Essay About Automobile Industryall Change And Automobile Industry

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Wheels of change: the automobile industryAll change?The 2008 global financial crisis hit the automobile industry with cataclysmic force ➔Big companies faced bankruptcyGovernment injected massive financial assistance into the automobile industries to prevent huge job losses and ride out the crisisAll of this called “the industry of industries” by Peter DruckerThe global automobile industry is made up of very large corporations, means that increasingly organized their activities on transnationally integrated lines => engage closely with national governments and anxious to establish or enhance automobile productionIt shows that competitive bidding for investment is endemic in this industryAlso, new global players have arrived on the scene (from India, China, and South Korea) – compete with the firms from developed economies.The automobile production circuitAn assembly industry (lắp ráp)The centre of the automobile production circuit is the complex set of relationships bw the assemblers of vehicles and the suppliers of components, which account for bw 50-70% of the cost price of the average car.There are 3 major processes: the manufacture of Bodies, Components, Engines and transmissionsThe automobile industry is a strongly producer-driven industry[pic 1]Global shifts in automobile production and tradeThe map of automobile production remained fairly stable in years3  main regions contain round 90% of total production: North America, Europe and AsiaHowever, the lv of concentration is even higher: almost two-thirds of global production is concentrated in just 7 countries – Japan with highest percent – the world leading automobile producer. Followed by China, Germany, the US, South Korea, Brazil and France.In the period of 2007-2008, almost car production in the world fell, except Brazil’s output grew by 8%, China 5% and India 3%There are huge differences in the balance of trade. For example, in 2009, the US had an  automobile trade deficit of $112 billion; on the other, Japan had surplus of almost $160 billionChanging patterns of consumptionCar ownership offer personal freedom to travel; also, car become emblematic of particular lifestylesChanges in personal income lv, customer tastes and preferences over timeeffect to the demand for automobiles3 interrelated characteristics of market for new automobiles are important:It is highly cyclical (theo chu kỳ)Long-term changes in demandThere are sign of increasing market segmentation and fragmentationIn most developing countries, the demand is primarily for small, cheap cars, but, among the increasingly affluent segments of population, demand for large luxury cars is growing at remarkable speed. Such as, while SUVs may have gone out of fashion in the US, in China their sales continue to grow apace.Rapid growth in demand is associated with new demand. But as a market “mature” and automobile ownership levels approach “saturation”, more and more car purchases become replacement purchases. Especially, there is a 85% of total demand for automobile is replacement demand. It generally slower growing and more variable, because it can be postponed.The third characteristic is increasing segmentation and fragmentation: Consumer demand different types of vehicle for different purposes, the demographic profile of consumer markets changes, and emerging customers demand low-cost carsHowever, there are some problems for manufacturers: the continuing problems of excess capacity result in changes in both how vehicles are manufactured and where they manufactured.Technological change in the automobile industryFrom mass production to lean production (sx hang loạt sang sx tinh gọn)Between 1913 and early 1970s, Henry Ford introduced the moving assembly line which was mass production industry: means that the industry had to produce a limited range of standardized products at huge production volumes to obtain economies of scale.The situation changed dramatically in early 1970s when appeared highly cost-competitive Japanese automobile firms, led by Toyota.The basic of this second transformation is the displacement of mass production by a system of lean productionThere are 2 of the most significant technological developments are related to architecture of vehicle. The first is the increasing use of shared platforms bw different vehicle models. By using a smaller number of common platforms, it is possible to share many components across different vehicles, so the diversity is based on a much smaller number of platforms. The second is modularization of certain components and the development of component systems. In the case of automobile, a module is a group of component arranged close to each other within a vehicle which constitute a coherent unit. A component system is a group of components located through-out a vehicle that operate together to provide a specific vehicle function, for eg, electrical system or steering system.Changing the product: the search for cleaner, more efficient carsThere are 2 challenges that automobile manufacturers have to face:the drive for more efficient production processesto produce different kinds of vehicle to meet the pressures of environmental regulation on emissions and to reduce the amount of fuel used in carsTherefore, there are 3 major new tech are developed: Hybrid cars, Plug-in cars, and Hydrogen fuel cells.So far, only Hybrid had a significant impact, such as the success of Toyota Prius. The Plug-in is limited by the range of batteries.Another focus is develop small, cheap-to-make, cheap-to-run cars. Specifically, the Nano produced by the Indian firm – Tata, is the world’s cheapest carThe role of the stateProtection and stimulationThe state always played a key role:determining the degree of access to its domestic marketestablishing the kind of support provided by the state to its domestic firms and extent to which the state discriminates against foreign firmsUse of tariff and non-tariff barriers against automobile imports, also, it is influenced by the level of tariff. States may levy high tariff on imported vehicles but low on imported components to stimulate local production.