Topic > History of the automobile in Europe - 1936

The automobile was first introduced in Europe 128 years ago. Since then, a large automotive industry has established itself with a wide range of car manufacturers, suppliers and after-sales services. An industry can be defined by Stigler as follows “an industry should encompass the maximum geographic area and the maximum variety of production activities in which there is strong long-term substitution” (Lipczynski and Wilson et al., 2005). The automobile industry can be traced back to Henry Ford, who was responsible for developing the assembly line technique of mass production that allowed the American middle class to afford to purchase vehicles. However, despite its impact, Ford's competitive advantage was short-lived and was soon taken over when General Motors' Alfred P. Sloan sensed that consumers wanted more variety than was being offered to them and offered "a car for every bag and purpose” (Holweg, 2014 , p.14). Customers were soon able to choose from a wider range of products that included cars in different colors as opposed to Ford's standard black cars. Employment Europe is the largest automotive manufacturing region with nearly 20 million vehicles assembled in 2001. It is the world's largest market in terms of size and competition is intense. The automotive industry accounts for up to a third of jobs in Europe's manufacturing sector. In any sector it is employment that generates the greatest help to an economy. Employment derived from the automotive industry is quite large, and many industries supply automotive manufacturers and dealers. Direct employment, indirect employment and exports contribute to a prosperous and growing economy. Employment in the UK car industry is in decline... mid-paper... as 'build to order' (BTO) links production to customer demand, building a car for a specific customer order by three weeks or less and without accumulating unsold inventory. Renault, Nissan, BMW and Volvo have implemented such programs and have reported success. Supply chain changes Companies are building long-term collaborative relationships with suppliers rather than switching opportunistically. This means that they do not totally base supplier decisions on costs, but try to build relationships with their suppliers so that they can understand and try to help the company's strategies to achieve objectives heavy reliance on outsourcing, asking suppliers to assist in design and assembly to meet the evolving variety of products that manufacturers seek to offer their customers and turn their innovative new ideas into reality.