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