Global Team Assignment (gta)
How the Recession is Affecting Automakers (75) (Needs China/Europe view)
Download 2.88 Mb.
|
- Navigate this page:
- The Future of the Automotive Industry (123) (Needs China/Europe view)
- Technology and Automotive (182)
- Porters Five Forces Analysis of Automobile Industry (255)
- Developing Country Competitor – BYD Auto (Total 3151)
How the Recession is Affecting Automakers (75) (Needs China/Europe view)Strategies for the automotive industry plan to boost productivity and competitiveness (especially in Southern Europe) while attempting to rein in healthcare and pensions costs. In the United States, intensifying pressures for the domestic automotive industry are affecting the price of raw materials (which have seen almost a 50% increase in cost) and the declining U.S. dollar. While U.S. exports are attractive, other countries are waging a currency war to prevent their currencies from dropping [Sas12]. The Future of the Automotive Industry (123) (Needs China/Europe view)While some analysis forecast encouraging vehicle sales, healthcare and pension costs threaten margins for U.S. automakers. Recently, the U.S. vehicle sales have been driven by fleet sales (sales of a large number of vehicles to companies such as rental car agencies and commercial truck operators). The growing rate of the retired population appears to be slowing the demand for new vehicles domestically. Data shows that the retired populations drives their vehicles 40 percent less and make fewer new vehicle purchases [Sas12]. Factors that will affect the future growth of equipment manufacturers and suppliers include demanding legislative mandates on emissions, safety and quality, new or evolving joint-venture business models due to all the recent mergers and acquisitions in the industry, and narrowing product portfolios. CHINA (write-up): It is the fact that the local car manufacturers in China have devoted to the research and development of electric car, such as BYD and its main competitor, Geely Automobile. The foreign manufacturers are also putting in efforts either to cooperate with the existing local car manufacturers who have started with the electric car business like BYD, or to pull together a team for the purpose of independent establishment. That being said, new energy is a future trend for the car manufacturers in China and will continue to be for at least the next decade.  (Geely’s new electric car-EC7)
Technology and Automotive (182)Technological advances in the future of automotive companies will dominate future markets as high-tech equipment is becoming more prevalent. Examples of some upcoming technology advances include security and communications services. Practical applications include voice assisted driving directions, parking, acceleration and vehicle failure detection. Other applications include vehicle-to-vehicle communications to ensure vehicles keep a safe distance from each other to avoid collisions and other enhanced safety features. Automakers will be pressured to develop a global platform, upon which vehicles are designed, engineered and produced, to leverage the most capital-intensive equipment and resources initially, and then customize and accessorize later for regional preferences [Sas12]. To stay competitive in the future, car manufacturers and suppliers will need to develop a vision in order to succeed, in the same way in which Apple has done with its iPod, iPhone and iPad products[Sas12]. A Five Forces Analysis of the industry was conducted to undersand the opportunity to know the potential profitability in an industry or a segment of a company and to know in which it competes or may choose to compete (Hitt, Ireland &Hoskisson, 2011). Porter's Five Forces Analysis of Automobile Industry (255)Threat of New Entrants: (Low) Large-scale automobile manufactures require significant capital investment and infrastructure. Consumer brand loyalty is high in the market and significant governmental restrictions, guidelines and safety laws make road certification a costly venture for a new company. Power of Suppliers: (Low) Many automobile suppliers rely on one or two automakers to purchase a majority of their products. And as a result, suppliers are extremely vulnerable to the demands and requirements of the automobile manufacturer and hold very little negotiating power. Power of Buyers: (High) In the past, the bargaining power of automakers was unchallenged. The consumer began searching for price and reliability alternatives with foreign vehicles and alternatives; choices have since increased significantly. Switching costs are generally low with the institution of leasing and favorable financing terms. Availability of Substitutes: (Medium) When analyzing this factor, consider not only the consumer purchasing from a different manufacturer, consider the likelihood of people taking the bus, train or airplane to their destination. The higher the cost of operating a vehicle, mainly gasoline and insurance, the more likely people will seek alternative transportation options. However, a personal vehicle offers greatest comfort and convenience. Competitive Rivalry: (High) Highly competitive industries generally earn low returns because the cost of competition is high. The auto industry is considered to be an oligopoly, which helps to minimize the effects of price-based competition. However, rebates, preferred financing, maintenance packages and long-term warranties have helped to entice consumers to purchase a new vehicle while also placing pressure on profit margins [Inv14]. Developing Country Competitor – BYD Auto (Total 3151)Introduction to BYD Auto (334)BYD Auto Company Ltd, or also known as "Build Your Dream", is a Chinese car manufacturer based in Shenzhen, Guangdong Province. Originally Tsinchuan Automobile Company, it was acquired by the BYD Company in 2002. The BYD Company is originally a rechargeable battery company that made their fortune with mobile phone batteries and later mobile phone accessories. By the time of the acquisition in 2002 it was one of the largest companies of its kind in China. BYD wanted to enter the electric car business, and y the acquisition of the Tsinchuan Automobile Company, BYD not only got the business license to build cars (required in China) but also the capability to produce cars. CEO and Founder of BYD Company, Mr Wang Chuanfu, is passionate to build an affordable electric car for the common people. Additionally, BYD would look to design and produce luxury electric cars utilizing the technology knowhow obtained with the 50:50 joint venture with Daimler AG, the brand name Denza. (Reference?) Mr. Wang Chuanfu founded the BYD COMPANY in 1995 and he’s currently the CEO. The company’s prime product at that time was rechargeable batteries for the mobile phone industry and subsequently BYD moved into phone accessories. In 2002 the company was listed in the Hong Kong stock exchange. By 2010, Bloomberg listed BYD in the top 100 tech companies in the world.  By 2009 the first electric cars and busses came on the market, seven years after the acquisition by Tsinchuan Automobile. To stimulate the sales in the city of Shenzhen was to procure 500x E6 models to serve as taxi's and about 1000x models of the electric bus. In the same year BYD started to export abroad the electric vehicles, starting with the K9 electric busses to the US and EU.
By 2013 BYD Auto sold half million cars, making it the 10th largest car producer in China. These weren't all electric cars, however, they were gasoline powered primarily with the first hybrid cars (F3DM) that were produced starting in 2008. Download 2.88 Mb. Share with your friends:
|