The US recession (which led to a global recession) began in 1997 and had a significant impact on the US auto industry during the recession period. The U.S. auto industry is still reeling from the effects of the recession throughout the economic recovery period that continues today. According to Chu and Su, “in this credit-driven recession, one of the hardest hit sectors has been the automobile industry, as well as the real estate and financial markets. Chrysler and General Motors were pushed into bankruptcy; and 276,000 jobs in the automotive and parts industry were destroyed, or 36 percent of total employment in the sector. » This paper will focus on the future of the U.S. auto industry as the United States recovers from the worst recession we have seen in 75 years. I will provide information on the following topics relating to the American automobile industry:1. Externalities likely to shift the supply and demand curve over the next five years.2. Factors creating value in the industry and factors that will most likely contribute to demand in the future.3. Cost and supply analysis.4. Industry trends and factors changing the industry.5. Potential for movement in the supply and demand curve over the next 5 years.6. Market structure.7. Porter's analysis of the industry.8. Strategic considerations of General Motors using the concept of game theory. Market Externalities To properly illustrate the externalities that could shift the supply and demand curve in the U.S. auto market over the next five years, it is necessary to examine recent events that have affected the U.S. auto industry over the next five years. recession and the progress U.S. automakers have made in recovering from a near-devastating situation...... middle of paper ...... If the U.S. auto manufacturing sector experiences a downturn, the economy American will be negatively affected and demand The situation of the automobile sector in the United States will suffer. If GM or other U.S. automakers go bankrupt, greater opportunities will open up for new entrants into the U.S. auto sales industry. For these reasons, all manufacturers, including GM, that sell automobiles in the United States should continue to use a cooperative game theory strategy to ensure the industry's recovery. GM should continue to use its technological advantages to create innovative automobiles, but do so with caution. GM should follow the lead of today's environmentally conscious consumers who want cheaper, more economical automobiles. GM should primarily use a cooperative game theory approach in its sales and marketing strategies in order to stay in tune with the current needs of the automobile industry..