Industry Analysis & Industry Trends
The past five years have been difficult for the Global Motor Vehicle Engine and Engine Parts Manufacturing industry. More stringent emission regulations, coupled with consumers requiring more fuel-efficient vehicles, have created challenges for manufacturers in mature economies. To make matters worse, the price of components kept on rising, which severely squeezed profit margins. Engine manufacturers in emerging economies were experiencing a completely different story. The demand for engines rose rapidly in countries such as China due to income growth as well as road infrastructure expansion.
Over the five years through 2011, industry revenue will rise by a 2.0% annually to $272 billion... read more
Starting a New Business
Since the automotive industry operates globally, any new entrant would be required to establish a network to compete with the incumbents. This is particularly true for those (tier I manufacturers) wishing to supply original equipment manufacturers.
Innovative products are required by regulation and demand from assemblers, and as such extensive capital is required for research and development. These include engines that are fuel efficient and with low or zero emissions. The requirement to reduce prices periodically requires a new entrant to be a low cost producer. For this to happen, expenditure on technology is expected to be significant... read more