...community lives. Many people use the ethical values because it may help them act morally in a given situation, conform to the laws and do the right thing as presented. It is in relation of the moral decision making that the story of this car manufacturer recalls that people have to use their ethical values in measure to act as right as possible toward one to another in given circumstances. Utilitarianism in general could be defined as a moral principle that holds that the righteous or wrongness of an action could be determined by its usefulness of bringing the most happiness to the greatest number of people affected by the act. Also, the theory of utilitarianism values that the morality of an action is the one that maximizes utility. Many people use the moral principles of the utilitarian to respond in a given situation and do as right as possible. However, some people do not always use their morals values in some situations and tend to use to react on their self-interest or well-being. The story of the number one car manufacturer presents that in the society where we all live, people should use their morals values to make the right decisions and do the right thing for the safety of all. In reference to the theory of utilitarianism the car manufacturer has to make a choice on either leave the release of the Hipster with the major brake defeat that can cause deadly accidents or recalls the release and look further into the incidents. Therefore using...
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...Buyers- Medium/high Buyer's these days have so many choices when it comes to the automobile industry. Factors of buyer power include: quality (safety ratings), level of environmental impact from emissions (sustainability efforts of the company: gas efficiency, hybrid electric/gas cars), price, customer specific willingness to pay, physical appearance, family needs, social status impact, and if new or used. Every individual has different needs and wants due to their lifestyles, and there are endless options/packages from which to choose. However, cost can be the over-riding factor above other factors because the consumer earns low profits if any at all. Switching costs are small if any at all when switching between used cars, but new cars have slightly higher switching costs due to warranty and advertising costs. With so many choices, manufacturers are at the beck and call of consumers. If they do not meet the new standards of today's economical and environmentally conscious consumer, manufacturers will suffer greatly mainly due to the foreign car market like Honda and Toyota. Honda and Toyota can blend superior efficiency and quality with competitive pricing because it costs them less to make their cars. Foreign alternatives have forced American producers to keep up and offer similar products that consumers want at a similar price. Although consumers always have an alternative, their buying power is somewhat limited by the factor of negotiating power on price since discounts are...
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...Conference on Industrial Engineering and Operations Management Istanbul, Turkey, July 3 – 6, 2012 Car Recalls: A Problem Unique to Toyota or For All Car Makers? Kamrul Ahsan School of Management and Information Systems, Faculty of Business and Law Victoria University Australia Abstract Often automobile recalls are drawing media and public attention. Influenced by Toyota’s recent automobile recalls 2009-2010 this research conducts an empirical study on historical car recalls. The research uses secondary data from recall websites maintained by public and private organizations. For different car model year and manufacturer the study looks at frequency of recalls, recorded customer complaints, and yearly sales data. Analysis shows recalls are a common event with the majority of recalls initiated by only a few car makers. Though car makers use many eye catching and popular quality and customer care slogans and programs, many popular car makers still face valid customer complaints and consequently face many unwanted recalls. This study identifies that most recalls occur during the first five years of the car model year. This preliminary study of automobile recalls can be further extended at a later stage to identify key causes of recall. Keywords Product recalls, Reverse logistics, car recalls, product returns, closed loop supply chain 1. Introduction Though manufacturers use state-of-the-art operations philosophies, tools and techniques, it is difficult to make the perfect...
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...CASE STUDY ANALYSIS A-CHAPTER 5 (by Yagmur Pekoz) Question 1: Explain fully how auto manufacturers should choose among substitutable inputs and production processes. Discuss in detail and apply the related concepts. Answer 1: Both the demand and the unit price for steel have increased in recent years. Unfortunately, auto manufacturers use large quantity of steel in their production process. In order to compensate for the adverse effect of increased unit price of steel, auto manufacturers changed their output and pricing decisions to be profitable. Moreover, they started searching new overseas suppliers and cheaper raw materials, e.g. aluminum, to substitute steel in the production process. In addition, auto manufacturers intensified their search on new means and methods to utilize plastics, magnesium, and recyclable materials in their production process. All these new ideas aimed to make auto manufacturers more profitable. Generally, we can substitute one input with another, however, the case is not always as easier as it seems. As mentioned before, firms usually substitute one or more inputs with another to be profitable. The above idea of substitution can be demonstrated simply as Q = (S) ½ x A½ where S is steel and A is aluminum. This equation is called ‘production function’. According to this equation, for example, the same amount of auto parts (let us say 100 for the sake of argument) can be produced using either 100 pounds of steel (S=100) and 100 pounds of aluminum...
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...CAR TYRES | AN Industry Overview | This project looks at the Car Tyre industry in India and how the Distribution channel helps this industry to grow and serve the needs of the End consumer. | PROJECT DONE BY:VIKRAM FALOR : DM14157RAMYAA RAMESH : DM14266AMIT SHUKLA : DM14104 | Introduction:- The Indian Tyre Industry is a critical part of the Auto Sector and there is a huge interdependent on those of the Automobile players. The Indian tyre industry accounts for approximately 5.0% of the Global tyredemandgeneratingrevenuesofapproximately`30,000cr for FY2011. Out of which 90-95% has come from the domestic market. There are around 40 tyre manufacturers in India and the top 10 tyre player’s account for approximately 90-95% of the total tyre production in India. The growth in domestic tyre industry was negatively impacted by the global slowdown in2009.Nevertheless,the industry experienced are mark able recovery in 2010. This growth was primarily driven by strong revival in automobile demand on the back of improvement in macro economy and easing of interest rates. The Indian Tyre Industry produced 119.2 mn units of tyres (1.5mntonnes) in 2010‐11. On an average, In Indian early 60.0% of the production is for replacement market, followed by 25.0% sold to OEMs directly and the balance is exported. Globally, the OEM segment constitutes 30.0% of the tyre market, exports 10.0% and the balance from replacement market. Exports turnover for India during 2010‐11 stood at `3,600cr...
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...Thanh Nguyen Econ 335 Tuesday 7PM CWID 892948886 Failure of Trade Barriers in Vietnam Auto Industry Since the “Doi Moi” reforms in 1986, Vietnam continues to pursue a transition from a centrally planned economy into a more market-oriented one. Vietnam is a member of ASEAN Free Trade Agreement, APEC and Trans-Pacific Partnership. Vietnam also signed in the 2001 bilateral trade agreement with the US and became a member of the WTO in January of 2007. Regardless, Vietnam’s government is applying high import tariff in all commodity productions and in the auto industry in particular. As a result, Vietnam is one of the countries which have the highest price for automobiles in the world. It’s more than two time higher than in developed countries and about 1.5 times higher than other countries in the ASEAN area. Buying a car is a dream for many. The high taxes being imposed on automobiles would be cut sharply to stimulate the demand and attract the investment to the automobile manufacturing. In 1994, US President Bill Clinton ordered an end to the trade embargo on Vietnam. It remarked an important step in relationship between Vietnam and the US, and also was an incentive to develop Vietnam economy. Since 1990s, Vietnamese government has decided automobiles industry is a leading industry to develop other industries such as the chemical industry, mental and electronics. Following that a range of leading join venture manufactures set up such as Ford, Toyota, and...
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...This is an essay on the automotive industry. The writer is the Chief Executive of one of the car companies in the world and she will be looking at the car manufacturing industry to see how well the other companies are doing. She is going to be looking at things like their revenue, how much profit and losses they have made in the past years. Also the Chief Executive will be looking at the number of workers employed under the companies. The number of cars they produce and sell in a year will be analysed as well. She will also be looking at how much of the market share dose each company own. The Chief Executive will also be paying particular attention to how the concentration ratio has evolved over the years. All the information will then be put together so that the Chief Executive is able to propose a merger or takeover of one of the car companies to the company’s Executive Board in the upcoming meeting. Volkswagen Group is the third largest car manufacturing company in the world. It had a market share of 23.3 percent in Europe by the end of the year 2011. Its market share for the year 2010 in Europe was 21.3 percent. Volkswagen also controls about 20% of the Chinese market. The Volkswagen Group sold 3,167,068 cars in the year 2011 in Europe alone. They sold 2,938,515 in the year 2010 in Europe (European Traveller 2012). They sold over 8 million vehicles worldwide in the year 2011. The company experienced a 25.6 percent increase in sales revenue. Their sales revenue came...
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... The car industry is a very powerful industry worldwide. Though it has faced many challenges through the decades, car manufacturers have managed to create strategies needed to keep their firms afloat. This report will touch on the different forces that affect the industry and what manufacturers have done to counter them. The most interesting factor about the global automobile industry in the last decade is that the economic challenges that it faced were not even caused by the industry itself. The housing market crash of 2008 and the recession that U.S. went under during this time was what affected the automobile market the most, decreasing sales and creating billions of dollars in losses that had not been seen since the 60’s. Even the biggest manufacturers that we never thought would fail like GM and Chrysler faced bankruptcy and received government aid to survive the recession. The case illustrates the affects and reactions that took place in the automobile industry for its survival against bankruptcy. Although the housing market is different from the automobile industry, it took the automobile industry on the same downward spiral. Threats of New Entrants The threats of new entrants are relatively low in the automobile industry. Not many companies start a brand new car line from scratch. However, many existing companies create new car lines that target a brand new segment or buy another company and profit from their production in that particular segment. Car manufacturing...
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...Block exemptions; Concerted practices; EC law; Motor industry; Vertical agreements The motor vehicle sector, in particular the distribution of passenger cars, commercial vehicles, spare parts and repair services, is subject to a specific block exemption, Regulation 1400/2002 (the motor vehicle block exemption), which is due to expire on May 31, 2010.1 Following a review launched in mid-2007, the European Commission (the Commission) adopted a Communication on July 22, 2009 to set out the basic policy orientations for the future legal framework that should apply to motor vehicle distribution and aftersales services agreements after the expiry of the motor vehicle block exemption. Currently, the motor vehicle sector is subject to a specific competition law regime which deviates from the general rules applicable to supply and distribution agreements. In particular, the motor vehicle block exemption provides for rules that are stricter than those provided in the general vertical block exemption, Regulation 2790/1999 (the vertical block exemption.2 Such stricter rules grant an increased protection for distributors and repairers in the motor vehicle sector. Overall, the Commission proposes to scale back specific competition rules in the motor vehicle sector and intends to subject most of the motor vehicle sector to the general competition regime. The Commission proposes in particular that the general...
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...options in light of contracting sales and no sign of improvement in future. Established in 1958 in Port Melbourne, Australia (Toyota Australia n.d.), Toyota became very successful locally and started to look for opportunities overseas. It made its first shipment abroad in 1986. By 2011, Toyota became the largest exporter of manufactured automobiles in Australia, exporting 73% of vehicles overseas. However, in 2013, as GM-Holden, a competing Australian vehicle manufacturer, announced complete shutdown of its operations by 2017, Toyota was facing existential threats both at home and abroad. In 2013, there were only three vehicle manufacturers in Australia. However, Toyota’s main competitors were not the Australian, but overseas car producers. Starting in 2005, Australia embarked on signing the Free Trade Agreements (FTA) with Thailand, the ASEAN counties, and New Zealand (Australian Trade Commission n.d.), as a result exposing local manufacturers to significant competition. Increased competition from the overseas car manufacturers eroded the revenues of all local producers. Toyota also had to reduce its production volume and operate at an unprofitably low capacity utilisation rate. In an effort to improve its competitiveness in 2012, Toyota launched a Toyota Australia Future Business Transformation, a cost-cutting programme (Toyota Australia 2012). According the case study, this programme targeted the key perceived issue – high labour cost, through reduction of the headcount, overtime...
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...for an entrant to enter into a car industry because of the brand loyalty of customers. However, some of the well known foreign companies entered into US car industry easily, for instance, when Honda Motor, Co. opened its first office in Ohio, the major competitions began. The expansion of the foreign entrants decreases the market of American companies. Bargaining Power of Suppliers: LOW Suppliers have a little power in an automobile industry. That’s because numerous suppliers rely on some particular auto manufacturers to buy their products. Each manufacturer has many suppliers. For example, Toyota has more than 10 different suppliers in US. The main qualifications of the suppliers are the quality, cost, and delivery of the products. If suppliers can’t meet those basic considerations, it is hard for them to survive. Bargaining Power of Customers: HIGH There are various brands and models of the cars to choose from nowadays. The factors that affect consumer to make a buying decision are: the appearance, quality, price, and environmental effect. People always want a new and nice looking car. For those rich people who love cars, they always purchase the new released and attractive model. Besides that, the quality of the car is an important issue. The car has to efficient, which means saving gas, protecting our safety, and running fast. In addition, since there are many competitors, consumer have more choices to select a cheaper, but good quality car. Moreover, because of the global...
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...costs result in an increase in the cost of commodities making them undesirable to customers. Delays in payment also make it difficult for the company to replenish its stock. Outline 1. Executive Summary 2. Introduction 3. Literature Review a) An Overview of the Emirates Motor Company’s Import Business b) History of Importation of Mercedes Benz Automobiles from Germany to the UAE c) External Analysis of the World Automobile Industry d) External Analysis of the Trade between the UAE and Germany in Automobiles e) Internal Analysis of the Emirates Motor Company (EMC) 4. Methodology 5. Results 6. Discussion Challenges Facing Mercedes Benz UAE in the Export of Cars to Iran Introduction Mercedes Benz is a Germany based manufacturer of automobiles. It is a division of Daimler AG. Mercedes Benz as a brand engages in the manufacture of a wide variety of automobiles which range from...
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...first six months of 2010. In 2010, demand patterns are likely to change for the Turkish automotive sector. Considering the first half of 2010, the total production reached 547,022 vehicles, a jump of 39 percent compared with the same period of 2009. Also exports and imports increased by 4.5 percent and 43.8 percent respectively.2 As the effects of the global financial crisis recede, it is expected that the Turkish automotive sector will reach average annual growth rates of 4.5-5 percent per year in 2011 and follow this trend through till 2013. There are 22 automotive manufacturers in Turkey. The total capacity of the OSD members (15 manufacturers including two tractor manufacturers) amounted to 1,561,155 vehicles in 2010.18 The capacity seemed to stay stable for the first six months of 2010 and the capacity utilization was 72 percent. Most Turkish manufacturers have established joint-ventures with foreign car makers. There are 15 international players in the automotive sector which are; BMW Group, DAF Trucks , Daimler, FIAT Group, Ford, General Motors, Jaguar, Land Rover, MAN, Porsche, Peugeot, Citroën, Renault, Scania, Toyota, Volkswagen and Volvo...
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...Corporate strategies for Tesla 1. Open patents As an electric car pioneer, Tesla had always playing a traditional IP game, holding more than 1,400 patents. However, on June 12, 2014, Tesla CEO Elon musk surprised all by releasing its patents and said that the company would not challenge infringements on most of its patents (Musk, 2014). Some say that this particular strategic move of Tesla will make the company suffer in the end since all its competitors could get access to its IP. But Elon Musk thinks different in his announcement by saying that instead of the small trickle of non-Tesla electric cars being produced, the true competition is the enormous flood of gasoline cars pouring out of the world’s factories everyday. The whole electric car industry and the world would benefit from a common, rapid-evolving technology platform (Musk, 2014). We perceived this strategy to be really effective and try to analyze impacts of this move on both the EV industry as a whole and on Tesla itself. * Creating affordable mass market of electric vehicles. By opening its patents, not only some small or medium-size car manufacturers but also some high-end premium car manufacturers like Mercedes could use Tesla’s technology to build EVs thus enlarge the EV market. Also that makes Tesla technology becomes a standard and most companies producing electric vehicles will dependent on Tesla’s improvement. * Promoting standardization. Tesla could set the industry standard...
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...1. Explain fully how auto manufacturers should choose among substitutable inputs and production processes. Discuss in detail and apply the related concepts According to the textbook, the production process is the process used by an organizations to produce a good. It begins with the production function, which is a descriptive relation that links inputs with output. It (production function) specifies the maximum feasible output that can be produced for given amounts of inputs. Production functions are determined by the available technology and can be expressed mathematically. (Chap. 5, pg. 143) For instance, an automobile supplier is able to use inputs such as steel, aluminum, plastics, and labor into finished goods (auto parts). There the production function is expressed as Q = f (x1, x2, … xn), where Q is the quantity produced and produced and x1, x2, … xn are the various inputs used in the production process. Two aspects of the production process are returns to scale and returns to a factor. Returns to scale is the term that refers to the relation between output and the proportional variation of all taken together. There are three types of returns to scale; constant, increasing, and decreasing. With constant returns to scale, a 1 percent change in all inputs results in a 1 percent change in output. (Chap. 5, pg. 144) In other words, the relationship (change) between input and output is constant. With increasing returns to scale, a 1 percent change in all inputs results...
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