Trends in the Automotive Industry

Trends in the Automotive Industry

1. Consolidation

The trends in the automobile industry present through the 1990s

intensified as the industry moved into the twenty-first century.

Global convergence stood out as a major issue. And the consolidation

was continuing from 1990 to 2000.

2. Mergers and acquisition

There was a great deal of consensus amongst commentators that in a few

years the industry would consist of no more than six giants, with a

peppering of niche players. Mergers and acquisition activity moving

from automobile manufacturers, already highly concentrated to parts

suppliers.

3. Technology

The Internet and e-commerce---- shortening the lead-time

The Internet and e-commerce play a vital role by shortening the

lead-time for the production of an automobile. If given the importance

of the purchase, customers could be brought into a Web-driven

relationship with automobile suppliers and manufacturers, a shortening

of the lead-time was a distinct possibility. The Internet allows for a

more accurate assessment of demand, not only of its volume, but also

of the kind of vehicles and optional extras the market required.

Business-to-business network----just in time

As far as manufacturing was concerned, considering that a typical

automobile was made up of more than 20,000 parts provided by about 200

suppliers, all due to be delivered ‘just-in-time’, a

business–to-business net work looked remarkably useful.

I will apply Porter’s five forces framework to the segmentation of

luxury cars in automobile industry in this question. The five forces

framework helps identify the sources of competition in an industry or