Automotive Industry Report
SOM-498-003- Dr. Masoud YasaiCreated By: Faraz Uddin, Daniela Maldonado, Tram
Vo, Jake Himan & D. Abbey
Industry Performance
The automotive industry is one of the most vital forces in our global economy
The global automotive industry grew by 21% in 2010
The industry is valued at $1,184.6 billon
Projected to grow by 38.6% by 2012
Industry Performance
Profits have mainly suffered do to the global recession and energy concerns
Car’s must now not only look stylish, but provide good gas mileage and be good for the environment
Car companies had to revamp their lineup to meet the standards of our new global taste: Style, Reliability, Eco-friendly, & Gas-friendly
Key Industry Characteristics
The U.S automobile industry is a 493 billion dollar industry.
Light Car Sales in the U.S› 16.1 million units in 2007› 13.2 million units in 2008› 10.4 million units in 2009› 12 million (expected) units in 2010› 14.3 million units in 2012
Major Competitors Based on Market Share
Gener
al M
otor
s
Ford
Mot
or
Toyo
ta M
otor
Chrys
ler
Honda
Mot
or
Nissan
Mot
or
Hyund
ai
Kia M
otor
Volks
wagen
BMW
0
5
10
15
20
25
Market Share %
Market Share %
Nature of Competition
The global automotive industry is very competitive
Style, Quality, & Cost are major factors
Global Impact
The USA accounts for 1/5 of the global market share
China and India and other emerging countries will be seeking new cars in the future
Socio-Cultural
Due to the global recession many auto companies have been struggling
To help boost sales many companies have to differentiate there products
Prices incentives, stylish looks, and impact on the global environment affect consumers decisions
Generic Industry Structure
The automotive industry is a maturing industry
Most companies use product differentiation as their main strategy
Porters Model: Suppliers
The issue with many companies is the rising cost of raw materials
Metals, Leather, etc. This leads to a higher price for
consumers Inflation and the job market are going
to be major factors for consumers
Substitutes
There are so many automakers to suit the taste of many consumers
Whether you want a fuel-efficient car or a luxury there is a brand for you
Buyers
Buyers have become very smart when shopping for cars with the advent of the internet
The taste’s of buyers have changed from the 90’s when big bulky cars where in
Now most consumers prefer small eco-friendly vehicles.
Potential Entrants
Entry into the automobile business is very tough
The market is very saturated The only notable companies to make a
dent is Hyundai and Kia from Korea These two companies crept their way
into the market by foregoing a cost leadership strategy
Complementors
Gas Prices Raw Materials: Metals, Glass, etc. Government Incentives IPod & GPS
Conclusion
Although The global economy is suffering, the auto industry is growing
The global population will grow to 7 billion people
One day each one of them may want to buy a car
Emerging countries with growing economies will seek mobile workers who need cars to get form point A to point B