Free Essay

Automotive

In: Business and Management

Submitted By mnvd98
Words 467
Pages 2
Key Factors influencing Automobile Industry
Consumer Sentiment Index:
Customer Sentiment Index, 12 month rolling average of the Index; historical and forecast data and analysis. The end customers are very important to ensure the survival of the Motor Vehicle Manufacturing industry. Economic downturns and other events can affect the expenditure decision of households. When customers are not happy or optimistic about the future of the economy, they will tend to postpone expenditure until times are better.
Domestic Goods Price Metal/ Iron and Steel
Steel is a major input used when manufacturing a motor vehicle. Rises in the price of steel puts cost pressures on manufacturers, which often leads to a fall in profitability. Over the past five years, the price of steel has been rising rapidly. These rises inprice eventually pass from the manufacturers to the end customers’.
Import and Export Taxes (Duties) / Motor Vehicle Tariffs
Tariff rates applicable to the industry: High taffies may restrict flow oftrade but may attract investment if domestic market is big enough and growing. Over the last few years India’s tariff policies and conditions of import ofvehicles have served the purpose of attracting investments. Industry is keen that the existing tariff structure roadmap and conditions of import of vehicles are retained without any modifications because of certain systematic deficiencies which make manufacturing less cost competitive in India as compared to some of the neighbouring countries like China, Thailand, Indonesia, etc.
Wold Price Energy/ Crude Oil
The hike or the effect of increasing prices of crude oil at world level per barrel will affect the market scenario of the Automobile industry adversely.The price of oil and petrol affect the driving habits of consumers and the type of car they buy. Over the past five years, the price of petrol has been influenced the buying decision of motorists, who are switching more to fuel efficient options. These include cars that run on liquefied petroleum gas (LPG), CNG etc, diesel and small cars that achieve better mileage. The trucking sector has also been struggling with the rise in the price of fuel, which has put enormous pressures on their costs.

Automobile industry driving key success factors:
The Key Success factors in the Motor Vehicle Manufacturing industry are * Efficiency factor- Improve labour productivity, labour flexibility, and capital efficiency * Resource Availability- Quality manpower availability, infrastructure improvements, and raw material availability * Effective cost controls- Close relationship with supplies and goods distribution channels. * Establishment of export markets- Growth of export markets * Having an extensive distribution/collection network- Goods distribution channels * Successful industrial relations policy- Ethical and tacticalindustrial relations * Access to the latest available and most efficient technology and techniques- The degree of investment in technological improvements and product development * Optimum capacity utilisation- The level of plant utilisation * Management of high quality assets portfolio- Understanding implications from Government policies

Similar Documents

Premium Essay

Automotive

...Investment Opportunities in Automotive Sector in RAK -A Sector Study on Automotive Sector in UAE with Regional Perspective Photograph: Ashok Leyland’s Bus Assembly plant in RAKIA Industrial Park in Ras Al Khaimah (UAE) December 2009 Contents Executive Summary Introduction The Changing Nature of Global Manufacturing The Changing Nature of Supply Chain Global Automotive Production & Major Players Automotive Production in the Middle East GCC Automotive Sector GCC Economic Outlook-Macro-economic Indicators GCC Macro-economic Indicators GCC Auto Industry SWOT Outlook for GCC Automotive Sector GCC Competitive edge Vehicle Assembly in GCC GCC Source of imports GCC Highlights-Foreign trade in Automotive sector UAE Automotive Sector UAE Auto Industry SWOT UAE Economic SWOT UAE Business Environment SWOT UAE Automotive Sector trade Automotive Manufacturing in UAE Low cost and Luxury car market in UAE Used Car Market in UAE After- sales Business in UAE Car Rental Market in UAE Rationale for setting up projects in RAK Identified Projects UAE Auto Industry Forecast Scenario Automotive Products & Free Trade Agreements About Ras Al Khaimah About RAK Investment Authority References Annexure I II III IV V-A V-B VI-A VI-B VII VIII IX X World Motor Vehicle Production By Country And Type In 2008 World Ranking of Vehicle Manufacturers In 2008 UAE Imports & Re-exports of Vehicles in value term List of Automobile Component Manufacturers in GCC UAE Trade figures on components 2006-1008 In...

Words: 31801 - Pages: 128

Premium Essay

Automotive

... Challenges for the automotive industry in an on demand environment Seven areas of strategic action Executive brief ibm.com/bcs Contents 1 1 1 3 4 7 Introduction The automotive industry is facing new and pressing challenges. Globalisation, individualisation, digitalisation and increasing competition are changing the face of the industry as we know it. In addition, increasing safety requirements and voluntary environmental commitments by the automotive industry will also contribute to the changes ahead. Size is no longer a guarantee of success. Only those companies that find new ways to create value will prosper in the future. The purpose of this paper is to present a short overview of the automotive industry today and highlight challenges facing the industry. Based on this perspective, we will discuss strategic levers enabling OEMs to transform to on demand enterprises. Introduction Methodology The evolving automotive landscape The on demand challenge Brand management Customer relationship management 10 Core competency management 13 Software management 15 Quality management 17 Product development management 20 Expansion management 22 Strategic steps toward the on demand business 25 Conclusion 25 About the authors 26 About IBM Business Consulting Services 26 References Methodology The information, data and opinions presented in this paper are based on a series of interviews that IBM Business Consulting Services held with automotive industry experts, who...

Words: 9308 - Pages: 38

Premium Essay

Automotive

...China’s Automotive Modernization and history The automotive industry in China has been the largest in the world measured by automobile unit production since 2008. Since 2009 annual production of automobiles in China exceeds that of the European Union or that of the United States and Japan combined. China’s automobile industry had Soviet origins mainly (plants and licensed auto design were founded in 1950s with the help of USSR) and had small volume for the first 30 years of the republic, not exceeding 100-200 thousands per year. It has developed rapidly since the early 1990s. 1928 to 1949 Zhang Xueliang founded his arsenal to make one truck called Ming Sheng in 1931. Another general, Yang Hucheng, patronized the inventor Tang Zhongming to make a new type of mobile energized by charcoal.These charcoal cars are primary vehicles during World War II in China,considering the blockade by Japan. 1945,China Automotive Manufacturer made the first automobile powered by tung oil 1928 to 1949 * 1956: First Automobile Works The first car Jiefang CA-30 began production of a modern automobile plant. ] * March 10, 1958: The first 2½ ton light duty truck (NJ130), which was based on Russian GAZ-51, * was produced in Nanjing. The truck was named Yuejin (meaning "leap forward") by China's First Ministry of Industrial Machinery. * June 1958: Nanjing Automobile Works, previously a vehicle servicing unit of the Army, was established. The truck production continued until the...

Words: 1102 - Pages: 5

Premium Essay

The Automotive Industry

...The Automotive Industry Recovery Prepared for: Transmittal Letter TO: FROM: DATE: SUBJECT: Report Overview The following report discusses the automotive industry recover from the “Great Recession” that occurred in 2008/2009. Information presented will be the state of the automotive industry before the recession, after the recession, how the industry is doing now and how the future looks for automakers. Contents The Automotive Industry Recovery 1 Transmittal Letter ii Contents iii Figures iii Executive Summary iv Introduction 1 Finding 1 Pre-Recession 1 Post Recession 2 How is it now? 3 The Future Outlook 3 Analysis 3 Summary 3 Conclusions 4 Reference 5 Figures Figure 1, Annual Auto Sales in the U.S. 2 Executive Summary The Automotive Industry was hit hard by the “Great Recession”. Jobs and sales declined rapidly as the economy and Americans were coming up short financially. After a couple years and some restructuring the automotive industry started making a comeback. Increasing sales by focusing on consumer needs helped bring workers back to work. Now the industry is booming again with continued growth in the future. The Automotive Industry Recovery INTRODUCTION PURPOSE The nationwide effect from the Great Recession on the auto industry was apparent everywhere. With the bail-outs of some of the big auto makers and loss of jobs, the economy really went into a slump...

Words: 1111 - Pages: 5

Premium Essay

Automotive Sector

...Turkey’s Automotive Sector Turkey’s automotive sector’s foundations date back to the 1950s. Over recent decades, it has grown substantially, due to two main factors: the large size of the domestic market where individuals were gaining increasing purchasing power as the economy developed; and the enormous expansion of international trade especially following the Customs Union Agreement signed with the EU in 1996. These fundamental factors also drive the long-term growth expectations. In recent years, the automotive sector has become our country’s leading exporter, with total exports of USD 16.9 billion in 2009, which constituted 17.4 percent of Turkey’s total export revenues.1 Exports were USD 8.7 billion in the 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...

Words: 1677 - Pages: 7

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

Automotive Industry

...Business Information Analysis | Table of Contents Electronic Cover Sheet………………………………………………………………………1-2 Introduction………...................................................................................................................4 1. Key business issues and challenges……………...................................................................5 1.1 Globalisation, regionalisation and market convergence...........................….......................5 1.2 Increasingly diversified consumer aggregate patterns of behaviour...................................5 1.3 Accelerated modification and diversification of the product portfolio………………..….6 1.4 Pervasion of automobiles with digital technology..............................................................6 1.5 Increased pressure for innovation and flexibility in development and manufacturing…...6 1.6 Strategic levers……………………….................................................................................7 1.6.1 Brand management...........................................................................................................7 1.6.2 Customer relationship management……………..............................................................7 1.6.3 Core competency management…………………….........................................................7 1.6.4 Software management.......................................................................................................7 1.6.5 Quality management.....

Words: 3077 - Pages: 13

Premium Essay

Automotive Logistics

...Report - Automotive Logistics India 2010 - Automotive Logistics India http://www.automotivelogisticsindia.com/82/Report/[10-12-2010 00:00:14] CONFERENCE 2009: Market boom, but where are the 3PLs? PUNE 2-4 December 2009: As delegates assembled in Pune, India’s car sales figures for November were released – and they made startling reading. Growth is back in India: market leader Maruti Suzuki saw sales jump 60% over the same month in 2008 (though only 17% up on 2007); Tata Fiat was up 55%; Hyundai up 93%; GM up 65%; and Mahindra more than doubled at 102%. The figures confirm that late 2008 was just a brief pause in the upward trajectory of car production and sales. But logistics is groaning under the strain. Both speakers and delegates lamented the low cost/low investment logistics model which exists in the automotive sector in India. OEMs called for a significant increase in the low level of involvement from sophisticated 3PLs. About the conference Read the conference reports via these links: 1 - Overall conference report 2 - Special report on packaging 3 - Special report on supply chain management See the conference programmeand speakers. See archive information about the previous two annual India conferences by using the top navigation. See the Jan-Mar 2010 issue of Automotive Logistics magazine for a report in print, together with market statistics. The 2010 conference will be from 8-10 Dec in Chennai. Register your interest. This conference was the third...

Words: 2948 - Pages: 12

Premium Essay

Automotive Industry

...passenger cars in order to make this sector globally competitive. At present 100% Foreign Direct Investment (FDI) is permissible under automatic route in this sector including passenger car segment. The import of technology/technological upgradation on the royalty payment of 5% without any duration limit and lump sum payment of USD 2 million is also allowed under automatic route in this sector. With the gradual liberalization of the automobile sector since 1991, the number of manufacturing facilities in India has grown progressively. The cumulative production of automobile for April-December 2011 registered a growth of 14.94 per cent over same period in 2010. Production in December 2011 increased by 10.91 per cent year-on-year. Automotive Industry comprises of automobile and auto component sectors and is one of the key drivers of the national economy as it provides large-scale employment, having a strong multiplier effect. Being one of the largest industries in India, this industry has been witnessing impressive growth during the last two decades. It has been able...

Words: 4070 - Pages: 17

Premium Essay

Automotive Evolution

...Automotive Evolution Report The automotive industry has grown tremendously over the past 50 years. Vehicle technological advancements, manufacturing process improvements, and supply chain efforts have all significantly improved. 50 years ago the American automotive market was predominantly domestic built vehicles, and foreign automakers scarcely had an impact; which has dramatically changed today. The first modern automobile was created in Germany in the year 1886 (Davis). Production methods were insufficient at the time making the vehicle unaffordable for any potential middle class consumer. Henry Ford greatly contributed to the creation of the first moving assembly line, expanded upon and utilized today (Davis). Starting with the Model T, Ford went on to continue producing vehicle and manufacturing improvements making automobile manufacturing efficient and profitable. Approximately 50 years ago the automotive industry evolved into an oligopoly dominated by three firms; known today as Ford, General Motors, and Chrysler (Davis). This oligopoly created in the automotive industry is largely due to technological advancements, process improvements, and strategic acquisitions of the more competitive firms. Today the automotive assembly plant is similar from when it started out in the early 1900s; with additional improvements and advancements. Products still come down the assembly line to individual workers who perform specific tasks. Today many assembly line tasks are performed...

Words: 878 - Pages: 4

Premium Essay

The Automotive Bailout

...Running head: AUTOMOTIVE BAILOUT The Automotive Industry Bailout: Rewriting History ECON 625: Managerial Economics Abstract The automobile has long been a symbol of American growth and prosperity. Throughout the 20th Century owning and driving a car was an essential part of everyday life for vast majority of U.S. citizens, but few took much time to think about how they were manufactured. Early in the 21st Century, as the U.S. economy began to trend downward, it became apparent that two of the three primary automakers were in significant financial peril. With government aid already being allocated to some of the nation’s largest financial institutions, difficult decisions had to made as to how to approach the alarming crisis at the heart of an industry woven throughout the lives of so many United States citizens. Introduction Beginning in the early twentieth century, automobile makers began marketing and ultimately selling cars to middle-class Americans. It did not take long for a deep love affair for cars to develop across the nation, and ownership became woven into the fabric of the “American Dream”. The invention of the assembly line in the 1910s made automobiles relatively inexpensive, and by 1929 it is estimated that American car companies were producing 5.3 million cars per year (Miller-Wilson, n.d.). The automotive industry surely had its share of ups and downs during the 1900’s, with two World Wars, the Great Depression, an oil crisis in the 1970’s,...

Words: 3848 - Pages: 16

Premium Essay

Automotive India

...Introduction India’s automobile market has grown steadily over the last seven to eight years, with the exception of the previous two years where the effects of the global downturn were felt, primarily in sales of commercial vehicles. However, even during the downturn, the two-wheeler and three wheeler segments, which were until then experiencing low growth or losing volumes, bucked the trend. India’s automotive industry is well-positioned for growth, servicing both domestic demand and, increasingly, export opportunities. The auto industry currently contributes about 5% of the GDP and is expected to grow five-fold by 2016 and account for over 10% of India’s GDP. In terms of production, the number of automobiles being made steadily increased from 5.3 million units in 2001-02 to 10.8 million units in 2007-08. India has become the second largest manufacturer of two wheelers and the ninth largest car manufacturer in the world. It is one of the world’s fastest growing passenger car markets and is expected to become the third largest automobile market in the world. Major Players While the passenger car segment has been dominated by three vendors – Maruti Suzuki, Hyundai and Tata Motors (which together accounted for 70 percent of passenger car sales in 2009-10) – the two wheeler segment is dominated by Hero Honda, Bajaj and TVS Motors (which together accounted for more than 80 percent of two-wheeler sales in 2009-10). Honda, Volvo Group, Jaguar Land Rover (JLR), Hero MotoCorp, Mahindra...

Words: 715 - Pages: 3

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

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

Automotive Production Levels

...Automotive Production Levels The automotive industry is a competitive yet lucrative business industry. Every automotive manufacturer is designing and developing the latest revolutionary model car. Automotive manufacturers and dealers are able to price their products at exorbitant prices if they so choose because in most cases the consumer does not have a choice but to purchase a car. We all need transportation and with that in mind automotive traders basically determine product pricing. The market structure of the automotive industry is relative to the number, size, kind and distribution of buyers and sellers (Modern Ir LLC [MILLC], 2008). Needless to say the automotive industry is a very huge market. The automotive industry is considered to be in the perfectly monopolistic competition market structure, having many sellers of a similar product yet each seller’s product is somewhat unique to the producer. There are no seller or buyer entry barriers and there are numerous buyers and sellers within this market structure. One main purpose of the producers of the automotive industry is profit. Measuring product development performance is neither simple nor straightforward due to its complex nature. This section examines these measures quality and customer satisfaction, market share, profitability, lead time, and productivity for Toyota. The data show that while this company’s system excels along all the measures, both companies score extremely well along several and thus constitute...

Words: 1902 - Pages: 8