An analysis of the factors influencing the shifts in buying power in the auto industry

Since its foundation in the 19th century, this sector has grown to become an important part of the world economy in terms of revenue. However, since the global recession has passed, the sales of automotives are again back on track.

An analysis of the factors influencing the shifts in buying power in the auto industry

Based on information from the automobile manufacturers, Autofacts Yearbook Autofacts, Inc. Page 96 Share Cite Suggested Citation: How Far Can We Go?. The National Academies Press. Hourly employment reached a recession low in the first quarter of as factories closed to respond to low retail sales and inventory reductions by dealers.

The US Auto Industry in Five Forces to Consider - Automotive Industries All industries need raw materials as inputs to their process. This includes labor for some, and parts and components for others.
Automotive Industry PESTEL/PESTLE/PEST Analysis by Cheshnotes Today marketers face an increased challenge in analyzing the marketing environment as more and more external forces are shaping and changing the buying and spending habits of consumers. Some variables are uncontrollable such as the distribution of income in a country or a law that a government has passed, where the best approach is analyzing and understanding these shifts, and then adapting marketing strategies based on the data found.
Your customers themselves define your enterprise, almost as much as your product line defines your enterprise. One-on-one, you may have thought about your ideal customer, what she's looking for and how she prefers to shop; and, although this knowledge gives you a way to focus your business identity and market niche, considering your client base on a broad scale creates a better opportunity for success.
The SWOT analysis framework has gained widespread acceptance because of its simplicity and power in developing strategy. Just like any planning tool, a SWOT analysis is only as good as the information that makes it up.

Apart from the cyclical slump in employment, the industry has lost more thanhourly jobs since see Figure Based on MVMA Indirect employment is also generated in industries connected to the assembly plants.

The GAO reported that 4. Thus, estimates for vehicles per worker range from 6. Page 97 Share Cite Suggested Citation: Thus, the displacement of one U. It is impossible to predict precisely what the impact of these new operations will be.

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It appears probable, however, that they will rely in part on imported parts and components and will be more productive than their U. Further inroads by Japanese brands, whether imported or locally assembled, will reduce U.

Productivity gains will also reduce labor needs. FIGURE Net vehicle output sales of new cars and used cars per worker in constant dollars and autos per worker. Employment is that in U. In its presentation at the committee's meeting on Maysee Appendix Fthe UAW estimated that for everytovehicles imported, 30, jobs in assembly plants and supplier companies would be lost, or roughly 7 to 8 jobs per car.

On December 18,General Motors said that this would reduce hourly employment by 15, people in and each year through the mids Frame, Attrition, according to General Motors, cut hourly jobs by 25, in Page 98 Share Cite Suggested Citation: In addition to having more cars to sell, Japanese manufacturers followed a logical particularly considering the import quotas path of product evolution, capitalizing on the comparable advantage that was available to them as producers of small cars under the CAFE system see Chapter 9.

They moved upmarket into larger and more luxurious models by the late s.

Automotive Industry Analysis - Cost & Trends

The extension of Japanese product ranges into market sectors that provide the bulk of domestic industry profits—mid- and full-size cars and light trucks—has made the Japanese a greater threat to domestic industry profitability in the future than it has been over the past 10 years.

For example, although the Honda Accord and Toyota Camry were initially introduced as compact cars, both have increased in size and luxury features and are currently classified as midsize cars. The Japanese producers have also fragmented the U.

Today, the American consumer can choose among approximately nameplates of cars and light trucks, compared with only 10 years ago. The Japanese, on the other hand, have very efficient, flexible plants capable of producing several models and of adjusting to changes in the marketplace Womack et al.

As a result, the Japanese automakers have evolved from an initial strategy when they first entered the U. This strategy has enhanced the threat they pose to the domestic manufacturers.


Product Development The Japanese automakers also have a more efficient product-development process than their U. Whereas it takes U. Moreover, the product-development effort requires 3 million person-hours in the United States, in comparison with only 1.The automotive industry is the industry involved that is in the design, development, manufacture, marketing, and sale of motor vehicles.

The automotive industry is a great candidate for social media and online communities in particular. Some common factors are political, economic, social and technological (known as PEST analysis). Companies also study environmental, legal, ethical and demographical factors.

Companies also study environmental, legal, ethical and demographical factors.

The US Auto Industry in Five Forces to Consider - Automotive Industries

In , the automobile industry is expected to see a growth rate of around 9%, with the disclaimer that the auto industry in India has been hit badly by the ongoing global financial crisis.

The automobile industry in India happens to be the ninth largest in the world/5(13). Will Generation Y Change How The U.S. Auto Industry Does Business? (Editor's Note: The author of this article is with J.D.

Power and Associates, an entity also owned by McGraw Hill Financialbut operated independently of Standard & Poor's. The opinions expressed are the independent opinions of J.D.

Power . The socio-cultural factors and consumer preferences also have a major and direct impact on the auto industry.

An analysis of the factors influencing the shifts in buying power in the auto industry

However, above all it is the emergence of the new markets that has affected the intensity of competition in this sector.

The industry, however, also faces far broader challenges. Demographic shifts, the rise in power of the emerging markets and changing customer behaviour will all help shape the sector’s longer term future.

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