Trends in the Automotive Industry

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Trends in the Automotive Industry 1. Consolidation The trends in the automobile industry present through the 1990s intensified as the industry moved into the twenty-first century. Global convergence stood out as a major issue. And the consolidation was continuing from 1990 to 2000. 2. Mergers and acquisition There was a great deal of consensus amongst commentators that in a few years the industry would consist of no more than six giants, with a peppering of niche players. Mergers and acquisition activity moving from automobile manufacturers, already highly concentrated to parts suppliers. 3. Technology The Internet and e-commerce---- shortening the lead-time The Internet and e-commerce play a vital role by shortening the lead-time for the production of an automobile. If given the importance of the purchase, customers could be brought into a Web-driven relationship with automobile suppliers and manufacturers, a shortening of the lead-time was a distinct possibility. The Internet allows for a more accurate assessment of demand, not only of its volume, but also of the kind of vehicles and optional extras the market required. Business-to-business network----just in time As far as manufacturing was concerned, considering that a typical automobile was made up of more than 20,000 parts provided by about 200 suppliers, all due to be delivered ‘just-in-time’, a business–to-business net work looked remarkably useful. I will apply Porter’s five forces framework to the segmentation of luxury cars in automobile industry in this question. The five forces framework helps identify the sources of competition in an industry or

In this essay, the author

  • Analyzes the trends in the automotive industry, including global convergence and mergers and acquisitions.
  • Explains that the internet and e-commerce play a vital role by shortening the lead-time for the production of an automobile.
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