The Global Automotive Industry

Satisfactory Essays
Industry Structure

Over the past 140 years, the top producing manufacturers have operated throughout the global competitive marketplace. The acceleration that has occurred since the early 1990’s due to the construction from overseas sites and the future establishment of merging multi-national automakers in history development. However, the global markets of automobiles have been broken into three major factors such as: (1) global market dynamics; (2) establishment of global alliances and (3) industry consolidations. At this time, the manufacturing industry for automobiles has established a high level of capital and labor demands. In North America, the historic labor and market has grown to become part of the Big Three, which is known as: General Motors, Chrysler and Ford Motor Company. Also, there are two foreign manufacturers that have become well established and they are: Toyota and Honda.

Example Auto Industry Structural Chart

Future Outlook

According to research, the top ranking sellers within the automotive industry will shift and the market would look totally different by the year 2019. New technology adjustments will take place and emission regulations and fuel-economy forces will change as well. Also, top producing companies will emerge into one business platform while strategizing for the near future to come. China will prevail and continue building its large volume topping India and other foreign and domestic markets. Overall, the sales growth will slow down its profits from a double digit to a single digit annual percentage.

Porter's Five Forces Strategy Analysis as it applies to the Auto Industry

Bargaining Power of Buyers

The bargaining power of makers within the automobile industry has been faced with unchallenging and unlimited potential buyers since the beginning of times. American consumers over time became annoyed with the everyday style of automobiles and wanted a significant change. Foreign and domestic cars were the way of life for these consumers but their preferences were set upon lower prices for their purchases.

Bargaining Power of Suppliers

The regional market has shifted its power of suppliers toward the regression of technology as it has progressed over the past few years triggering new standards and patterns of structural changes within the automotive industry. A large number of investments had placed pressure upon the lower level of probability functions creating a risk through the use of liquidity concerns and bankruptcy. The strategic positioning over the next couple of years is expected to grow and eliminate those previous challenging errors creating new dynamics and growth opportunities.
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