Comparative advantage on U.S automakers

    The world is becoming flat and also globalization drives changes for U.S automakers. Even though the U.S automakers have to pay health care benefits for their employees that will affect the comparative advantage, on the other hand it also accumulates the American government to come up some new ideas for reviving the auto industry. For example, in August, the Obama administration promulgated fuel-economy and carbon-pollution limits for 2017 t o2025 model cars. This new policy pushed U.S companies to employ modern fuel-saving technologies. With the demand of fuel increase, oil price will still following a trend of increase. Therefore, the fuel-efficient model cars will occupy an important competitive spot; also it will attract more customers who have limited budget and don’t want to spend a lot on gas.

   Meanwhile, if the government can offer some preferential term to encourage people to buy local cars that will also strength the comparative advantage. For example, the government could macro-control over the car insurance price and offer certain price advantage for people who are buying local cars. Also, the U.S automakers should focus on the scientific development part and improve the quality of technical content. When considering about the product innovation, America always walks faster than any other countries as a leader in different areas.