Western European Car Industries & Economies of Scale :: Business Economics Car Industry

Western europiuman Car Industries & Economies of Scale thither argon a lot of factors that determines whether or not a participation go away be successful. These factors are usually derived from economics. One factor that I plan to focus on is scale economies or better cognise as economies of scale. Firms that have blow uped their scale of operations to obtain economies of deal production have survived and flourished. Whereas smaller firms who have not been able to lucubrate have usually ended up as high-cost producers. The topic discussed impart be the Italian automotive attention and how it is affected by economies of scale. As the economic integration of Europe continues, it is likely that increasing international contestation will affect firms in European industries. As other countries expand and have more trade worldwide, the more the European economy will be affected. The economy will tend to buy from outside of Europe due to taste and lower prices. There would be mo re firms to pick from decreasing Economies of scale are significant because motor vehicle manufacturing is an persistence ground on growth. Since the automotive industry being discussed is in Italy, it is based primarily around one company, ordering. The majority of sales of railcars in Italy are acquired by revision. The automotive industry constitutes a substantial part in the European economy because this industry makes up 10 percent of nitty-gritty manufacturing output. An economy of scale is an important factor within the Italian automobile industry. This is due to continuing European integration and that the Italian automobile industry is dominated by a company known as Fiat. Fiat was founded in July 1899. Fiat started with a plant in New York that fabricate then established relationships with other countries leading to exports to France, Austria, Great Britain and Australia. Since Fiat was called on for a lot of equipment during WWI, Fiat became well known throughout Europe. As years passed Fiat began to also acquire other automobile companies much(prenominal) as Lancia, Autobianchi, Abarth, Alfa Romeo, Maserati and Ferrari. In 1988, 59.9% of the vehicles sold and approximately 99.2% of the automobiles produced in Italy were made by Fiat. The company continued to enter numerous international agreements for the manufacturer of Fiat products and to expand its investments. This also lead to new factories that were built outside of Italy, which were southwestward Africa, Yugoslavia, Argentina, Turkey and Mexico.