Dependent Variable

The automotive industry is considered as an economic heavyweight due to which it has acquired the status of a key sector of the economy for every major country in the world. The annual global turn over of auto industry during the year 2005 remained $2.8 trillion while the size of trade has grown to a massive level of $ 1,016 billion, which represents 9% of the world merchandise trade. In 2006, over 69 million motor vehicles including cars, vans, trucks, buses and coaches were produced worldwide. In 2006 Japan (11.484 million units), US (11.264 million units), China (7.189 million units), Germany (5.820 million units) and South Korea (3.840 million units) were the top five motor vehicle producing countries in the world. 

Auto industry employed directly over 5% of the world’s total manufacturing labor force and contributed over $ 634 billion in tax revenues of twenty countries only. The auto industry is one of the largest investor in Research and Development, which help to increase the technology level in other industries as well.

CRISIS IN WORLD AUTOMOBILE INDUSTRY

The automotive industry crisis of 2008–2009 was a part of a global financial downturn. The crises affected European and Asian automobile manufacturers, but it was primarily felt in the American automobile manufacturing industry. The downturn also affected Canada by virtue of the Automotive Products Trade Agreement. 

The automotive industry was weakened by a substantial increase in the prices of automotive fuels linked to the 2003-2008 energy crisis which discouraged purchases of sport utility vehicles (SUVs) and pickup trucks which have low fuel economy. The popularity and relatively high profit margins of these vehicles had encouraged American "Big Three" automakers, General Motors,Ford, and Chrysler to make them their primary focus. With few fuel-efficient models to offer to consumers, sales began to slide. By 2008, the situation had turned critical, as the global financial crisis and the...