You are the CEO of a European auto maker group Audi company that is planning to

Question

You are the CEO of a European auto maker group Audi company that is planning to launch a subsidiary in Detroit Michigan (USA). The size of the European company is the equivalent of a fortune 500 company in the USA. You are asked to research the market and international management issues, including finding detailed data. You should consider the broad auto industry in the USA but you will also be asked to find detailed information about the major companies that operate in that industry.

Please answer the question belows

Discuss some cultural issues that you may encounter in Detroit in your own words at least 3 paragraphs

Explanation / Answer

Analysis: USA automobile industry.

Japanese manufacturer Toyota is the biggest competitor for the mainstream American car manufacturers, in vehicle sales SUV’s are the most sold vehicle segment in the USA, followed by sedans, sports cars and coupes. Based in market share General Motors, Ford and Toyota are the best performers. Economic treaties such as NAFTA has facilitated increment in manufacturing and assembly related economic performance and job creation.

Other manufacturing & assembly plants:

Detroit might have lost its charm what it used to be but Michigan still does have the ecosystem to support the car industry. Volkswagen, BMW, Diamler AG are three German automobile companies having their assembly plants in multiple US states such as Tennessee, South Carolina and Alabama respectively. Other than these German players, other companies of different nationalities such as Japanese or South Korean have their independent assembly plants also in various states in USA.

Analysis of Detroit for Audi’s subsidiary:

Detroit, Michigan has long been regarded as Mecca of American automobile industry, more than 125 automobile manufacturer had their facility in the city and 1 out of 6 American in mid-1920’s was employed by the automobile industry based in Detroit. In 1970’s the big three manufacturers faced financial and managerial issues which led Chrysler to file for bankruptcy and Ford, GM struggled with these reputation, these factors were caused due to political and socio economic factors such as oil crisis during and Nixon and Carter’s presidency, that led automobile manufacturers re analyse production strategy and the huge manufacturing work force present in the city struggled to cooperate with these decisions and compelled them to move elsewhere in search of better opportunities. After testing competency factors; Ford, General Motors and Chrysler stood out to be leading players while others failed to compete but in recent times Detroit has faced more pressing financial issues, issues that led the city to file for Chapter 9 bankruptcy in 2013. Now, only Ford and General Motors have their production facilities in Detroit with a very limited number of skilled workforce remaining in the city.

Ethnicity of the population is also a mater to discuss as more and more work seekers got in to manufacturing jobs in Detroit, the African American population rose substantially and the white population was suburbanized with the fall of jobs many people based in the city limits found it hard to get themselves in decent jobs which also gave rise to crimes and drug abuse, which changed the city’s reputation negatively.

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