MKTG400: Branding Week 4 Assignment
For the Midterm this week you will choose one member of the automobile industry and will prepare a 3-5 page essay on how government regulations play a central role in product decisions.
The Midterm must be in APA format and make sure to provide at least three outside sources to support your work. The Midterm will be submitted to the assignment folder.
MKTG400: Branding Week 4 Assignment
General Motors Automobile Company and Government Regulations
Regulating the automobile industry by the government directly affects how cars look, how they are built, how safe they are, and how well they work. Also, the regulations has a big impact on the automotive industry because it raises the cost of making cars and restricts how cars are sold and promoted. Automakers risk heavy fines and penalties if they don’t adhere to these standards, which benefit consumers and safeguard the environment. General Motors and how government restrictions influence business choices and activities are examined in this essay. Regulations imposed by regional, state, and federal governments influence every element of General Motors Company and have had a significant financial effect.
Recently, legislators have imposed a bigger emphasis on fuel economy. The Corporate Average Fuel Economy (CAFE) program is a series of national requirements for car fuel economy that began in the early 1970s in response to the Arab oil embargo (Greene et al. 2020). The Obama administration modified the rules in 2012 to steadily improve fuel economy objectives each year, eventually reaching 54.5 miles per gallon by 2025. To accomplish these objectives, automotive firms, including General Motors, must develop and implement innovative technology that ensures future vehicle models are both fuel-efficient and safe. GM has lately reacted to the regulatory environment via several measures. Between 2011 and 2016, GM sold 705,000 Silverado and Sierra heavy-duty vehicles equipped with a substantially enhanced Duramax diesel engine undergoing emissions testing. The sale of these vehicles has been marred by controversy after a 2017 lawsuit alleging that the firm misrepresented Duramax by inflating pollutant levels during testing.
In recent years, General Motors has taken more significant strides and choices to reaffirm its commitment to combating climate change by pledging to an ‘All-Electric Future.’ GM’s first step toward electrifying its whole fleet was the 2017 Chevrolet Bolt, dubbed the world’s first mass-market electric vehicle. The Company declared in October 2017 that it intends to capitalize on Bolt’s success by releasing 20 more electric cars by 2023, therefore increasing the fleet’s average fuel economy. The launch of so many new cars will place a burden on General Motors’ production facilities and the Company’s whole supply chain and decision-making processes.
Emissions rules may have a financial impact on a car manufacturer. Catalytic converters and other emission-reduction technologies are too costly to design, test, and large-scale. While this expense is often passed on to the consumer, environmental regulations continue to significantly influence how the automobile industry operates on a day-to-day basis. Government regulation is not confined to the United States alone. The majority of automobile manufacturers, including General Motors, produce automobiles exported worldwide. It is in their long-term interests to have homogeneous autos that do not need customization before export (Carley et al., 2019). As a result, many vehicles are manufactured to conform to US regulations and international standards. This adds expense and complexity to the design process since several regulations must be met for a vehicle to be street legal in various world locations.
General Motors is committed to carbon neutrality in all of its worldwide goods and activities by 2040, backed up by science-based objectives. GM intends to achieve these targets by moving to battery-electric cars or other zero-emission vehicle technologies, obtaining renewable energy, and using minimum offsets or credits. GM intends to invest in carbon credits or offsets to offset the projected residual carbon emissions. Credit and offset solutions will be evaluated in the future years as the most efficient, balanced, and inclusive alternatives develop. The organization understands that offsets should be utilized sparingly and should represent a comprehensive approach to minimizing the consequences of climate change and assisting people worldwide in thriving. The Company collaborates with governments and businesses worldwide to create a safer, greener, and healthier environment. Achieving an appropriate sustainable energy future requires a partnership between the American car industry, led by General Motors, and the US government to encourage good-paying employment, consumer acceptance, a strong charging infrastructure, and significant investment in US R&D, manufacture, and distribution networks. GM believes the approach will contribute to zero harm, zero emissions, and reduced congestion. General Motors looks forward to joining the President, Congress, and the American people in commemorating the passage of legislation promoting economic development, job creation, and sustainability.
As is the case with many other large businesses in the United States, the automotive industry is subject to many government-imposed rules and regulations. Regulations have a substantial impact on how cars are constructed, how components are manufactured, and the included safety measures, thereby significantly impacting the companies’ choices and bottom lines. Government rules have defined the degree of fuel economy that autos must attain in recent years. These laws often increase manufacturing costs and impose restrictions on automobiles’ marketing and promotion. General Motors’ light truck sales are up 7% year to year, while all other GM vehicle sales are down 19%, complicating the corporation’s efforts to reach mandated fleet emission reduction objectives (Rice 2019). Exacerbating the impact of shifting customer preferences is that SUVs and trucks are among General Motors’ most lucrative vehicle segments, resulting in a conflict between financial and government incentives affecting the Company’s goals and plans.
Carley, S., Zirogiannis, N., Duncan, D., Siddiki, S., & Graham, J. D. (2019). The macroeconomic effects of 2017 through 2025 national fuel economy and greenhouse gas emissions standards. Journal of Policy Analysis and Management, 38(3), 732-763.
Greene, D. L., Greenwald, J. M., & Ciez, R. E. (2020). US fuel economy and greenhouse gas standards: What have they achieved and what have we learned?. Energy Policy, 146, 111783.
Rice, D. (2019). The driverless car and the legal system: Hopes and fears as the courts, regulatory agencies, Waymo, Tesla, and Uber deal with this exciting and terrifying new technology. Journal of Strategic Innovation and Sustainability, 14(1), 134-146.