There is a lot of
competition in the automobile market. From German to Japanese, mid sized to
mini van, gas-guzzler to solar powered, the market seems endless. Speaking just
for the US market, we import more cars then we export, we are a net borrowers.
This article however exhibits the world market for automobiles. Toyota,
the Tokyo-based company surpassed Ford, the Detroit-based company in
over all global sales for 2012. Could this possibly lead to a decrease in US
exports and an increase in imports leading to an increase in real exchange
rates.
Although it is difficult to determine which company has the best selling vehicle, it is clear that America imports about as many vehicles as it is producing here. If this leads to a decrease in exports there will be a decrease in net exports, and the exchange rate will be impacted as well as the GDP.
ReplyDeleteThe U.S. may currently import more cars than it exports, but the article states that the Ford Fusion is gaining ground on the Toyota Camry. If this is the case, the U.S. may begin importing fewer foreign cars. In turn, the exchange rates will be affected while GDP rises.
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