Essay PreviewMore ↓
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
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.
How to Cite this Page
"The Global Automotive Industry." 123HelpMe.com. 18 Nov 2019
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- • Global competition in the industry Global competition is changing the environment facing most companies today. As trade barriers fall and transaction costs decline, new global competitors are entering previously more isolated domestic markets. In response to this intensified competitive pressure, local companies are pushed to enhance performance by innovation and adopting process and product improvements. The automotive industry is one to the largest and most important industries in the world.... [tags: Automobile, Automotive industry, General Motors]
879 words (2.5 pages)
- Global competition in the industry The Automotive Industry in the United Stated was the market leader until the early 60s, however, many countries have begun to invest in the car industry, in particular, the countries of Europe. Despite the American automotive industry has been a market leader in the beginning of the century, the United States opened a new period in the history of the American automotive industry through an efficient production model invented by Henry Ford. The cars were manufactured on a large scale which led to the reduction in costs.... [tags: Automotive industry, Internal combustion engine]
1062 words (3 pages)
- 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.... [tags: global market, innovations]
942 words (2.7 pages)
- Introduction The number of multinational companies is on the rise due to changes in business dynamics, technology and increase in pressure on businesses to diversify their operations and make the most out of available opportunities. Numerous automobile industries have resulted as a consequence of technology change. There is a lot to talk about when it comes to technology and business diversities. However, despite technology changes, businesses still feel immense pressure to ensure that they redesign their operations so as to make the most out of the available opportunities.... [tags: FAW, Tata]
2551 words (7.3 pages)
- When I was younger, I remember begging my mom at every toy aisle in the department store to buy at least one hot wheel car that I picked out. I had a problem; I had an undying thirst for these tiny cars in those recyclable blue cardboard and plastic packages. I used to pretend that I was a small person, small enough to fit in the cool cars I bought with just a glimmer of hope that maybe I would be able to fit inside and drive away. That never did happen though, but I had an indomitable dream. I had the patience that maybe one day, I would be able to drive my own actual car.... [tags: automotive industry, global warming, fuel]
3581 words (10.2 pages)
- Automotive Logistics Global Conference & India conference Matthias Schulz Director North America Material Planning & Logistics Ford Motor Company Amlan Bose Vice President - Material Flow Engg., Logistics Network and Exports Operations Ford Asia Pacific and Africa Nigel Harris President Ford India The 2014 Automotive Logistics India conference, held in Gurgaon, revealed that despite years of lacklustre growth or declines, the Indian automotive logistics industry has not lost its hope or belief in the country’s promise.... [tags: Ford Motor Company, Automotive industry]
801 words (2.3 pages)
- he American auto industry has seen many changes since its first car was built. From steam powered vehicles to electrical automobiles, the industry has literally paved the way for some of the most innovative ideas the world has ever seen. However, to remain in the forefront, the industry has had many obstacles stand in its way. Global competition in the industry There are many trends that can affect the US automobile industry. Today, the biggest impact globally for US automakers comes from East Asia, China specifically.... [tags: Automotive industry, Automobile]
906 words (2.6 pages)
- The American auto industry is mainly represented by the Big Three - i.e.: General Motors (GM), Ford, and Chrysler. For more than a century these organizations have been the undiscussed leaders of the industry, but in less than a decade they are facing great difficulties. Globalization, the 2008 crisis, and the rising concern for environmental issues have been seriously challenging the American auto industry, “an important sector of the overall economy. In fact in the United States, the automobile is second only to a house in purchase value for the average American household.” (Gale, 2008) The aim of this essay is to report and analyze some factors, as “the global competition in the industry,... [tags: Automotive industry, General Motors, Automobile]
1038 words (3 pages)
- Fueled by the 2008 recession, the automotive industry suffered a crisis that hurt the United States’ national economy. Lead Up to the Crisis The automotive industry crisis of 2008–2010 was a part of a global financial downturn. General Motors, Ford, and Chrysler, also referred to as the United States Big Three automakers, had limited access to offshore production, unlike their foreign equivalents. The New York Times wrote, “For the most part, the so-called auto transplants – foreign-owned car companies with major operations in the United States – have deep pockets and ample credit, and they are not facing potential bankruptcy like General Motors and Chrysler." Because of the rise in gas pri... [tags: General Motors, Automotive industry, Chrysler]
1083 words (3.1 pages)
- Global Competition in Automobile Market The automotive industry is dominated by a few key players. Kallstrom explains, “The top five players have a significant 49% share of the global automobile market. This share decreased by 5.1% in the 15-year period from 1998 to 2013. Smaller companies slowly took the major automotive companies’ share away. In terms of vehicles produced, General Motors (GM), Ford (F), Volkswagen, and Toyota (TM) are still featured on the top five list.” It is important to note that Hyundai comes in at number five.... [tags: Automobile, Automotive industry, General Motors]
984 words (2.8 pages)
Competitive Rivalry in the Industry
The industries of automobiles have been intense for many years causing lower profits in an oligopoly market. The price-based competition level has been so drastic in engaging the fierce competition. Although the margins are set low and the pressure derived from the rivalries are at an all-time high, the profitability’s and innovation levels has remained as a top factor within campaigns, production development, etc. Today, the top major car-producers that rival one another are those of the foreign and domestic imports such as China, Germany, India, France, Japan, Italy, and the United Kingdoms.
Threat of New Entrants
The entry into the auto industry is a great opportunity for gaining revenue and sales throughout the automobile market. This potential opportunity will allow those competitors to compete and bid for lower prices and grant the privilege to cause inflation costs while reducing the current profitability of car sales. The industry is very demanding and has room for a sufficient amount of growth although the past history was known to be very vigorous causing retaliation toward entrants as well as rivalries. Also, by the entrants being new to the marketing scheme there is a potential chance of a disadvantage within the capital markets.
Threat of Substitutes
At this time, there does not appear to be any major threats within the automotive industry. Although other means of transportation are available, the uses of foreign and domestic cars are more reliable than the use of a bus, train, motorcycle, etc. Although it may cost less to utilize those other means of transportation, the use of a personal vehicle is more of a demand and preference from majority of the consumers.
Since the beginning of the automotive industry until now, the market has remained steady although it has reached its all-time low and high peaks. In the year of 1890, the launching of the automotive industry was one of the largest empires to ever reach the United States of America. Today, there are over 100 manufacturers that helped to reach the success level within the industry alone. General Motors, Ford and Chrysler are all top ranking organizations who have made large contributions to the development stage of automobiles. Over the past 4 years, America has produced more than 8.1 million vehicles per year in the United States alone. The supplier within the automotive industry has produced over $171 billion in shipments, which accounts for roughly 3 percent of the manufacturing of the United States. Over 3.3 million jobs have become available since 2007 for the automotive industry sector. The growth and continuation of growth for the automotive industry will remain consistent over the next couple of years. As stated by the great author, Ashton Kutcher, “I think about the automobile, I think about like, when I was a kid, you know, the invention of the answering machine, which I was like, 'Wow.' Or call waiting, which was, like, very big. It was a very big thing. Call waiting was a very big thing. And these incremental innovations happen constantly” (www.brainyquote.com).
Porter, M.E. (1979) "How competitive forces shape strategy", Harvard Business Review, March/April 1979.
Porter, M.E. (1980) "Competitive Strategy", The Free Press, New York, 1980.
Porter, M.E. (1985) "Competitive Advantage", The Free Press, New York, 1985.
R. Sobel, The Car Wars (1984); J. Fink, The Automobile Age (1988); J. A. C. Conybeare, Merging Traffic: The Consolidation of the International Automobile Industry (2004); B. Vlasic, Once Upon a Car: The Fall and Resurrection of America's Big Three Automakers (2011).