Automotive Industry and New Technolgy

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Category: Business and Industry

Date Submitted: 01/04/2015 07:20 PM

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1.0 Scale and Economic importance of Automobile industry

The automobile enables a degree of flexibility and mobility that was undreamed of a century ago. Consequently, the automotive sector influences greatly on global economic activity in a variety of ways and has been an important global driver of growth, income, employment, and innovation.

As noted by Organisation International des Constructeurd d’Automobiles; “If the vehicle manufacturing were a country it would be the sixth largest economy in the world”. This reiterates the magnitude and scale of the automotive industry in the world. Most economic activities in the world are carried out with less difficulty because of the mobility provided by the automobile industry (1).

The automotive industry is an important sector of the overall economy, particularly in industrialised countries. In the USA , the automobile is second only to a house in purchase value for the average American household and the average manufacturing job in the automotive sector pays 60 percent more than the average U.S. job. It is estimated that the industry generates 10.4 jobs for every worker directly employed in automotive manufacturing and support services (excluding auto dealers) in the United States. Employment spillovers are seen in manufacturing and nonmanufacturing industries, including retail trade and services. In 2000 motor vehicles and equipment (assemblers and suppliers) expenditures on research and development (R&D) outpaced R&D spending in many of the thirty-nine largest industry groups, including pharmaceuticals and medicines, semiconductors and other electronic components, communications equipment, and computers and peripheral equipment (2).

The automotive industry is one of the biggest employers, accounting for more than 14 percent of all workers in world manufacturing. Employees work not only at the major automakers but also at many family-run and medium-sized companies in the supply chain (3).

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