...The Auto Industry For most of the twentieth century, the American automobile manufacturing industry was the most productive in the world. Over the past 20 years, however, the American industry has lost its comparative advantage. The state of the economy and the recession the country is experiencing is making it difficult for any industry to turn a sound profit. The auto industry is feeling the squeeze. The “Big Three” auto makers in the United States and Canada consist of, General Motors (GM), Ford and Chrysler. These companies are competing during these hard economic times and faced with competition from foreign manufactures as well. This paper will analyze the changes implemented in the auto industry, and the problems addressed by the leadership. It will identify new changes the company will implement for their organization to remain competitive within the industry and assess the effectiveness of the changes already implemented and the potential benefit of the new changes. The Big Three reigned as the largest in the world and two of these corporations are still the backbone of the top five. Ford has held the position of second-ranked automaker for the past 56 years, but the state of the economy has affected it powerful edge and responsible for their decent to third in North American sales, and passed by Toyota in 2007. That year, Toyota produced more vehicles than GM, however GM still outsold Toyota that year, holding fast to a consecutive 77 calendar years of...
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...The automobile and parts industry of Pakistan is dynamic industry which is driven by consumer choice, comfort, safety and design. This industry comprises of two and three wheelers manufacturers and assemblers of motorcycles, motorcars and other light commercial vehicles. The automobile and parts sector of Pakistan is one of the highly traded sectors in the Karachi stock exchange with a turnover of Rs.12, 631,750 (in 10th October 2014). Pakistan’s automobile and parts sector came into existence sometime around 1953 when national motors limited established a plant in Karachi to manufacture Bedford trucks which was the first output to be produced from this industry and since then buses, cars, and motorcycles have been added to the portfolio of this industry. The industry is comprised of several large and medium sized companies however the majority of sales in the industry comes from the three major players Pak Suzuki Motors Co Ltd, Honda Atlas Motors and Toyota Indus Motors. The current investment in this industry accounts for Rs 92 billion and contributes to 2.8% of the country’s gdp. The industry is a host to providing employment to 3.5 million people and is also playing a vital role in establishing a significant vendor industry. The automobile and parts industry of Pakistan was a star performing industry during 2000 to 2005 but bad governance and infrastructure frailties have caused the growth of this sector to decline and has lead this industry into all sorts of trouble. The...
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...in the Business Environment Facing the American Auto Industry The American auto industry has faced many challenges throughout the years since Henry Ford’s first Model T rolled off the production line in 1908. From an initial reluctance on the part of the public, as noted in The Evolution from Horse to Automobile: A Comparative International Study (Chiu, 2008) to more recent challenges such as the repeated oil crises and competition from foreign manufacturers, the automobile industry has had many ups and downs. However, the current business environment may be bringing a challenge that will change the face of the auto industry as we now know it world-wide. For the many decades car ownership has been a given in the United States, as...
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...12/12/2013 International Business Environment Assen Spassov | Automotive Industry in Germany | Automotive Industry in Germany | Germany’s balance of payments in 2012 Amid a challenging external environment, Germany’s current account surplus grew distinctly in 2012 to 7% of gross domestic product (GDP), which was only slightly below its previous record high in 2007. On the export side, this rise was attributable to the German economy’s ability to hold its own in markets outside Europe despite the significant slowdown in the pace of growth in 2012. This is partially due to the attractive product range offered by German exporters, although the euro’s lower external value also played a role during the period under review. Germany’s strong export performance vis-à-vis non-euro-area countries greatly outweighed the weak demand that its enterprises faced in the euro area. The import side, too, contributed considerably to widening the current account surplus. In particular, the uncertainties emanating from the crisis in the euro area prompted German firms to hold back on their domestic investment, which adversely affected imports. While noticeable progress has been made in terms of correcting the current account imbalances within Europe, the 2012 surplus underlines the fact that, owing to the greater uncertainty it has engendered, the crisis has also hampered efforts to reduce the overall German current account surplus. The increased desire...
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...3.5 STRUCTURE OF INDIAN AUTO COMPONENT INDUSTRY Most of the auto component manufacturers are distributed in the north, south, and, western parts of India around major Automotive Vehicle Manufacturers (AVMs). The AVMs contribute largely towards the development of component suppliers through technical and or financial collaborations. These are however, concentrated in some pockets such as Chennai and Bangalore in the south, Pune in the west, the National Capital Region (NCR, which includes New Delhi and its suburban districts) in the north, Jamshedpur and Kolkata in the east and Pithampur in the central region. Following global trends, the Indian automotive sector also has most auto suppliers located close to the manufacturing locations of OEMs, forming regional automotive clusters. Broadly, the three main clusters are centred around Chennai, Pune and the NCR. The Indian automotive component industry is highly fragmented. There are nearly 6,400 players in the sector, of which only about 6 per cent are organised and the remaining 94 per cent are small-scale, unorganized players. In terms of value added, however, the organised players account for nearly 77 percent of the output in the sector. The auto ancillary industry caters to three broad categories of the market: 1) Original equipment manufacturers (OEM) or vehicle manufacturers, that comprises of 25% total demand 2) Replacement market, that comprises 65% of the total demand 3) Export Market, that comprises primarily...
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...Auto Component Industry in India: Growing Capabilities & Strengths Agenda • India: A Vibrant Economy • Automotive Industry in India • Auto Component Industry in India • Policy Environment • Capabilities & Challenges • The Way Forward • About ACMA 2 India: A Vibrant Economy 3 India: A Vibrant Economy 1. Largest Democracy – 1.2 billion people, Growing Middle Class 2. 4th largest GDP (PPP) and 10th largest GDP (Nominal, USD 1.8 trillion) 3. One of the fastest growing economies • • India’s average GDP growth rate: 8.4% over past 5 years Expected to outpace China in the next decade 4. 3rd Largest Investor base in the World 5. Robust Legal and Banking Infrastructure 6. Demographics Advantage – Youth driven economy 7. Suburbanization & Rural to Urban Migration – 140 million by 2020; 700 million by 2050 8. 2nd largest pool of Certified Professionals and highest number of Qualified Engineers in the world 9. Investment in Infrastructure 4 Automotive Industry in India 5 Automotive Clusters in India Eicher Escorts Hero Moto Corp Honda Motorcycle Honda SIELCars ICML JCB Maruti Suzuki New Holland Mahindra Suzuki Motorcycles Swaraj Mazda Tata Motors Yamaha North *New Hub: Sanand Tata Motors, Maruti, Ford India, Hindustan Motors Tata Motors East West Bajaj Auto Fiat Force Motors GM John Deere Mahindra Mahindra Navistar Man Force Mercedes Benz PSA Skoda Tata Hitachi Tata Motors Volkswagen Volvo Eicher Ashok Leyland BMW Caterpillar South Daimler...
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...changed the structure and location of the U.S. motor vehicle industry. Whatever changes are occurring globally or within the domestic market, production and sales in the U.S. remain at historically higher levels. Gross output in the U.S. automotive manufacturing sector in 2004, including motor vehicle parts, trailers, bodies, and heavy trucks was $424 billion. That was the largest output of any durable goods manufactured product measured by the Commerce Department Bureau of Economic Analysis (BEA). Real output has increased 55% since 190, compared to 35% for manufacturing as a whole. The industry has expanded from just over $100 billion per year in the late 1970s to nearly $500 billion in 1999, which is still the all time peak. Gross output declined in 2000-01, rose to $436 billion in 2002, but fell slightly to $425 billion in 2004. Gross output includes the value of intermediate inputs as well as that of the final assembly process. The automotive industry includes those industries associated with the production, wholesaling, retailing, and maintenance of motor vehicles. The average hourly income for the automotive industry varies depending on which industry you are dealing with varies. In the manufacturing industry the annual average for 2010 was $22 an hour. Today there has been little change in that rate. In a 12 month period there has only been about a twelve cent difference in that rate. The industry has not changed much; in fact some salaries have only changed...
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...Six Forces Analysis Industry Definition For purposes of this analysis the US auto industry includes competitors, buyers, suppliers and stakeholders. Competitors are defined as automobile manufacturers that sell new, light vehicles which consist of cars, trucks, sport utility vehicles and cross-overs. Buyers are defined as consumers, including firms that make bulk purchases (delivery, taxi or rental car companies). Suppliers are defined as vendors of raw materials (metals) and other differentiated parts (electronics or other automotive parts). Stakeholders are defined as US government agencies. Market values and units sold are year to date references for the third quarter ended 2010 that have been calculated by Dow Jones & Co., Inc. and obtained through the Wall Street Journal. Introduction The US automobile industry has suffered greatly due to financial difficulty in the recent years. Increasing unemployment (U.S. Bureau of Labor Statistics) has left consumers cost sensitive and demand for new auto sales has declined significantly over the past few years. Consequently, some manufacturers and suppliers have filed bankruptcy and others have had to restructure to remain in business. There are a few manufacturing firms that dominate the industry and entrance barriers are high. Additionally, high overhead costs create exit barriers. As a result, automobile manufacturers and suppliers will continue their efforts to maintain their share of the market and this analysis will prove...
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...Automobile Sustainability Report Executive Summary In our report we discuss the various methods that today’s three major automakers are using to provide their customers with up to date, state of the art products. By implementing numerous breakthrough technologies into their production systems automakers are continuously working towards a more sustainable and environmentally friendly production process. Throughout our report we highlight major breakthroughs throughout the industry and how they have affected each individual company. By turning their attention to a more lean production process there have been many positive changes to help eliminate waste and reduce the cost of production. These companies are making conscious efforts to not only reduce the amount of waste produced throughout their systems but also how to reuse or recycle the waste that cannot be prevented. For example we talk about how Toyota has developed automated robotics systems to help control the amount of paint that is used during their topcoat operations to prevent the use of excess paint which is normally due to human error, another example is how they are using the paint sludge in the production of other products such as anti-rust paint sprays. We also discuss how the use of returnable metal shipping containers when shipping parts can greatly reduce the amount of wasted packaging materials and wooden creates from going to the landfills every year. All of these small changes have a large impact when...
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...Outsourcing and its Effects on the Automotive Industry Abstract This paper will explain the history, current issues and future issues of outsourcing and its effects upon the automotive industry. Outsourcing has become a huge topic in recent years as our economy has begun to struggle. However as our automotive companies become more strained with increased wage expenses, shorter product life cycles and a higher cost of capital outsourcing is being utilized according to Parry and Roehrich (2009). Outsourcing can help to solve many of these problems by bringing wages down and bringing more resources and expertise in. This will help to soften the blow of these increasingly tough economic times. In order to do this they will have to reduce their on-site functions. Although as more and more core functions are being outsourced, the companies are at a larger risk of becoming “hollow”. Our essay will explore the history so that we can learn from our past mistakes and apply what we learn into the issues that we are facing currently and will face in the future. What exactly is outsourcing? Well Ledford (2006) describes that outsourcing is often used to describe situations where corporations move part of their operations out of the country. However these companies can also subcontract with in the same country and this would still be outsourcing. Now off shoring is a type of outsourcing which relocates business processes to another country in the hopes of keeping as much as...
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...Indian Auto Industry The Indian Auto Industry faired brilliantly in the year 2010 and 2011 so far. We can easily pass the statement that the industry is on a boom currently. After a rough late 2008 and early 2009, the industry has grown with a CAGR of nearly 25% since then. At this rate, the Indian auto market is expected to become the third largest in the world only after US and China. While Japan is also vying for this rank, but Indian auto market with its current growth rate will overtake it sooner or later. Global consultants Booz and Co. in a report has predicted the Indian passenger vehicle market to grow at a rate of 15-20% and auto exports to grow at 8% for the next few years. New production techniques, product innovation, effective after sales service, new plants, enhanced R&D, strengthen distribution network and supply chain etc. To pave the way for future growth, the Indian auto companies will have to evaluate M&A decisions as well. Deals like TATA-Jaguar have already made international mergers a viable option. Therefore, Indian Auto Industry is an important industry for the purpose of this paper’s study. Limitations:- 1) For the study, only top 10 companies from an industry has been selected and not all the companies. Therefore, the results might be affected from downward bias. 2) The researchers were not experts in the industry they were studying. 3) The researchers were not expert in the software used for the purpose of this study and relied heavily on...
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...INDIAN AUTO INDUSTRY …. the way forward Presentation bySunil Kakkar General Manager (SupplyChain) Maruti Suzuki India Ltd Indian auto industry : Among the top 10 in world Two Wheelers Small Cars Commercial Vehicles 2nd 3rd 5th Automobile Industry – A Global Hub • • • • • 15 manufacturers of passenger cars and multi-utility vehicles, 9 manufacturers of commercial vehicles, 16 manufacturers two/ three wheelers, 14 manufacturers tractors, 5 manufacturers of engines. Key drivers for the growth of Indian Auto industry Finance Availability Poor public transport system Improved Infrastructure Low car penetration Key drivers Rising Family Income Exchange of Cars Favorable duty structure Changing lifestyle Impact of infrastructure 2 key projects of strategic importance for India NHDP project: • Largest highway development project • Golden quadrilateral - Connects 4 metros • NSEW project – Connecting North, South & East, West lengths of India Rapid Urbanization Urban Percentage of Total Population Rising GDP per Capita Per Capita GDP (US $) 2010 2011 2012 2013 2014 2015 Accelerated overall growth of other industrial segments …..a key enabler to fuel auto demand Indian Pockets growing Deeper Annual Income (INR) Number of Households in 2010(million) Expected Households in 2015 (million) More than1000000 1.2 3.3 500000-1000000 2.4 5.5 200000-500000 ...
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...automobile industry Bing Bai St. Thomas University Feb 20, 2013 Author Note Bing Bai, Department of Business, St. Thomas University This research was supported in part by a grant from the BUS 673 management writing & reporting class. Correspondence concerning this article should be addressed to Bing Bai, Department of Business, St. Thomas University, 16401 NW 37th Avenue, Miami Gardens, FL 33054 Contact: b0771276@stu.edu Introduction 2009, by the impact of the economic downturn in North America, the auto market is also showing a downward trend, the U.S. auto market, sales reached bottom in recent years, a decline of more than 20%. With the slow recovery of the economy in North America, as well as various stimulus policies play a role, so that the downward trend in remission. In 2010, total sales of U.S. automotive (car, SUV, MPV, pickup truck) reached 11,590,274, an increase of 11% year-on-year, U.S. vehicle sales remained year-on-year growth of 11% in January-July 2011. Undergo the shrinking of automobile market, although the United States rely on to curb the momentum of a sharp decline in the automotive market policy factors to a certain extent, the government "TM" subsidies just one pin short-term cardiac and unable to drive the stable recovery of the automotive market. The decline of the Big Three, but also to the global automotive industry, the...
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...Auto Industry’s Impact on Households The automotive industry is an essential piece to the economy of the United States. Currently, there are about 850,000 manufacturing workers and 1.8 million auto dealership workers that are employed in the automotive industry today (Amadeo). This industry was and continues to be negatively impacted by the recession that has plagued our nation’s economy since 2008. Unemployment has been one of the biggest issues in the auto industry, along with the negative impact on the government and firms in the United States. Therefore, I will focus on how households have been impacted by the auto industry recession. This will include how unemployment affects households, why the auto industry needed to be bailed out and what areas of households have been hurt the most by the unemployment. A massive amount of job cuts in the American automotive industry was the result of a devastating recession that the United States began to face in 2008. Job loss results in immediate problems for workers and in turn, the household that worker lives in. When a worker loses their job, the entire family of that worker is affected because now that family cannot live the way it is used to living with steady income. This was a problem that 174,192 workers had to come up with a solution to, because that is how many jobs were cut in the 2009 automotive industry (Challenger, Gray and Christmas 2). The unemployment rate has risen from 7% in 2007 to over 25% in the automotive...
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...Shifting Gears in the Auto Industry Question One Prior to taking over Chrysler, Fiat was an international business – exporting cars out of Italy to other countries and engaging in joint ventures around the world, including an extremely unprofitable partnership with GM in 2005. The brand had a negative reputation in the United States, and it was senseless for the brand to invest resources in the American car market. By 2006, however, Fiat was turning a profit, and in 2009, the company was named one of Fortune magazine’s most admired companies and became Europe’s third-largest car company and the ninth largest in the world. As Fiat experienced this massive success, transforming into a true multinational business became a viable option. Purchasing the struggling Chrysler brand was a logical way for Fiat to truly become a part of the American automobile market and become a multinational company. Instead of merely exporting cars to the US or entering a joint venture with a US automobile maker, Fiat is able to have full operations in the United States using Chrysler’s existing resources. The merger was practical for both brands, as Chrysler desperately needed resources, and by buying out Chrysler, Fiat gained access to Chrysler’s network of distribution channels in the United States and the brand recognition of Chrysler. As a multinational business, Fiat will still be able to adapt product offerings and strategy for each country, but will have better access to the markets of each...
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