...Economic Impact of SUVs The SUV (Sports Utility Vehicle) is one of the most popular types of vehicle to both own and drive. Last year, SUVs and minivans outsold conventional cars for the first time. During the 1990s, sport utility vehicles (SUVs) became the fastest growing segment of the auto industry. Generally larger and heavier than the typical automobile, SUVs require more fuel and produce greater amounts of toxins. Although buyers believe that SUVs are safer than automobiles, which they are in some cases, SUVs are more prone to roll-overs than are automobiles. With sales projected to grow to over 3 million units per year in 2001, SUVs show no sign of decreasing in popularity. However, the SUV is increasingly coming under attack for its fuel economy. The retail gas prices rose to just over $4 a gallon. Sales of large SUVs were affected more than any other vehicle, and their resale values dropped like a rock. In this paper I would like to talk about: why people want to buy SUVs? What impact does the lower fuel economy of SUVs have on the economy? What is the new fuel economy policy by the government? What impact does the safety record if SUVs have on the economy? Sport utility vehicle (SUV) is a vehicle similar to a station wagon or estate car. Early SUVs were used in military and commercial purposes, Jeep and Land Rover were used in the WW2. Chevrolet Carryall Suburban was the first SUV came out in 1935, but it’s only a RWD. SUVs became popular in the United States, Canada...
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...susceptible to market shifts. The company also faces brand dilution because of cultural differences between Volkswagen and Porsche management. The brand faces United States government regulations for gasoline efficiency which could impact the US market significantly. Porsche has great brand recognition and is known throughout the world as a highly valued racing organization. The company has differentiated itself as an innovative company that competitors find it hard to imitate due to its technology and heavy capital investments (Hitt, Ireland, and Hoskisson, 2013). When the economy takes a downturn the high cost of capital can have a negative impact on Porsche’s ability to acquire funds it needs to innovate and stay at the top of the industry in technology. The brand is exclusive with only a few diverse product offerings to a wealthier clientele. Though Porsche was an independent care maker for over 100 years, when the financial crisis hit a lack of capital led to Porsche being taking over and becoming a part of the Volkswagen platform (Hitt, Ireland, and Hoskisson, 2013). Though the VW platform gives Porsche a broad range of resources for both companies many may see it as a possibility of diluting the brand by expanding into sedan and SUV models. Porsche is seen as high quality sports car in a very niche market. The Volkswagen group is pushing higher sales volume, but the question comes at what risk is this to Porsche’s differentiated product offering quality. Porsche’s...
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...Market Summary For many Americans, Sport Utility Vehicles (SUVs) have grown to replace mini vans or station wagons as the prevalent family car. This industry has faltered recently with the emergence of Crossovers, which combine aspects of cars and SUVs, as well as because of increased government emissions regulations and increased environmental consciousness. SUVs have become synonymous with low fuel economy and high emissions. Still, SUVs maintain an important market presence for buyers searching for vehicles that combine luxury and comfort with utility. In particular, the Jeep brand of Chrysler Group LLC has a significant presence in the market as a result of being dependable and refined as well as rugged. In order to expand the market presence of the brand, Jeep will move forward with the creation of a hybrid Jeep. The desirability of the Jeep brand will be increased while also maintaining the core values that Jeep aficionados have come to expect. Target Market The new hybrid Jeep will be marketed towards current Jeep and SUV owners. In addition, the hybrid Jeep market will be expanded to buyers concerned with the environmental impact of their automobile purchase. With rising gas prices, it will be important to focus on a market of buyers looking for increased fuel economy. This may include drivers with a long commute, drivers and their families looking to save money, or drivers looking for a more spacious vehicle without a large price tag over the long...
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...different industries. The auto industry was one area that was particularly affected mainly because they have been having so many problems in the years leading up to that point. The phrase “bigger is better” reflected the popularity of many vehicles sold throughout the 1990s and early into the new millennium. Big, hulking SUVs dominated the streets and highways in all parts of the country. This idea started to change as fuel prices started to rise. People then started to realize that the large cars they had taken such pride in at one time were becoming more and more expensive to own as it cost more to fuel and maintain them. The industry shifted to smaller, more fuel efficient models in order to save money. Background – “Give me more. Bigger is always better. Everything is bigger in Texas.” Sentiments like these do well to describe the thinking of American’s as a culture. We like big houses, big meals, big TVs, and big cars. “The trend toward more powerful engines, the shift to trucks and greater luxury, offset the technical gains that we've made in fuel economy," said John DeCicco, a senior associate for the American Council for an Energy Efficient Economy, a nonprofit research group that has become a lonely voice of conservation these days. (Peters, 2005) Mr. DeCicco’s comments in an article written back in 1995 highlight the increased demand for large cars during that period. He states “Call it Cherokee madness or Bronco fever.” One symptom was that many drivers said...
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...rid of the suv line as global markets show there is a growing market in emerging markets like the pacific Asia the middle east and some African countries where the terrain and roads are more conduce and the price of fuel has little barring on individuals. Also in these parts of the world an average house hold has six to eight people so in terms of passenger mobility the suv line would serve as the best option as opposed to having multiple smaller cars. Smaller cars depending on the engine size but I would make the assumption our fuel-efficient cars would compose of a 4-6 cillinder egines would be much more easier to drize on the roads and be more economical on the road. The smaller car also is easier to park around town and the average house hold in terms of insurance and fuel economy and what system we fit in the car is irrelevant as the price would be determined by that. By phasing out the most profitable arm of the business the company is taking a huge risk of losing its cash from a financial point of view making more fuel efficient cars at the expense of the flagship is a very big gamble I would not recommend. Also in most cases we have to look at the worlds emerging markets who are not ready for hybrid cars. Some companies are taking the approach of making suvs hybrid and this could make the car more eco friendly I would suggest rather than phase out the flagship suv models it would be better to make hybrid more eco friendly cars as they make the same impact as smaller...
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...to grow to 106 million vehicles in 2018 at a 5.2% CAGR in the period (PwC, 2012). The major contribution to this growth will come from emerging markets, with 84%, with the BRIC2 countries alone representing 64%. The Automotive industry is still a very concentrated market, where the top 12 manufacturers represent 83% of the units assembled in 2011 (PwC, 2012). Despite this market structure, there have been a few new entrants, such as Tesla Motors and BYD, both electric car manufacturers. In Table 1, an analysis of the Automotive market environment is presented. FACTORS Political COMMENT IMPACT ON DEMAND/SUPPLY Governments and municipalities interest in green vehicles Positive for green product lines Disposable income Growing wages in developing countries, growing middle class with purchasing power Positive Low interest rates in developed economies Positive Currency fluctuation Loss of competitiveness due to strong currencies (Dawson & White, 2012) Negative for Japanese /Brazilian Lifestyle changes Approach to Western lifestyle in developing countries, demand for low-end cars (Ayres, 2012) Positive Green issues Global awareness regarding pollution Positive R&D expenditures Available market space for innovation, both incremental and breakthrough Positive New technology adoption Technological Negative for global companies Interest rates Socio-cultural Governments impose strong import taxes...
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...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 as Toyota * Economic: Although the economy affects all industries, from suppliers of raw materials to manufactures of finished goods and services, the large expensive products such as cars which are related to many stakeholders would suffer greater impact. Thus, the U.S and global economy affects GM and entire auto industry. The credit crisis made consumers lose confidence in the economy...
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...power of a horse when you rode it? Imagine a herd of horses as they run through an open plain. You do not want to ride a herd of horses on the street, now you just need the new 2014 Dodge Durango. In this planner, you will be seeing, imagining and experiencing the unique way Dodge advertises using lower cost but still attracting more potential consumers of Dodge brand and Paramount Pictures, also you will get the information about the new Dodge Durango. "But for the most part, the Durango remains a stylish, aggressive-looking truck with available V-8 power, plenty of towing ability, and some new fuel-economy technology lurking behind its menacing face." -- Car and Driver The Dodge brand is upping the ante in the fast-growing full-size sport-utility vehicle (SUV) and crossover segments, introducing the new 2014 Dodge Durango at the 2013 New York International Auto Show. This new SUV is built on the Dodge brand's pillars of performance, style and innovation, delivering a new standard state-of-the-art...
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...to start trimming down the losses the management must first find out where the leakage is greatest and then decide which area needs to be downsized first. The decision could be made to shut down plants in North America to only find out the company is still experiencing great loss in the PAG. What exactly are the costs involved in buying out the union workers? Are we prepared to deal with possible strikes and the negative media coverage? How would employee morale be affected by this decision? If the workers decide to go on strike then production would slow down which would create financial loss. Negative media coverage could result in consumers moving away from the brand and going over to the competition. Have we made a significant impact in the luxury car industry? How much money have we invested in this group and how much have we lost as a result of this investment? Where can these dollars be better allocated? Ford was built on simple products for the average American family. The decision to move away from the luxury car market could allow us to gain a greater market share in the eyes of the mainstream consumer again.2.In light of the possibility that market conditions can and do change, discuss at least three examples of how the company should build-in flexibility to back-up its decision-making process. One example of how the company should use flexibility to back up its decision making...
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...(£50bn) over four years, as part of the Obama administration’s plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government. GM sold its good assets to a new, government-owned company. Federal government took a 60 percent ownership stake in the new GM. The Canadian government took 12.5 percent, with the United Auto Workers getting a 17.5 percent share and unsecured bondholders receiving 10 percent. (Isidore, 2009) There is a serious of issues existing such as demand shift and uncertain energy policy, high financial burden incurs from legacy cost, failure in innovation and hyper competition that lead to GM‘s bankruptcy. The bankruptcy of GM not only impact on their shareholders but also the employees and consumers are involved. Impacts of the collapes Concerning with the employees of GM, the collapse leads to unemployment. GM shed its Pontiac, Saturn, Hummer and Saab brands and cut loose more than 2,000 of its 6,000 U.S. dealerships by...
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...SUVs, the Environment, Safety, and Stakeholders The Evolution and Devolution of the SUV Market In 1990, the SUV/Light truck market consisted of approximately 4 million units sold out of 14 million total vehicle sales in the United States. By 1999, the percentage of the total market had increased and total sales were higher. SUVs/light truck sales were 8.2 million of 16.4 million units sold.21 47.6 percent of Ford Motor Company's sales are of SUVs, primarily its Ford Explorer and larger Expedition, but also of its even larger Excursion. These vehicles took the place of the truck-like Bronco and smaller Bronco II. The largest players in the SUV market (with the number of units sold in 2000) are as follows: 22 [pic] In 1997, most auto manufacturers expanded their SUV offerings and entered the luxury SUV market. These SUVs, with prices around $50,000, featured in-vehicle televisions and VCRs, leather interiors, and all the amenities of luxury cars. The new market entrants are listed below: [pic] By 2000, the U.S. segment of the luxury SUV market was 80.5 percent.23 At that time, SUV purchases constituted one of every five auto sales in the United States and were the highest-margin products in all the automakers' lineups .24 Profits per SUV averaged $ 10,000 per unit. Profits on the Ford Excursion were at the top of the field at $18,000 per unit. At that time, SUVs comprised 20 percent of all of Ford's vehicle sales and accounted for the majority of Ford's...
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...Microeconomics In My Daily Life Throughout my life, I have always been reading and hearing about economic issues and concepts, but I never thought about the impacts of economic models on my personal life. Before learning about microeconomic concepts, I always thought that a course in the field of Economics, would teach me theories that only apply to the economy of a nation as a whole and not to an individual’s life. However, there were a lot of concepts throughout this course that I found relative to my personal life. Among all the concepts that I have learned in the Microeconomics course, “Opportunity Cost”, “Sunk Cost”, and “Supply and Demand” have the most impact on my daily life. “Choice and Opportunity Cost” is one of the most important concepts of Microeconomics that I found it relative to my everyday life. Similar to many other students, limited time during the school semester, forces me to make choices about what to study, when to study, and how to estimate the opportunity cost of every choice. Applying opportunity cost concept in my day-to-day life helps me better schedule my study time. For instance, I usually choose to study during weekdays because the opportunity cost of studying on these nights is lower than studying on Friday or Saturday nights, when usually more exciting events are happening. On the other hand, if my alternative on weekend is to stay home and organize my closet and do my laundry, I would choose to study, because to me, the value of studying...
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...Unit 2 IP MAKING IMPORTANT DECISIONS AS A SENIOR MANAGER Carol Leader AIU Online Abstract Formulating sound choices requires a logical approach. Using an organized approach as a senior manager to create a constructive environment, having a backup plan in place, and being able to go with the alternate plan, quickly in the event plan A is not a workable one or flaws have been discovered. Senior managers need to know what the right course of action to take, how and when to communicate a decision the approaches to carry out the plan. As a front line senior manager it is important to have an understanding of the effects of good decision making learning from past experiences and the reactions of the company’s CEO, CIOs, stakeholders and other upper management personnel. It is equally important to know subordinate team members that will be carrying the tasks to make the project successful. The front line manager is able to analyze the effect of decisions in specific situations and make necessary adjustments in terms of productivity of the team members. Assumptions Taking something for granted is an assumption. An assumption can be a statement this presumed to be true, but does not have concrete evidence to support it. Assumptions can be very dangerous with research to support critical thinking. Assumptions enable companies to plan and make decisions in uncertain situations. Basically assumptions are wishful thinking. Traditional business forecasting is based on...
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... ➢ Economic Environment 6 ➢ Cultural/ Social Environment 7 ➢ Government Environment 8 ➢ Technology Environment 9 Company Objectives 9 Target Segment(s) Profile 11 Market Strategies 13 ➢ Figure 1.1 21 Resources 25 Marketing Plan Group Assignment The Executive Summary Ford Motors, through the past five years or so, have been experiencing difficulties with their significantly present decline market share. Being a dominate player in the auto business for over a century, Ford Motors have been reluctant to keep up with current trends and evolving competitors from growing economies. Considering the company’s external and internal opportunities, and directing their resources towards a more skillfully R& D (research and development) department would be the first step to recovering this remarkable loss. Applying this strategy to current trends and innovating vehicles leading us in the direction of hybrid technology. When evaluating our strengths and weakness and applying them to the current opportunities while considering our threats, we thought of creating a product responding to the growing environmental...
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...Econ 1 Professor Carter December 12, 2011 Microeconomics In My Daily Life Throughout my life, I have always been reading and hearing about economic issues and concepts, but I never thought about the impacts of economic models on my personal life. Before learning about microeconomic concepts, I always thought that a course in the field of Economics, would teach me theories that only apply to the economy of a nation as a whole and not to an individual’s life. However, there were a lot of concepts throughout this course that I found relative to my personal life. Among all the concepts that I have learned in the Microeconomics course, “Opportunity Cost”, “Sunk Cost”, and “Supply and Demand” have the most impact on my daily life. “Choice and Opportunity Cost” is one of the most important concepts of Microeconomics that I found it relative to my everyday life. Similar to many other students, limited time during the school semester, forces me to make choices about what to study, when to study, and how to estimate the opportunity cost of every choice. Applying opportunity cost concept in my day-to-day life helps me better schedule my study time. For instance, I usually choose to study during weekdays because the opportunity cost of studying on these nights is lower than studying on Friday or Saturday nights, when usually more exciting events are happening. On the other hand, if my alternative on weekend is to stay home and organize my closet and do my laundry, I would...
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