Car Industry Economic Analysis

While car manufacturing is a global industry, automotive companies such as JLR operate in broader regions such as Europe and Asia. Three major trends were identified affecting car production in mature markets, the first was the fragmentation of mature markets, customers were demanding more choice, and this has made it difficult for manufacturers to obtain economies of scale, so cost had to be reduced and with the general

The automotive industry designs, develops, manufactures, markets and sells motor vehicles, and is one of the world’s most important economic divisions by profits. This analysis focuses on the industry, specifically, manufacturers of automobiles. There are five competitors in the StratSim environment: Firm A, B, C, D, and E. Industry sales in the most recent year were 4.3 million units, with expected growth in the next year. Within this industry, there are seven-vehicle classes: Economy, Family, Luxury, Sports, Minivan, Truck, and Utility. There are two new classes with potential – if properly marketed.

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 American automotive industry provides a unique and very important role in the economy of the United States of America. Not only in the United States but even around the world, the American Auto Industry is a leader in job creation, production, exportation and even in research and development. In the mid-20th century, America’s top auto manufactures have been General Motors, Ford and Chrysler. They were producing two-thirds of all the cars and vehicles sold around the world. There are still other smaller car manufacturers such as Anteras, Avanti, Shelby American, De Lorean, Dragon and several others. As of 2010 the auto industry contributed to about 4% of the United States Gross Domestic Profit and employed about 8 million jobs.

As a consequence of the closing of the motor vehicle manufacturing plants and the pressure and ongoing adjustments on the supply chain, it has been calculated that up to 40. 000 people will possibly lose their jobs. It is imminent that job losses will be ongoing over several years.

A report by the Automotive News (2014) said that “the tight race for market share is ‘the new normal’ for the U.S. automotive market, and the battle for market share among the largest eight automakers in the U.S. is great now as the range between them continues to narrow”. It said General Motors and Ford Motor Co. have continued to occupy the top two positions over the last 14 years, but their lead has narrowed significantly as Toyota moved into the 3rd position ahead of Chrysler, now called FCA US.

automobile industry has had many ups and downs. However, the current business environment may be

Another issue for the American market is the luxury vehicle market. The reason for this is

The Primary objective of this research was to know the market share of Skoda cars

One of the problems faced by Malaysian Automotive Industry is reputation. For many years Proton car is always being branded as a cheap and below par car manufacturer. Due to this unwanted reputation, consumers are sceptical about Malaysian cars where it does not guarantee any assurance. Since Proton was formed in 1985, Proton managed to breakthrough in domestic and international market as an affordable car. But over the years, Proton has compete aggressively with other automotive manufacturers due to localization of many foreign manufacturers in Malaysia. Due to the localization, foreign cars has been in the market in lower prices. This makes Proton as a car that does not have resale value because the pricing of Malaysian cars depreciates rapidly each year.

Proton is now a market leader in the domestic market which make up to 70% of the market share of car sales in Malaysia. Proton recently has also developed their own engine, own

In 1890 the American auto industry bloomed in the United States leading to hundreds of manufactures. Come 1920’s there were three main auto manufactures known as the “big three” (2015, Wikipedia). Those three manufactures are Ford, General Motors and Chrysler. Global competition started to cut into the American auto market come the 1970s. The international auto market combined with oil prices and economic crisis continue to affect the American auto market. Overall the American auto industry has experienced steady and on occasion harsh drops in the US market while receiving some small gains, however, no gains have brought them back to the hay day they experienced between 1920s and 1950s.

A second point of consideration relating to the intensity of rivalry within the industry was the level of industry demand. “Demand declines when customers are leaving the marketplace or each customer is buying less” (Hill &Jones, 2012, p. 62). This was the case in 2009 in many developed nations due to the recession, which was marked by job loss, credit problems, and high gas prices that increased the demand for fuel-efficient vehicles or left consumers unable to purchase vehicles altogether. At the same time, growth was expanding in China and some other developing nations, which opened the doors for automobile companies in these countries to expand at home and