The Automobile Manufacturing Industry



The Automobile Manufacturing Industry

Thesis Statement

“The Porter's six force models help in identifying the competitive environment of the global automobile industry in different markets”

Introduction

The automotive industry is involved with the design, development, manufacturing, advertising, and selling of auto cars and vehicles. In 2006, more than 69 million vehicles, including cars and commercial vehicles were produced worldwide. In 2006, more than 16 million cars were sold in the United States, over 15 million in Western Europe and about 7 million in China. In 2007 a stagnation has been observed in the markets of North America, in Europe and Japan, while growth occurs in the markets of South America, especially Brazil, and Asia, in South Korea and India.

The automotive industry produces cars to aid in shifting and /or transport of people, goods, or services. Currently cars are among the goods of greatest need, expanding its relevance to many fields of human nature. The automobile today is for many a symbol. In theory, people choose vehicles of necessity. However, the automotive industry has realized that the vehicles could have higher or lower demand due to its appearance.

Discussion

The rapid and continuous expansion of world's automobile market and the total dimension of the continuous expansion of the international status of global auto market are significantly capable of improving in the coming period (Kale, 2007, pp. 70). The car sales accounted for the proportion of the global total car sales, has increased by 4.3% to 8.1% during the last few years, as the total demand reached about 5.75 million annual cars. China has become the worlds second compared with U.S and Japan who are the largest automotive consumer market. Global annual incremental car sales in China accounted for about 25%; after U.S and Japan, China has become the main force driving growth in the global automotive market (Kale, 2007, pp. 70).

Porter's Six Forces Model Analysis - Automobile Industry

The Six Forces Analysis model was proposed in the early 1980s by Michael Porter. The model was established to analyze the global and far-reaching impact on corporate strategy formulation. Moreover, the model helps to analyze the competitive strategy and analysis of the customer's competitive environment (Porter, 2008, p.86). Porter's six forces analysis of the microenvironment analysis belongs in the external environment analysis, which is mainly used to analyze the relationship between the enterprise competitive landscape of the industry as well as the industry and other industries (Porter, 2008, p.86).

Condition and strength of six basic forces of competition determines the intensity of competition in the industry, which establishes the ultimate profit maximization as well as the flow of capital to the industry. All of this ultimately, determines the ability of enterprises to maintain a high income. A viable strategy proposed should first confirm and evaluate the six forces, different power characteristics and the importance of the industry and the company's different, the significance of Porter's competitive model, six competitive forces struggle contains three types of thriving thinking in strategic complexes: strategy for cost leadership, differentiation, and ...