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

Genera

l Moto

rs

Ford M

otor

Toyota

Motor

Chrys

ler

Honda

Motor

Nissan

Motor

Hyund

ai

Kia Moto

r

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

The Future Key Drivers of industry change:

› Reducing the carbon footprint Future Profits Industry Attractiveness

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