The
automotive industry is one of the largest manufacturing industries in the terms
of value not just on USA but many other countries and regions. The trend of
consolidation has been witnessed in the regions where automotive industry is
well established. Major production is met by large corporations and enterprises
that have virtually eliminated the small players in the industry and thus
rendering the competition stiff. The reason for this trend is the requirement
of heavy investment for mass production. Small corporations lack funds whereas
on the other hand large enterprises over decades of their operations have
accumulated large resources which are now being put to use to manufacture cars
in mass numbers thereby achieving economies of scale as well. Since the large
enterprises can produce these goods at competitively lower prices which gives
them a commanding edge over small players. Market shares consist of groups of
brands rather than individual groups. For instance – Volkswagen group consists
of various brands such as Volkswagen, Audi and Skoda.
According
to the study, ‘New
Cars Global Industry Almanac 2 2013-2022’, the new car manufacturing
industry includes sales or registration of new passenger cars. The passenger
cars market is divides in different segments. This includes hatchbacks,
saloons, SUVs, 4X4 and other related vehicles. The future of this industry
holds many opportunities for the companies. The first is the gaining influence
of crossover vehicles. People currently prefer to have the comfort of SUVs
coupled with the fuel efficiency. Hence, companies are focusing on producing
crossover vehicles which requires huge amount of investment especially in the
R&D segment. Internet of Things and connected devices have made their way
into the automotive car market segment, while the technology is still new
however, its adoption rate shall be high during the coming 5 years. Cloud
technology has been incorporated recently in the car manufacturing market. This
has allowed the designs, planning, operations to be comparatively higher. The
3D printing technology has changed the entire landscape of this industry. This
technology was first deployed by Urbee which was later perfected by local
motors when it launched strati. Some other trends that have come up are the
increasing production of electric vehicles as well as the autonomous vehicles
which are being perfected by technology giants as well as car manufacturers. The companies that have a stronghold in the
market are Suzuki, PSA groupe, Fiat Chrysler Automobiles, Honda, Ford, General
Motors, Hyundai, Renault-Nissan, Toyota, and Volkswagen. All of these companies
are functioning for decades long while some have operated for over a century.
These companies have the most of the entire market segment under their hood.
The
growth of this industry is expected to be significantly high in the coming 5
years because of the rising need for quicker and efficient mobility. Although
many companies are dominant in this sphere however few recent companies like
Tesla have been able to gain significance in the recent years due to their
combination of efficiency, design and cost effectiveness. Companies need to
innovate and come up with innovating concepts different from traditional cars
that run on oil which could potentially make them a significant player in this
global industry.
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Research
Ankur
Gupta, Head Marketing & Communications
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