Opportunity and Challenges for 2020 and beyond
1. How is the global automobile industry evolving?
Ans. The global automotive industry is in better shape than it was five years ago, especially the US, where profits and sales have recovered following the recent economic crisis, and in China, where growth remains strong. The industry has been able to recover from the economic crises. In 2012 the industry had a profit of EUR 54 billion which was much higher than in 2007 which was around EUR 41 billion. It is expected that by 2020, global profit would increase by EUR 79 Billion. But the benefits will not be distributed equally across all geographical areas. In 2012, it was witnessed that the share increased by 60% …show more content…
Since it has proved worldwide automotive profit in 2012. It is expected that the profit in the BRIc and ROW is projected to grow more than three times as fast as established market, and by 2020, global profits for automotive OEMs are expected to rise by almost 50 percent. Most of the countries and states will witness a huge increase in profit from the industry. The new profits will mainly from growth in emerging markets and, to a lesser extent, the US. Europe, Japan, and South Korea will be stagnant in terms of profit growth. The vast majority of the estimated additional profits will come from steady sales growth that is estimated to 3.8 percent a year, including 4.4 percent for the premium …show more content…
How can OEMs benefit from these new challenges and opportunities?
Ans. The new challenges and opportunities can benefit OEMs in many ways:-
The first benefit would be the price - cost gap which mean that the OEMs are already established in market in countries such as Europe, North America, Japan and South Korea. It was seen that 76 vehicle model shows that prices have been flat in 1998.The second benefit was that the rising complexity which encourages more flat forming which gave them opportunities to modify their cars by adopting new features with equipment and styling as per the demand of the customers. The car is designed as per the customer’s wish and requirement.
The challenges are seen from china, US and Japan. The new rising demand helped OEMs to establish into new and different platforms to make the environment healthy and pollution free use of carbon dioxide is likely to tighten not only in Europe but also in other countries like China, US and Japan. As a result the cost increases to meet this