The automobile industry is one of the key economic sectors worldwide in terms of revenue generation. It deals with designing, developing, producing, marketing as well as selling of automobiles (Domansky 14). Not included in this industry, are those companies dealing with cars after they have been delivered to the consumer such as motor vehicle fuel filling stations and repair shops among others. This industry provides the basic mode of transportation preferred by a majority of developed economies globally. According to Holden-Stone (247), the major markets for automobiles in the world include Brazil, China, Russia and India. It has been established that emerging motor vehicle markets are purchasing even more cars than the established ones; in fact emerging markets account for 51% of the global sale of light vehicles, according to a recent study. Five leading automobile manufacturing companies by the end of last year (2010) included Toyota Motor Corporation, General Motors Company, Volkswagen Group AG, Hyundai Motor Group and Ford Motor Company.
According to Epstein (75-80), the major economic factors influencing the automobile industry are competition and a weak economy that has resulted in decreased market share and sales. For instance, the economic recession in the United States in 2007 led to increased rate of unemployment and a decline in personal wealth. Consequently, there was a decrease in the sales of light vehicles; for instance between 2008 (February) and 2009 (February), US sales of Detroit 3 decreased by 49%, while that of Toyota, Nissan and Honda reduced by 39%. In addition, the recession has resulted in less available credit thus limiting the ability of producers and suppliers of automobiles to fund their businesses; customers to buy cars and dealers to get loans for maintenance of their inventories. In addition, stiff competition in the global automobile industry has led motor manufacturers to increase competition of their products through innovation and technology use. As a result, they have been able to remain competitive in the market and enhance their sales.