Asian Automakers Strategy on Targeting Generation Y

Several factors have affected how the American auto industry now positions itself on the world market, and big changes have been made to reflect this new direction. The introduction of new technologies in vehicles, the growing market for cars in new developing markets, the impact of the industry on the environment, legislative responses and demands, as well as the increased expectations from consumers, are some of the factors. More international cars are being designed, manufactured and bought by American consumers and exported to foreign markets today than those exclusively manufactured by American companies, redefining the American auto industry, while having a positive impact on its economy. International brands accounted for 45% of total sales in the U.S. in 2013 and have now risen to 59% of the market, and continue to grow. While the amount of American cars has decreased in the local U.S. market share to international ones, the increase of foreign car production on U.S. soil has had the effect of creating new jobs for Americans both in the auto industry as well as in related new industries. The industry has seen huge growth numbers in the last few years with more growth expected.

In terms of market size, the largest market is in the United States which has remained one of the leading automotive markets in the world. However, GM also sells a good number of its vehicles in China, Canada, United Kingdom, and Germany. In the early years of development of the automotive industry, most auto manufacturers came up with Financial Services which

A recent article posted on www.driving.ca, (LeBlanc, 2016), showed that of the top ten selling vehicles in the world for 2015, only three were American. Those three vehicles were the Ford F-Series (3rd place with 920,172 sold), the Ford Focus (4th place, with 826,221 sold), and the Chevrolet Silverado (9th place with 669,683 vehicles sold). As Hanne Keiling pointed out in her article on www.zebra.com (Keiling,2015), part of the challenge American car manufacturers face is a perception of

The American automotive industry began in the 1890’s. It evolved into the largest industry in the world as a result of the size of its domestic market and mass production.the American auto industry began with hundreds of manufacturers, but by the end of the 1920’s it was dominated by three large companies, General Motors, ford and Chrysler. By the end of the Great Depression and world war 2 these companies prospered making the U.S the country which provided three quarters of the worlds vehicle . They however did not remain number one, Japan overtook the market in the 1980s and China in 2008., making the U.S second in the world. The impact of the global market caused the American auto industry to suffer considerably. Japan and China were producing more vehicles at cheaper prices. Labor cost were cheaper therefore companies took their factories to these countries. In 2008 the American auto industry was on the brink of collapse . Access to credit for loans decreased and sales plunged by 40 percent. Chrysler and GM both sort

In the previous couple of years, purchasers have requested an ever increasing number of autos that are reasonable as well as fuel-proficient. This ascent popular is because of the changing variables in the essence of the purchasers, the ascent in populace, the rising salary, the ascent in costs of substitutes, and the drop in the costs of supplement items and administrations. Honda and Toyota have both made a significant entirety of cash by exploiting the chance of these ascents sought after.

As cited by the Bureau of Labour Statistics, ‘the automotive industry includes industries associated with the production, wholesaling, retailing & maintenance of motor vehicles’. This industry has had an immense impact on the domestic industry. Nevertheless, with the 2007- 2008 recession, new car sales decreased rapidly reflecting the overall decrease in consumer spending. Thereafter with the aid of government, in early February, 2012 the American Automotive Industry made a brisk recovery, making American automotive companies reign as the biggest & most profitable & it incrementally grew year after year.

Global COMPETITION in the industry: Global competition has expended in the auto industry because of an increase in global trade. This has resulted in the decline of sales in the American auto industry whilst sales in the Asian industry especially China has increased. In 2009 sales in the U.S. hit their lowest point meanwhile, it doubled in Asia generally, especially in China. (loc.gov. 2014). One of the reason for this decline in the American Auto sales is because the Japanese automakers have altered the U.S. manufacturing models and are selling it in the global market at a less expensive rate. The price and innovation is attracting a lot of customers’ to this part of the world leaving the American industry to suffer.

The auto industry has faced many challenges in the past years. The competition is now stronger than ever, all car manufacturers have been competing to be the number 1 in the market. At the same time, the growing concern of Global Warming has force the industry to reinvent itself and find ways to be more sustainable. Equally important, is the yearly advances in innovation that had made it harder to keep new vehicles up-to-date on the latest technology. For all this reasons, the car industry struggles to maintain customer satisfaction. In this essay, I will touch each one of the points on the challenges facing the American auto industry.

International automakers’ share of U.S. vehicle sales continues to rise, now accounting for more than 59 percent of total industry sales. Last year’s sales increased by 29 percent, which reached 7.5 million vehicles. (Global Automakers, 2015).

The marketing team had the task to decide the customer segment which they wanted to target. Whether they would like to go with Baby Boomers or whether they would like to with young generation. If the Company was to target the Baby Boomers segment with a value proposition of ‘indulging in nostalgia' then the problem faced was that the recent trend shows that these baby boomers were changing preference to larger cars and also the company had changed its strategy of

By the turn of the century hundred of small companies were producing automobiles both in Europe and in America. By 2004, the industry was in different stages of its life cycle in different parts of the world. The US industry entered a period of rapid growth during 1910-28, and reached its peak of production in 1965. In the two decades up to 2004, car production was on a downward trend, but if trucks were included, output was broadly stable (see table 4.2). In Europe and Japan too, total production was showing a declining trend The problem of market saturation was exacerbated by the tendency for cars to last longer(see table 4.3). [Tables 4.2 and 4.3 about here] As a result, the automobile producers have looked increasingly to the newly industrializing countries for market opportunities. During the 1980s and 1990s countries such as Korea, Malaysia, Taiwan, Thailand, Turkey, Brazil, and Argentina offered the best growth prospects. As these markets became increasingly saturated, so China, India, and the former Soviet Union were seen as the ““next wave”” of attractive markets. With the opening of many of these countries to trade and direct investment, the world production of cars and trucks s continued to grow (see table 4.4 ). [Table 4.4 about here]

Firstly, the automobile industry of USA is facing an intense global competition. Beside some American brands of automobiles such as Ford, General Motors (GM), there are other foreign brands which are proving their positions in the automobile

Competition in the automobile industries is very high, because there are many firms in this industry which offer many choices. One key factor of the challenging automotive industry has been globalization. Globalization has increased cost burdens on the industry by growing competition between international and domestic manufacturers. Each firm is trying to do its best to exploit their competitive advantage and create niches to differentiate themselves from the other companies. Toyota, Ford, General Motors

Expansion in global automotive production is about +4% per year in 2014 and 2015,with an mainly increase in production in China, India, and Mexico at the expense of Europe. Production is even expected to exceed 100 million vehicles by 2017. Cheap labour cost is a key factor not only for production but also for all of the functions for R&D and product development. Increasing production volume . Chinese manufacturers invest 2% of their sales in R&D.

Late accentuation on worldwide environmental change is expanding weight on automotive executives to make the right decisions in many areas to settle on the right choices in numerous zones, including R&D and assembling. Shiv industry is the automotive parts industry face challenges from the lower end competition comes from the unorganized sector and the higher end of technology competition comes from more evolved industries in the current Indian scenario. Indeed, discharge level targets, presently being referred to, undermine to change the whole structure of the car business. These difficulties hit an industry effectively tormented with high expenses, low profit margins, and accelerating competition. In the interim, numerous others are experiencing some type of rebuilding. General macroeconomic and budgetary circumstances are not so much positive, either. The expense of vitality and crude materials keeps on expanding because of rising worldwide interest. Solid vacillations in return and interest rates posture another test and are troublesome and excessive against which to support. In this dynamic business environment, a predominant supply chain is one basic component to helping automakers separate themselves from the opposition. Actually, a number of patterns in the car business are strengthening the need to reclassify supply chain techniques, designs,