will be strong demand for qualified candidates in Sales and Service, Business, Finance and Administration “because this sector will account for more than 45% of all retirements over the next five years.”
  • Significant worldwide growth within the automotive industry

You know what happens when demand for a specific job goes up. Salaries also go up. That’s exactly what is happening for F&I Professionals. Key elements of F&I training programs can include the following areas of study:

  • Business Manager’s Role in the Dealership
  • Financial Institutions and Their Requirements
  • Getting the Contracts Purchased
  • Credit Reporting Overview
  • Understanding Credit Scores and Risks
  • Reading Credit Reports
  • Prequalification Using Credit Reports
  • Cash Conversions
  • Bank Conversions
  • Use a Customer-Friendly, Aggressive F&I Process
  • Qualify Your Customer, Use The Right Words
  • Product Knowledge
  • Effective Selling Techniques
  • Menu Selling Leasing Skills and Techniques

The Automotive Industry Crisis is a Customer Service Crisis

“If we are not customer driven, nor will our cars be.” Henry Ford

As you read this article, I believe you will discover the real key to true greatness. The key is to be of service to others. No matter who you are, if you are breathing you are in customer service in one way or another. The concept of service has not been understood by most people. Whether you are Madonna, or Billy Graham, you are in customer service. We are all rewarded materially based on the pleasure or service we bring to others.What do all the great ones have in common? They have an attitude of being of service instead of being self-serving. They all serve their audiences or customers with impeccable excellence which resulted in them becoming great.

THE AUTOMOTIVE INDUSTRY CRISIS
We have a crisis in this country underlying the financial crisis. I believe that it is at the root of the present financial crisis. It is called the CUSTOMER SERVICE CRISIS! The word crisis in Chinese means danger yet opportunity. We definitely have lots of opportunity to improve in our nation in the area of customer service. I think it is the real financial problem we face today. I am not an economic genius, but I am a customer service expert. I am tired of watching people put band-aids on economic cancer. So I am writing a series of articles which will get to the root of the economic problem and if heeded could help turn this crisis around.

AMERICA WAS BUILT ON SERVICE, BUT TODAY WE HAVE BECOME “SELF-SERVING!”

We have a service crisis that has caused a financial crisis in everything from banking to housing, and of course, automotive.With GM, Chrysler and others bleeding, and people losing their livelihoods and retirements you don’t have to be a rocket scientist to see it. Have you had any poor customer service lately? Cold food or dirty restrooms, Late deliveries, Defective parts, Unfulfilled orders, Lazy, rude staff (this is epidemic!!!)

I started out in the auto industry in the mid 70s or what we now call the good old days. I was working for the largest GM dealership in Alaska and one of the largest in the country. This was when GM was GM! I started out washing cars (or busting suds as we use to say). I eventually moved up and became a corporate trainer for the SOUTHEAST Automotive group. One thing I noticed over the years was the deterioration of customer service in the automotive industry. My first boss was a thirty year company man that was customer driven and he constantly reminded us that without a customer we would all be unemployed!

I drank the kool-aid, I believed him. But as the years passed, I noticed that the customer started to become more of a statistic on a graph in a conference room where strategies for up-selling and getting more out of each transaction at the point of sale was the goal. At the same time we were cutting back on quality and service! “Higher profits” – less service became the mantra. Don’t misunderstand me, I believe in profit. But I believe what my good friend and mentor Dr. Ken Blanchard has said about it; “Profit is the applause we get for taking care of our customers…

“If We Are Not Customer Driven, Then Our Cars Won’t Be Either!” Henry Ford