This paper describes in-depth one of the largest industries in the world economy, the automotive industry.
This paper describes the automobile industry in detail. It explains who are the major companies, competition for consumers and the future improvements in transportation. It examines the major issues of the industry, technology and the environment impact on the industry.
Table of Contents
I. Industry Background
II. Who are the key players and how do they compete in the market?
III. What are the dynamics of competition?
IV. Power of Buyers
V. Power of Suppliers
VI. What is the industry’s driving forces?
VII. Industry Trends
VIII. Market Leaders
IX. What will it take to remain successful?
In the economy of the world, the automotive industry is amongst the biggest industries. It produces more trips each day, each week, each year than any other mode of transportation. No other mode of transportation attracts as many consumer dollars, employs as many workers, consumes as much steel, glass, and rubber, and has a greater impact on the country’s economy and society.” Of the ten biggest corporations listed in Fortune Magazine’s list of Global 500 for 2001, four of them were from the automobile industry. They were General Motors(GM), Ford Motor Corporation, DaimlerChrysler, and Toyota Motors and the revenues they generated was $183,632.00, $180.598.00, $150,069.7, and $121,416.2 billion respectively. The aggregate here is an astounding $635,715.9 billion. Besides these companies, there are numerous other smaller automakers such as Honda and Hyundai that possess smaller market shares. In the year 2000 the US automobile industry sold an amazing 17.4 million vehicles and beat 1999’s record by 500,000! The growth in the industry during this period was attributed to the growing economy, increased consumer confidence, and rising disposable income. However, that was in 2000 and although the automotive industry continues to maintain a dominant presence in the world, the next couple of years seem to be a real challenge. Gigantic automakers such as GM, Ford, and DaimlerChrysler are loosing market share and their performance is on the decline. As other companies compete for more market share amidst economic difficulties, the bigger corporations are being severely affected. “All three automakers (GM, Ford, DaimlerChrysler) faced significant weakness in the summer months (01) due to slower economic growth, lower consumer spending, and higher unemployment.” The only certainty during these uncertain times is that trends are changing. The economy has definitely slowed down, competition is no longer what it was historically, and there have been changes attributed to the industry’s driving forces. All these differences for the better or for the worse will factor in to produce the leaders of tomorrow.”