This is marketing research on the Automobile industry and can include information on the background, market structure, definitions, competitors, trends and developments of automobiles and is related to other topics such as cars, trucks, vans, motorcycles and vehicles.

Table of Contents

[edit] Background

Motor vehicles industry is a very diverse one considering the range of vehicles that are manufactured. The range of vehicles that are produced by the manufacturers include the following:

• Passenger cars including SUVs, this is the largest segment.
• Commercial vehicles; light as well as heavy trucks
• Construction related vehicles, such as earth movers, bulldozers & so on.
• Farm vehicles, such as tractors, harvester combines, lawn mowers etc.
• Entertainment vehicles such as dune buggies etc.

Component manufacturers and other ancillary industries supply components and parts required by the OEM companies. 3PL or the third party logistics companies maintain the supply chain between the component makers and the OEMs. Then there are industries that depend directly on the availability of autos. Rental industry is the foremost among them. Replacement parts particularly tires are a regular requirement of vehicles in use.

Pre-owned car market depends on the vehicles discarded by the original owners. These people do change their vehicles quite often. Then finally the large volume of vehicles that cannot be used any more are fed into the recycling industry that recover the metal, plastics and other material from the discarded vehicles. Car insurance providers are part of the service industries related to the vehicle use. Lastly of course, the gas supplying companies are another important part of the eco-system keeping the huge number of vehicles running.

Since it is impossible to cover all aspects of such a large and diverse kind of industry, the prime focus here would be on passenger vehicles only. Key Source:Accenture

[edit] Market Structure

The automobile market is dominated by a few very large companies. Besides the U.S., Japan has been a leading supplier of passenger vehicles worldwide. Daimler-Chrysler is a German company that is also a leading company.

The leaders between them hold a total market of more than $900 billion. 7 companies as follows are the leaders in order shown.

1.	General Motors
2.	Daimler-Chrysler
3.	Toyota
4.	Ford
5.	Volkswagen AG
6.	Honda
7.	Nissan

This is for the new cars alone. Components and ancillaries represent a market of similar dimensions. Just the rental business alone generated a revenue of $17 billion in 2004 in the U.S. That is a clear indication of the size of vehicle population and corresponding replacement parts and tires market size.

Key Sources:Duke University and Fleet Central

[edit] Industry Definitions

• OEM: Original equipment manufacturers, the car makers.
• Ancillary industry: Collection of companies that produce parts and components for the OEMs.
• 3PL: Third party logistics. Companies that move component products to the main manufacturers. These are independent operators rather than the component manufacturers.

[edit] Market Metrics

Global sales of light vehicle in terms of number of units is represented below. What’s interesting to note here is that the South Korean company Hyundai has started making headway in the global market.

While GM is still the leaders in terms of number of vehicles sold, Toyota is close on its trail. They also have a high quality reputation and unless something is done by GM they could possibly overtake GM very soon.

Total revenues and net income numbers are indicated in the following chart. GM and Ford’s income numbers have been declining. Daimler Chrysler has positive income. Toyota has the best numbers followed by other Japanese manufacturers Honda and Nissan. All these companies have a healthy bottom line corresponding to their top lines.

U.S. rankings of companies in the “motor vehicles and parts” category is as follows.

          Company	              Revenue($ billions)

1	General Motors	                          207.349
2	Ford Motor	                          160.126
3	Johnson Controls	                   32.413
4	Delphi	                                   26.392
5	Goodyear Tire & Rubber	                   20.258

Key source: Fortune Magazine

The market share of the big three of the U.S. has been under pressure in the last few years. Competition is not only from cost efficient manufacturers from Japan but also from their plants in the U.S. Manufacturers like Toyota and Honda are able to respond to dual trends of providing cheaper cars in the same segment as also providing more luxurious cars for similar prices. Toyota’s quality reputation is legendary. Their lean production system has made producing cars in U.S. very efficient.

[edit] Industry Players

General Motors Corporation - Employing 335,000 people, GM is the largest vehicle manufacturer in the world. It is headquartered in Detroit, Michigan, but it has operations in roughly 55 countries outside the U.S. and Canada. GM owns other manufacturers, including Chevrolet, Pontiac, and Hummer. General Motors

DaimlerChrysler AG - DaimlerChrysler produces everything from sports cars to utility trucks. It is headquartered in Stuttgart, Germany, and primarily operates in the U.S. and Western Europe. DaimlerChrysler

Toyota Motor Corporation - Toyota is the epitome of a worldwide company, selling vehicles in more than 170 countries and regions. It is headquartered in Toyota City, Japan, and employs approximately 285,980 people. Toyota

Ford Motor Company - Ford's brands include Lincoln, Mercury, Jaguar, and Volvo. The company manufactures and distributes automobiles across six continents. It primarily operates in the U.S. and Europe, and it is headquartered in Dearborn, Michigan. Ford Motor Company

[edit] Recent Trends and Developments

The common trend of manufacturing moving to lower cost centers is seen in this industry too. The same new manufacturing nations are also hot economic growth engines making them a large and very fast growing consumer market too.

Car GPS and navigation systems are certainly destined to become the FM radios of the old days. While the trend started with premium segment of the cars, it has already reached the mid-segment and is poised to become a commodity offering soon. Same goes for prime quality sound systems. With the development of mobile technology it is just a question of time before video feeds to these moving platforms become main-stream.

Other significant trend is, after years of discussing about fuel efficiency the push is on to find solutions as petroleum prices hover around the $100 per barrel figure. Some of the new hybrid cars, Prius of Toyota in particular, seem to have caught the fancy of consumers. Lot more activity is going to be seen in this area. Fuel cells that are expected to supply power to such vehicles is going to a very hot area of activity.

[edit] Sources

• Accenture
• Fortune 500
• Rediff.com
• Fleet-central.com
• Duke University