Premium Essay

Automotive Industry Standards

In: Other Topics

Submitted By Anjreu
Words 2272
Pages 10
The problem to be investigated in this study is the economic importance of the automotive industry. It will explore the social impact it has brought worldwide and how it is affecting the world of commerce. It will also explain the foreign trade and the different automotive industries of each country. The following sub-questions will be evaluated: * What pollution-control strategies each automotive industry are practicing? * What are the latest in automobile safety measures? * How does motor vehicle production affect the economy? * What are the standards of manufacturing efficiency in an automobile?

INTRODUCTION
The automobile industry is concerned with profits and competition; with consumer demands for styling, safety, and efficiency; and with labor relations and manufacturing efficiency (“,” 2008). About 250 million vehicles are in the United States. Around the world, there were about 806 million cars and light trucks on the road in 2007; they burn over 260 billion gallons of gasoline and diesel fuel yearly. The numbers are increasing rapidly, especially in China and India (“” 2008). In 2008, with rapidly rising oil prices, industries such as the automotive industry, are experiencing a combination of pricing pressures from raw material costs and changes in consumer buying habits. The industry is also facing increasing external competition from the public transport sector, as consumers re-evaluate their private vehicle usage (“,” 2008).
Moreover, automobiles has enabled people to travel and transport goods farther and faster, and has opened wider market areas for business and commerce. The automotive industry has reduced the overall cost of transportation by using methods such as mass production (making several products at once, rather than one at a time), mass marketing (selling products nationally rather

Similar Documents

Premium Essay

Automotive Industry in Malaysia

...5160: STRATEGIC MANAGEMENT SCL#3: The automotive industry in Malaysia PREPARED BY: marziana basir gm04459 SYAZwANI MUSTAFA gm04625 johan adam leong gm04319 FADZILLA ZAHRA SAMIAN GM04550 PREPARED FOR: SR. DR. HJ MAZLAN HJ HASSAN Graduate School of Management Universiti Putra Malaysia Q1. View this industry through the eyes of a CEO. Which would you regard as the three most important opportunities or threats to Mahathir’s idea? Reputation and consumer impression Merger between both Malaysia carmakers will improve the reputation of Malaysia carmaker in world’s eyes. With both manufacturers has its’ own Japanese counterparts (Mitsubishi for Proton and Daihatsu for Perodua), it will further boast the consumers’ impression of a combined quality from both makers in developing countries especially in ASEAN region. Merger can be seen as the platform for a united and consolidated effort for refinement in terms of technologies and quality control on each end product. Example is that using proven Mitsubishi’s robust engine development coupled with Daihatsu or Toyota’s ways of manufacturing and quality control (Kaizen) by utilizing the cheaper local Malaysia resource and facilities. The end product can be seen as a reliable piece of vehicle produced in the most efficient manner with lower cost and yet achieving the international standards recognition (i.e., EURO NCAP 5 start ratings). Total domination of the Malaysia automotive market Both car makers if merged may impose...

Words: 1836 - Pages: 8

Premium Essay

Managerial Econ Term Paper

...automobile industry throughout the 20th century. These innovation have made the automobile industry competitive. The automotive industry is dynamic and large. It provides jobs to many people especially in industrialized economies, approximately 1 in 10 people are employed in this industry in industrialized nations. Automotive industry has vast linkages to other sectors therefore developing economies always look upon at this industry as the engine of growth. Development in this sector improves the future prospects of developing nations. The automobile industry has moved through three stages over the century: (1) craft production (1890-1908), in which dozens of small enterprises competed to establish a standard process of manufacturing automobiles and also standard product; (2) mass production (1908-1973), by Henry Ford’ assembly lines, which became the standard operational mechanism of the industry; and (3 ) lean production (1973–present), which was initially developed at Toyota in 1950s , and which introduced with it a revolutionary management process of product-development and production. Before 1920s a large number of firms existed in the industry. The firms were competing to make a place for themselves in the industry. Till 1920s most of the firms started making exits from the industry. Setting the industry standard for...

Words: 2083 - Pages: 9

Premium Essay

Tata Motors

...Tata Motors: Can it become a global contender in the automotive industry? Executive Summary The objective of this report is to provide an analysis of Tata Motors’ current strategies and a detailed inspection of the financial situation, the company’s strengths, weaknesses, opportunities and threats and the competitive nature of the car market in order to make a recommendation as to whether or not it is in Tata Motors best interests, to propel itself into the global automotive industry at this point in time.  On close inspection there were three key issues identified.  Firstly the financial condition of the company is analysed to determine the viability of an expansion into the global automotive industry. Secondly the safety issues & standards of the vehicles produced, particularly related to the Tata Nano need to be addressed, and thirdly the detailed market research to be undertaken by Tata Motors in relation to the competitive needs and expectations of the motoring public in countries Tata Motors is trying to move into eg. United States and Europe when it comes to passenger cars as well as ability to continue to  effectively capture the Jaguar and Land Rover markets globally, along with their bus and truck range which are strong in India but not as strong in other countries. Economic conditions not only in India but globally are a consideration for Tata Motors.  As of 2012 India was the 7th largest nation in area, the second most populous country on earth with...

Words: 1848 - Pages: 8

Premium Essay

Staying Alive in the Global Automotive Industry: What Can Developing

...Research Vol. 20, No. 1, March 2008, 31–55 Staying alive in the global automotive industry: what can developing economies learn from South Africa about linking into global automotive value chains? Justin Barnesa and Mike Morrisb * Benchmarking and Manufacturing Analysts, and PRISM, School of Economics, University of Cape Town, Cape Town, South Africa; bPRISM, School of Economics, University of Cape Town, Cape Town, South Africa, and School of Development Studies, University of KwaZulu-Natal The insertion of the South African automotive industry into the global mainstream of vehicle manufacturing highlights a number of valuable analytical lessons for developing country automotive economies. The global value chains that dominate the automotive industry have fostered substantial upgrading within the South African automotive industry but pervasive international trends also limit the opportunities for value addition and more substantial increases in vehicle output. Key trends in this regard relate to tightening market conditions in the developed economies into which South African vehicle producers and automotive component manufacturers supply, excess global production capacity and the emergence of new low cost production locations principally in Asia. The benefits to the South African automotive industry of engaging in global value chains are clear but the long term sustainability and development of the industry remain in question. The importance of industrial policy in shaping any...

Words: 10733 - Pages: 43

Premium Essay

Economics/ Competitive Strategies and Government Policies

...Started over one hundred years ago in Germany and France the automotive industry has become a major source of industrial and economic stability worldwide. In this report we will describe how the auto industry is affected by new companies entering the market, mergers, and globalization, on pricing and the sustainability of profits. We will explore mergers and merger activity within the industry as well as current and expected government policies and regulations in place to address issues related to externalities. We will also take a look at the effects of global competition on the decisions made by management with regards to change in labor demand, supply, relations, unions, and rules and regulations in the auto industry. Considering the aforementioned topic on the auto industry’s competitive strategies and Government policies you will say that this report aims to explain how these two areas have impacted the auto industry and will affect it going forward. Globalization Increasing globalization in the automotive industry is changing the way of traditional partnerships. Ten years ago, it was questionable to pursue business in markets such as India and China because political and business conditions were not conducive to direct foreign investment (Emerging Markets, Emerging Opportunities , 2012).As a result, many automotive companies such as General Motors, Toyota, Honda and Ford viewed strategic partnerships as a way to dip their toes into the water and expand into different...

Words: 1813 - Pages: 8

Premium Essay

Automotive Industry Analysis

...AUTOMOTIVE INDUSTRY ANALYSIS Submitted by Team A Donald Bradley Morgan Bruns Adam Fleming Jay Ling Lauren Margolin Felipe Roman Presented to: Prof. Alan Flury December 5, 2005 ME 6753: Principles of Management for Engineers Executive Summary Chosen industry: This analysis focuses on the automotive industry, specifically, large-scale manufacturers of automobiles. The automotive industry is inherently interesting: it is massive, it is competitive, and it is expected to undergo major restructuring in the near future due to globalization and decreasing oil reserves. The analysis team members (we) feel qualified to perform this investigation due to our familiarity with the industry and our education—several of us have studied and worked on problems associated with automobile manufacturing and we are all mechanical engineering graduate students. Analysis Methodology: The report begins with a historical overview of the automotive industry. This is followed by an analysis of the industry’s structural characteristics using Porter’s 5 Forces Model as a framework, which provides an understanding of the automotive industry as a whole in its current state. Next, ten representative companies of varying sizes are analyzed and compared; the chosen companies and selection criteria follow. General Motors, Ford, and Toyota were chosen because they are the current market leaders. DaimlerChrysler, Nissan, Volkswagen, and Honda were chosen because of their status as stable international...

Words: 13102 - Pages: 53

Premium Essay

Eco 365

...Team B’s Week 5 Assignment ECO/365 Automotive Industry Introduction The automotive industry is one of most important businesses in the World, creating a variety of vehicles for consumers worldwide. Management teams must learn to recognize how changes in other businesses can directly or indirectly affect the success of firms in the same industry or another type in domestic and global markets. The following paper analyzes the effects of changes in the automotive industry and how regulations held by the government control the financial and consumer aspects this industry maintains domestically and globally. A Company Emergence in Market Mergers and Globalization Functioning as an evolving market, automotive firms all the world find innovative ways to appease customers by offering the multitude of vehicles meeting consumer needs. New companies entering the automotive industry are competitive businesses exploring ways to expand professionally through vertical mergers. “The automotive industry is literally built on the concept of vertical integration – that is, one company owning both the manufacturing and as much of the supply chain that leads to the factory floor as possible,”(Gorzelany, 2014.) For instance, currently Tesla Motors in building a $5 million dollar “giga-factory” to power its electric vehicles with half of its investment coming from Panasonic, Tesla’s partner in this vertical merger. Panasonic is a successful battery...

Words: 1869 - Pages: 8

Premium Essay

Competitive Strategies and Government Policies

...Rubric =========================================================== CONTENT 70% Address the following topics: (1) New companies entering the market, mergers, and globalization, on pricing and the sustainability of profits: Identify the type of merger activity in your industry or one with which you are familiarhorizontal, vertical, or conglomerateand explain why you made that choice.: Content Grade / Comments: Good, meets expectations. Good amount of detail about auto industry globalization and competition. (2) Current and expected government policies and regulations, including taxes and regulations in place to address issues related to externalities Content Grade / Comments: Mostly good. You could have gone into more detail about the incentives created and the (unintended) consequences of regulations and how this impacts decisions made by the firm. (3) Global competition on the decisions made by management with regards to change in labor demand, supply, relations, unions, and rules and regulations in your chosen industry Content Grade / Comments: Good, but this section seems more hypothetical and less applied. You should have given more details related to banking, but overall good points. (4) Recommend how the industry you chose may respond to each of the previous points. Content Grade / Comments: Meets expectations. (5) Paper is 1400-1750 words. Content Grade / Comments: Meets expectations. CONTENT POINTS: 66/70 =========================================================== READABILITY...

Words: 1857 - Pages: 8

Premium Essay

Tesla

...experience in disruptive business models and global trends of propulsion technology, Elon Musk founded Tesla to start producing sports/luxury electric cars. After a decade since the creation of the company, Tesla has managed to set a new value proposition in the EV* industry. Its electric vehicles contribute significantly to EVs becoming the standard in alternative energy transportation. However, Tesla is now focusing on a more complex issue: if electric propulsion becomes the standard in the automotive industry, which particular “functioning/operating system” will win the race in this new industry? Will Tesla’s battery and battery management technology be the new standard? Industry Analysis – worldwide automotive Industry (real time) (Fig 1) Barriers to enter the automotive industry are high due to the large fixed costs, cutting edge technology, high learning curve and strong customer loyalty to the brands. This basically also applies to the EV industry. However, electric vehicles are easier to imitate in production that lowers the barrier of entry. Competition in the automotive industry is high. There are a number of well-established players in the market who have existed over decades. However, within the EV industry, the number of competitors decreases to a few (Fig 2). This could change in the future, considering the...

Words: 2343 - Pages: 10

Premium Essay

Automobile Industry Audit

...The report is about the analysis of the environment of automobile industry and the marketing strategy for Ford Motor Company. It initiates with examining of external environment of automobile industry by using PEST analysis and Porter's five forces analysis. After the internal analyses that focus on the resource audit on brand, products, markets, technology, people and son on, the value chain analysis of the company will be conduct. Then the generic competitive strategies would be discussed through SWOT analysis, Ansoff Matrix and BCG Matrix in order to identify the general business strategy taken by the Ford Company. After specifying the company strategy by those analysis tools, the strategic evaluations would be drawn together with the strategy control methods. Finally, a suggested recommendation for the company future development will be mentioned at the end of the report. I. INTRODUCTION 1.1 Aim of The Report This report aim to identify the external environmental of the global automobile industry, measure and evaluate viable and sustainable marketing strategies using by the Ford Motor Company. Through appropriate theoretical concepts and models, together with appropriate methodologies, the organization within its contextual setting will be carefully examined, and justify recommendation will be mentioned. Though the report, how a successful corporation is operated and how its business strategy is implemented and controlled will be understood. 1.2 Company Background Ford Motor...

Words: 12313 - Pages: 50

Premium Essay

The Automotive Industry

...| The Automotive Industry | Ford AutomotiveOctober 3, 2012 | | | | | INTRO: BARRIERS TO ENTRY: Since the company we chose to analyze is Ford, the industry is limited to the North American automobile industry. Barriers to entry are defined as characteristics of the industry itself that prevent rivals from getting in as well as set standards for the competitors in that industry. The automotive industry has grown exponentially and it is currently one of the most competitive industries. One of the major players in barriers to entry is brand strength. Over the years brands have been developing and customer loyalty to one particular brand is very strong. This makes it difficult for a company to enter the industry and expect to be a significant competitor. Customers are loyal to one particular brand and that diminishes the customer base for new entrants. Unless the company already has the internal structure of a big automotive manufacturing company then it is very difficult for them to enter this particular industry. Not only are start-up costs very high, but there are significant costs in the design and manufacturing of cars. Product differentiation is also another major factor, since many companies have had to rely on their unique products to attract more customers as well as expand their customer base. Other factors to barriers to entry include government regulations. In the United States, the Environmental Protection Agency has set standards of emissions...

Words: 3364 - Pages: 14

Premium Essay

Nursing

...The automotive industry comprises 3% of gross global product. In many Western countries this number is higher (3.6% in the US)1 . Millions of workers worldwide are employed in auto manufacturing, auto parts, and supplies manufacturing as well as service and after sales care and other derivative industries. The auto industry produces more than 800 million cars globally. More than 250 million vehicles are produced in the United States. Despite the numbers, the level of interdependence caused by globalization is hard to quantify. Suppliers and clients are spread around the world in a web of relationships and obligations to one another. The economic crisis of the mid to late 2000’s did not have an equal impact across countries, companies, and employees. For example, in 2009, the dramatic impact of the recession followed by a restructuring in the US automotive industry was not fully mirrored in other mature markets in Europe or Japan. In the meantime, a very different trend was observed in major emerging economies with large domestic markets such as China, India, and Brazil, which experienced rising output as well as increased sales of motor vehicles. Many opportunities for mergers and acquisitions were present around the world. The crisis may have been a chance for Indian and Chinese auto manufacturers to expand their markets and become world players. Chinese auto manufacturers, for example,have since cut into the markets of US car manufacturers...

Words: 466 - Pages: 2

Premium Essay

Tata Nanol the Global Value Segment

...of Regions, Economy and Society 2010, 3, 443–457 doi:10.1093/cjres/rsq009 Advance Access publication 1 April 2010 The Tata Nano, the global ‘value’ segment and the implications for the traditional automotive industry regions Peter Wells Cardiff Business School, Cardiff University, Aberconway Building, Colum Drive CF10 3EU, UK, wellspe@cardiff.ac.uk Received on June 30, 2009; accepted on March 4, 2010 Downloaded from cjres.oxfordjournals.org at East China Normal University on May 24, 2011 This paper provides a case study of the Tata Nano, a low-price car designed primarily in and for the Indian market, and its implications for the developed industrial markets. While the Nano is a classic ‘disruptive’ innovation in an Indian context, this paper argues that the car and its emulators have the potential to undermine the viability of the European automotive industry whose business is premised on technological sophistication, premium branding and high price. In an era of greater austerity, the ‘value for money’ segment is the one with global growth potential in emergent markets as well. The paper concludes that policy makers in Europe will need to decide how to react to the rather different vision of automobility offered by the Nano. Keywords: Tata Nano, automotive industry, strategy, regional development, economic policy, price competition JEL Classifications: F01, L11, L52, L62 Introduction In March 2009, the Indian company Tata launched the long-awaited Nano model, intended...

Words: 10095 - Pages: 41

Premium Essay

The Outlook of the World Automobile Industry

...Advanced Industries The road to 2020 and beyond: What’s driving the global automotive industry? The road to 2020 and beyond What’s driving the global automotive industry? 3 Preface For the last century, the car culture has spread over the entire globe. As much as any other product, the car has shaped not only the global economy but how billions of people live. In Europe alone, the automotive industry accounts for roughly 12 million jobs (including related jobs); in the US, more than 8 million; and in Japan, more than 5 million.1 For all of its staying power, though, the industry has also seen constant change. Today’s cars – with their drive-by-wire electric systems or drive assistants – would have astonished Henry Ford, Ferdinand Porsche, and Kiichiro Toyoda. They would also have been taken aback by the increasingly demanding environmental requirements and the rise of new players, particularly in China. So what’s next? This in-depth research offers a perspective on where the automotive industry is headed. It is based on many discussions and interviews with the top management of leading automotive original equipment manufacturers (OEMs) and an analysis of data from the top 17 (by sales) global OEMs, which comprise 80 percent of global sales. This work was designed to answer the most crucial questions: ƒ ƒ ƒ ƒ How are the industry and the market evolving? What are the future challenges and opportunities? How can OEMs benefit from these new challenges and opportunities...

Words: 6853 - Pages: 28

Premium Essay

Globalisation

...Innovation and Development, Vol. 2, Nos. 1/2, 2009 7 Globalisation of the automotive industry: main features and trends Timothy J. Sturgeon Industrial Performance Center (IPC), MIT, 292 Main Street (E38-104), Cambridge, MA 02139, USA E-mail: sturgeon@mit.edu Olga Memedovic* United Nations Industrial Development Organization, Vienna International Centre, A-1440 Vienna, Austria E-mail: O.Memedovic@unido.org *Corresponding Author Johannes Van Biesebroeck Department of Economics, University of Toronto, 150 St. George Street, Toronto, Ontario M5S 3G7,Canada E-mail: jovb@chass.utoronto.ca Gary Gereffi Department of Sociology, Duke University, Durham, NC 27708-0088, USA E-mail: ggere@soc.duke.edu Abstract: This paper lays out the main features of the global automotive industry and identifies several important trends. A boom in developing country sales and production has not yet overshadowed the importance of existing markets in developed regions. Regional integration is very strong at an operational level, yet the industry has recently developed a set of global-scale value chain linkages, and retains national and local elements as well. The paper highlights how global, regional, national and local value chains are nested to create a pattern of global integration that is distinctive to the industry. We use global value chain analysis to help explain the limits of build-to-order in the industry, the role of regional and global suppliers, the shifting geography of production...

Words: 7992 - Pages: 32