Automotive Industry

Automotive Industry

Introduction
In the 20th century, General Motors (GM) was the largest car maker from 1931 to 2008, when it was surpassed by Toyota (Costantini, 2011). In 2005, the U.S. market share was shifting from the U.S. automakers to their Asian competitors. The Japanese automakers had the year’s largest sales gains. According to Autodata Corp., The Big Three (GM, Ford and Chrysler) fell from 61.7% three years ago to 56.9% while Toyota had a share climb from 34.6% in 2002 to 36.5% (De Vries, 2006).

4. Discussion  
Development cost is the total cost of a project from the initiation point till the implementation point (Vijay, 2007). This includes the off market analysis, research and development costs, advertising costs, storage costs, and plant maintenance costs. Where else tooling cost is the cost of the appliances and production of the tooling requirements for the performance of a production line (Vijay, 2007). The Japanese managed to reduce these cost by applying two main ideas that is the lean approach and the targeting costing. The lean approach focuses on the importance of the customers and the employees (Barbara 2011). Where else target costing aims to reduce the life cycle of a typical vehicle before production so that the estimate profit is reachable (Juhmani and Omar, 2010). Keeping these concepts in mind, the Japanese came up with a few strategies to break through the global market.
The first was to please the employees as their happiness ensures the high-quality productivity. This was done by getting the union to change the inflexible work rules. It was found that the Japanese were paid higher compared to their competitors such as ford (Robert, 2005). Moreover, the communications between the designers was also improved so that they can come up with productive ideas within a short period of time. The company Nissan managed to apply this and was able to achieve smoother coordination in the design and manufacturing of products among different divisions...