Industry Analysis & Industry Trends
The past five years were tumultuous for automobile and light duty motor vehicle manufacturers. Industry revenue is expected to grow just 0.5% per annum over the five years through 2012 to reach $2.16 trillion. Skyrocketing fuel prices and growing environmental concerns have shifted consumers' preferences away from fuel-guzzling pickup trucks to smaller, more fuel-efficient cars. Some automakers embraced the change by expanding their small car portfolios and diversifying into the production of hybrid electric motor vehicles. Other automakers were more reluctant to shift their focus from big to small cars, expecting the price of fuel to contract eventually, bringing consumers back to the big-car fold... read more
Starting a New Business
The cost of developing high volume production facilities to benefit from economies of scale is very high. Substantial capital investment is required for successful operations. The need to comply with stringent environmental regulations in the future would require significant research and development investment for an entrant.
The ability to gain access to technology of major global operators, as the present incumbents include some of the largest car makers in the world that have considerable claims to new technology. At the same time, new entrants will find it difficult to develop and establish a new brand as competition is intense, with incumbents occupying strong branding... read more