The Impact of the Euro on the Automobile Industry

Research Question

Has the formation of the European Union, its related regulations concerning the environment, and the use of the Euro as well as the high value of the Euro, affected car sales within EU countries and outside of EU countries for the European automakers that are part of the EU? Furthermore, how do the European automaker compare with those in the United States in term of profit and sales in recent years? If the European automakers have been weakened by new EU regulations or the use of the Euro, in what ways have they been affected?

Section 1 : Introduction

One of the most debated aspects of the EU in recent years has been the acceptance of the Euro. The Euro has further united many EU countries and has given them an ability to use an integrated monetary system that has tended to be exceptionally stable, valued highly, and liked by foreign investors. However, the value of the Euro has also been associated with its fair share of problems. For this research project, I am focusing on the automotive industry and how it has or possibly has not been affected by the Euro. It is known that a rising Euro can and does affect the prices of European goods in other countries. It is also known that a rising Euro can and does affect the prices of goods imported into the Euro area. However, little has been written about the affect on particular industries. In order to evaluate the automotive industry in regards to the Euro, I must also examine other EU aspects that may affect automotive sales and prices. Research has shown that stringent environmental regulations in the EU have affected the automotive industry. Therefore, my research will include these aspects that may also affect prices. Furthermore, regulations of sales, and mergers between automakers can and do affect prices. Finally, I will discuss price harmonization throughout EU countries and look at the differences among countries.