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Impact of Climate Change on Automotive Business

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IMPACT OF CLIMATE CHANGE ON AUTOMOTIVE BUSINESS

Climate change has been one of the most discussed issues in these modern days. It is prove on many researches that the increase in man-made green house gas emission can significantly affect the climate in the world, on every part of the globe. In the last few years, climate change has become the most researched subject in science. The reason is that because climate change can affect significantly to the earth and it has to be taken care of. In a business world, particularly in Automotive Industry, climate change is also one of the must discussed subject, and because of automobile is one of the factors that produce the most CO2 (Carbon dioxide), it become one issue that force automotive industry to change their product to reduce the amount of CO2 emission.

Climate change in automotive industry represent both threat and opportunity in the business. It gives opportunity for the car makers to develop a new technology that is more environmental friendly, which can reduce the amount of green house gas emission. It also gives the carmakers to create a more energy efficient in their operations, which can cut the unnecessary production costs. Other opportunity is the fact that they will use this global concern to further research and investigate the use of creating a new energy source, and helping reducing the pollution caused by the use of fossil fuels.

However, for automotive industry, climate change does not only provide opportunities but also threat to the business. It is a threat because about 12 percent of all manmade green house gas emission today is in cars and trucks of all makes on the road today, which means that the car produced in the last 20 decades are producing enormous number of Green House Gas and it is a threat for car maker company because these are their products and if the concern about the climate change, who would want to purchase a car that produce too much Green House Gas emission that will raise the chance for a climate change.

Almost all car makers around the world are responding to this issue and have begin their research to reduce the risk of climate change. The steps that the car manufacturers have to take to deal with this situation are to reduce the amount of CO2 emissions and waste produced by both of their manufacturing factories and vehicle by implementing new measures in their factories and by looking at using renewable fuels that produce cleaner emission. Another step could be to start producing more hybrid (petrol/electric) vehicles which consume less petrol and produce very small amount of CO2 emission. Leader car makers such as Toyota, Ford, and General Motors have developed technologies that are more environmental friendly. Toyota, as the market leader in the world, show that they are after a new car with economy fuel consumption and low CO2 with their new hybrid synergy drive program and have released an electric powered car such as Toyota Prius which use electric power that does not use petrol when running in a low speed or running out of petrol. This technology, clearly a result because of the climate change issue and they are answering to this global problem. On the other hand, the USA-based car manufacturer Ford also has been on its process in reducing the CO2 emission produced from their factories. From a report by Ford, it is a fact that since 2000, they have the cut the emission of CO2 from their operations by 15% and have benefited from the energy cost savings that go with it. Other manufacturer such as BMW have developed their own technologies in response to this issue by developing a car that only consume hydrogen and emit water vapor as the emission.

The cost to implements both threats and opportunities to reduce the Climate Change are enormous. Both in terms of financial means, effort and

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