...Synopsis Ford is working to change its marketing strategy for developing compact cars. The Focus is Ford’s most popular economy car, and for years has been a low cost, reliable car. Ford is now beginning a new stage of the Focus by now offering the car with numerous additional features, resulting in a luxury car feel with the same Ford logo. With the rise in gas prices, and the current economy climate, Ford foresees a push from larger vehicles to smaller cars. This change in consumer preference stems from the superior gas mileage and reduced ecological footprint that compact cars provide. Currently, Ford markets the Ford Focus to the United States and the European market. The cars that they make for each market are different based on consumer preference. The current Ford Focus selling in the United States is more economically friendly, with the base model having a very affordable starting price. In comparison, the current Ford Focus found in the European market has additional features not found in its counterpart, but at a higher price. The 2012 Focus will have the ability to satisfy many different classes of people from its base model, the S, to the top of the line luxury found in the new the Focus Titanium trim package. By manufacturing the Focus for both the U.S. and the European market in Wayne, Michigan, Ford will save a plethora on development costs. A $28,090 price tag for a fully loaded 2012 Ford Focus sedan may discourage some consumers. However, one must consider...
Words: 1960 - Pages: 8
...the Australian car industry after World War 2? The Australian government gave protection to the car industry after World War 2 as the government thought that the car industry, an infant industry, was critical to the future needs of the Australian defence force. Protection could, for example, increase economies of scale to promote efficiency, decrease costs and allow the industry to become internationally competitive in building vehicle engines and producing motor vehicle parts after the war. Also, cars were symbolic of Australia’s ability to become a fully industrialised developed country as cars represented modernity and wealth. Furthermore, the Australian government thought that a successful car industry would allow the economy to develop skills that were crucial to the future of the Australian economy and in previous instances, the car industry has always managed to prosper. However, there has been no form of evidence to support that statement. 2. Give reasons for the decline in Holden’s share of car sales in Australia from over 40% in 1958 to 15.2% of total sales in 2006 and finally the shutdown in 2017. What impact will the shutting down of Holden have on the economy? Since Australia’s car industry has been heavily protected by tariffs and government subsidies, it has effectively given the domestic car industry an artificial advantage over foreign competitors such as Toyota. This has led to an inefficient and uncompetitive domestic car industry in the long term...
Words: 682 - Pages: 3
...years in China, we can see more and more American car driving on the street. People choose the United States car because of the good quality, and U.S. auto manufacturers are also designed a lot of beautiful cars for the Chinese market. However, U.S. carmakers know that the most important market is not China, for whom the most important market is the United States. American car companies made cars sold in the U.S. and only a part of the vast majority of exports, although it was noted that Japanese cars are very popular in the U.S; however, most Americans still choose the American car. Why? Because Americans think that the U.S. auto industry is very important, and to buy American cars means provide a support to the automotive industry. Began in the 2008, the financial crisis brought the U.S. economy a lot of negative effects, and most of American people put their hopes of economic recovery on the automotive industry. Because they believe that recovery in the automotive industry will drive the revitalization of other industries. There is no doubt that the U.S. auto industry and economic development are closely linked, and is very important for the U.S. auto industry. Why the automobile industry is so important to U.S economic development? The United States is one of the world’s most developed and richest countries, and the U.S. auto industry has long been an important support to the country’s development. Automobile manufacturing industry in the United States has a long history, and...
Words: 2436 - Pages: 10
...performance fully electric vehicles, advanced electric vehicle, powertrain components and stationary energy storage systems. Political, economic, socio-cultural and technological factors have influenced Tesla in complex ways since Tesla is a big player in the EV industry – one of the non-traditional automobile industry segments. The political factors have mostly favored Tesla since the government gives subsidies, tax rebates for EV manufacture. The general economic growth in the US economy have favored Tesla but decreasing oil prices and increasing labor prices have acted as threats to Tesla. The go green concepts have favored Tesla but unfamiliarity around the EV technology have posed threats to Tesla. However, limitations by way of battery technologies and charging of batteries have posed threats to Tesla even though technological developments are taking place in the EV industry around battery and charging technologies The overall threats of micro forces is medium based on porter’s 5 forces analysis. The threat for the substitutions is high and threat from rivals is medium due to few rivals who can match the quality of Tesla cars. There seem to be least threats from suppliers since they are not specialized in EV industry and buyers due to direct sales. More details are provided in exhibit 2 as given below The company has established a good value chain by its own network of sales and service centers and Supercharger stations globally to accelerate the widespread adoption of...
Words: 5754 - Pages: 24
...Project II Class: ECON545 4/12/2011 Introduction to Situation The paper analyzes and summarizes how the automotive industry is impacted by the macro economy. In helping my friend Rick expand his small manufacturing plant that produces parts for the auto industry, I’m going to identify a brief history of the automotive industry, how it impacts the GDP, the unemployment rate, and the inflation rate as measured by the Consumer Price Index (CPI). The supply and demand of the automotive industry as well as the profits derived from the sector are clearly impacting by then macroeconomic policies. The industry’s history demonstrates the trends it follows in the business cycle and how economic indicators have impacted the performance of the industry over the years. The measure of production, interest rates, real GDP, automotive sales and inflation and unemployment are some of the most compelling instruments that can be used to assess the state of the automotive industry. Business Cycles The U.S automotive industry saw a steady expansion from its inception until 1978 in which where production reached its all-time peak. The industry showed a small contraction and a quick recovery leading to its peak between 1972 and 1976. In the early 1980 there was a big drop in production units and the industry fell into its first true recession. The industry recovered in the mid 80s peaking in 1988, but never reached its previous high before falling into another recession that lasted...
Words: 2902 - Pages: 12
...automobiles. Cars have become a big part of the society today. The population in some areas of the world is changing. Because we are in the 21st century, we live in an urban lifestyle. People need to work in order to earn a living. Children go to school to acquire knowledge. Automobile industry is one of the most important industries in the world. It provide jobs for millions of people, generates billions of dollars in worldwide revenue. Automobiles have also revolutionized transportation in the 20th century, changing the way people do business and travel. Although automobiles are significant, we should ask the question what are the negative effects of owning one? Of course they are useful to us. In addition, owning an automobile contributes to the everyday life of an individual. However, there are many dangers of owning a car in which industries do not care about. They tend to care more about themselves and the profit they will make by selling their product. Production of automobiles have great effects on people and the environment because it causes pollution such as air that hence, leads to serious health effects. It also leads to depletion of natural resources, and the ozone layer. They also use unrecyclable parts to manufacture their product. In addition, the auto industry contributes to the decline of the global economy. Firstly, automobiles play a major role in creating pollution to the environment. Cars are the largest contributors to air pollution. Use of cars leads...
Words: 1554 - Pages: 7
...Threats > Singapore has a excellent transport system, which is a much more cheaper service with the recent reduction of bus and train fares. > The off peak car scheme gives Singaporeans more ability to own a car. > There are low taxi fares in Singapore > The private car rental scheme allows car owners to rent out their vehicles. > Singapore is only a small country making it much more efficient to use public transport rather than renting a car to only use for short journeys. >Petrol prices rise’s Opportunities >Owning a car in Singapore requires high maintenance costs, Certificate Of Entitlement, cars also rapidly depreciate. > climate change and the impact to the environment cars have, provides a chance to introduce more eco-friendly cars ,with technology evolving and there being a larger and superior range of eco-friendly cars Weaknesses > There are high maintenance cost for the cars and they are required to purchase new cars regularly. > The price to hire a car is much greater than public transport. > There are many other Car Rental service’s who provide the same services that Avis does. > Competitor Comfort Delgro has a larger fleet of cars, with over 1,400. Strengths >Has a strong brand identity that is known throughout the world. >Avis is said to have strong performance in pricing...
Words: 1885 - Pages: 8
...Corporate average fuel economy: What society really need Bohao Wu The average gas mileage of new cars and trucks will have to nearly double by 2025 under regulations finalized by the Obama administration. The new rules will require car companies to average 54.5 mpg across their fleets in 13 years, which stayed at 27.5 mpg for 21years before it increased slightly a year ago. Because few vehicles come close to that level of performance today, the new rule sounds overly ambitious or even impossible at the first blush. Once you dig a little deeper, the rules will make sense for various kinds of reasons. From my perspective, the corporate average fuel economy (CAFE) benefits the society. The fuel regulations should be enacted. First, the new rule will help the United States deal with the climate changes. Gasoline is one of the main parts of fossil fuel that produces carbon dioxide. Carbon dioxide is also part of greenhouse gases, which will influence the environment of the earth deeply. The CAFE requires vehicles to promote average gas mileage; tailpipe emissions from cars and light trucks will be halved by 2025. Second, raising the efficiency of U.S. vehicles will enhance national security. President Barack Obama said the new fuel standards "represent the single most important step" his administration has taken to reduce U.S. dependence on foreign oil. Despite rising domestic crude production, 40% of our nation’s oil is imported from foreign countries...
Words: 962 - Pages: 4
...Question 1: What are key forces in the general and industry environments that affect the U.S. auto industry, and General Motors? In order to find out key forces in the general environments that affect the U.S auto industry, we divide the general environment into six segments: demographic, sociocultural, political/legal, technological, economic, and global. Then, we use Porter’s five-forces model to examining the competitive auto industry environment and then find out key forces that affect General Motors. In general environment * Demographic: Aging workforce (and high number of retirees) means higher hourly wage and health-care costs for current workers, and higher expenses related to retirees. In addition, as the baby boomers generation gradually retired, U.S auto industry starts to change their target market to the next generation. * Sociocultural: more concern for environment, looking for more efficient (smaller) vehicles, but generally want quality, "cool" smaller cars. * Political/Legal: Inflated costs and low profit margin informed large debt in GM, so it required large loans from government. In the law, government * Technological: People more concern about the “green environment” and fuel efficient, such as the electric cars or hybrid car. However, it is always slow to develop and deliver to market electric/hybrid vehicles. In general, development of new models has been slow, expensive, and ineffective for some time-not as nimble as competitors such...
Words: 1318 - Pages: 6
...Self-driving cars will eliminate millions of jobs of people who work in the auto industry, but it will also create many jobs for those same people who lose those jobs (I have 2 sources here; how do I cite them?). There are many taxi drivers, delivery trucks, and bus drivers who make a living off of the auto industry, and self-driving cars would replace all of their jobs (Strassburger). Driverless cars will also hurt the economy because, with safer driverless cars, 90% fewer accidents, that results in 90% cost in claims and reduced the auto insurance industry from a $200 billion industry down to $20 billion. This will push out room for the larger insurance firms. In short, insurance premiums will decline because of lesser accidents and thus...
Words: 356 - Pages: 2
...(i) Labour intensive industry refers to industry that requires substantial amount of human labour to produce industrial products. For example, in Australia coal mining is one of the labour intensive industries. According to Australian Coal Association (Coal & the Community), black coal mining is one of Australia’s most important industries that creates employment, low-cost fuel and important source of export revenue. (ii) Coal mining industry is labour intensive because this particular industry requires a large number of human labours to run heavy machinery and work in large factories to produce the goods. (iii) Economies of scale is where the long-run average cost declines as production increases in simple explanation where a manufacturing company saves money as its produce higher quantities of its product. In this case, mining industry are likely to develop economies of scale because it has the ability to mass produce products. (iv) In coal mining industry in Australia there numbers of firms in mining industry, however there are four major companies that dominates coal mining industry – Rio Tinto, BHP Billiton, Xstrata and Anglo American – together account for well over half of total Australian black-coal production. b. (i) Capital intensive industry refers to industry that requires substantial amount of capital in the production of goods. In Australia one of the capital-intensive industries is automotive industry. (ii) Automotive industry is capital intensive because...
Words: 1025 - Pages: 5
...Introduction The automotive manufacturing industry began in the late 1800’s and has undoubtedly changed mankind forever. General Motors Corporation is one of the leading automotive manufacturers in the world. GM is a corporation that designs, builds, and sells cars and trucks. GM owns 18 brands some of which include Chevrolet, GMC, Cadillac, and Buick. The company operates in 160 countries, employs roughly 207,000 people, and is one of the world’s largest vehicle manufacturers (IBIS World, 2015). The automotive industry in the United States is worth $123 billion and has $5.2 billion in annual profit (IBIS World, 2015). It is spread across 3 main competitors. Toyota Motor Corporation, which holds 17.5% of the market share, General Motors Corporation, which holds 16.3% and Ford Motor Company, holds 11.3% of the market share in this industry (Mergent Online, 2015). Over the last 5 to 10 years the automotive industry in the United States has continuously fluctuated. As a result of the economic downturn, GM filed for Chapter 11 bankruptcy in June of 2009 and was bailed out by the U.S. government. During the Chapter 11 bankruptcy, GM eliminated about one-third of its plant assets and workforce and reduced its debt from nearly $95 billion to $17 billion. GM has bounced back tremendously, by releasing brands such as Saturn and Hummer in an effort to cut costs, and in 2014 the company made $152 billion in revenue (Mergent Online). Other automotive companies have struggled...
Words: 2381 - Pages: 10
...INFORMAL LABOUR MARKETS AS A SOLUTION FOR UNEMPLOYMENT IN SOUTH AFRICA – A CASE STUDY OF CAR GUARDS IN BLOEMFONTEIN1. P F BLAAUW Department of Economics Rand Afrikaans University L J BOTHMA Independent Labour Economist ABSTRACT The car guard industry in South Africa evolved out of the plight of the unemployed. Very little research has been done on the industry in South Africa. The first objective of this paper is to address the lack of research and the second is to determine whether the car guard industry can provide a solution to the problem of unemployment. Car guards involved in this study were found to be generally low skilled, earning low income and working under harsh conditions for long hours. The majority of them held formal sector employment before becoming unemployed. Car guarding is not a solution to the plight of the unemployed. Training and skill development supplemented by accelerated economic growth are vital to bridge the gap between the formal and informal sectors. OPSOMMING Die motorwag-industrie in Suid Afrika het onstaan uit die lot van die massa werkloses in die land. Weinig navorsing is al oor die industrie gedoen. Die doelwit van die referaat is eerstens om die gebrek aan navorsing aan te vul en tweedens om te bepaal of die motorwagindustrie ‘n oplossing vir die probleem van werkloosheid kan bied. Motorwagte in die studie is oor die algemeen laag geskoold, swak besoldig en werksaam vir lang ure onder moeilike omstandighede. Die meeste het...
Words: 4514 - Pages: 19
...automobile industry Bing Bai St. Thomas University Feb 20, 2013 Author Note Bing Bai, Department of Business, St. Thomas University This research was supported in part by a grant from the BUS 673 management writing & reporting class. Correspondence concerning this article should be addressed to Bing Bai, Department of Business, St. Thomas University, 16401 NW 37th Avenue, Miami Gardens, FL 33054 Contact: b0771276@stu.edu Introduction 2009, by the impact of the economic downturn in North America, the auto market is also showing a downward trend, the U.S. auto market, sales reached bottom in recent years, a decline of more than 20%. With the slow recovery of the economy in North America, as well as various stimulus policies play a role, so that the downward trend in remission. In 2010, total sales of U.S. automotive (car, SUV, MPV, pickup truck) reached 11,590,274, an increase of 11% year-on-year, U.S. vehicle sales remained year-on-year growth of 11% in January-July 2011. Undergo the shrinking of automobile market, although the United States rely on to curb the momentum of a sharp decline in the automotive market policy factors to a certain extent, the government "TM" subsidies just one pin short-term cardiac and unable to drive the stable recovery of the automotive market. The decline of the Big Three, but also to the global automotive industry, the...
Words: 4504 - Pages: 19
...CASE Notes Case 5 – The Global Auto Industry 1: Analyze the competitive structure of the automobile industry in the United States. Is this attractive industry? (This question requires you to use Porter’s five forces to analyze the competitive structure of the US automobile market. Your analysis should include bullet points or detail under each of the following categories.) * Entry Conditions The barrier of entry for the automobile industry in the United States is extremely high for a brand new company. The industry is already ruled by highly competitive gigantic corporations from different countries that have been around for a long time and have been implementing market research, various car designs, quality control, efficient manufacturing and logistics strategies, etc. The production of a new car requires a high sales volume to return profits over the fixed costs of developing it. To achieve high sales volumes, customers have to trust or be interested in a new brand which is difficult to achieve where most of the demand is pleased by the current competitors. On top of that, a new company has to build expensive factories to be able to make enough cars to make a profit with the risk of not even selling them all, and losing more money by having to cut car prices to increase sales. Basically, economies of scale are extremely important in this industry, so a beginner needs huge capital to be able to start competing, then they have to battle...
Words: 2009 - Pages: 9
