automobile manufacturers are General Motors, Chrysler, and Ford. These three manufacturers are sharing the major automobile production in the United States with some renowned multinational brands including Honda, Toyota, Nissan, BMW, Mazda, Mitsubishi, Hyundai-Kia, Subaru, and Daimler (Vlasic, 2011)
China is one of the growing markets that the company should address in a more aggressive manner. Certain Chinese polls and surveys place Jeep in the top 5 most preferred American brands (Highfill et al
1). According to this author, "Ghosn said the high cost of materials such as iron ore, precious metals and aluminum represent risk for the industry, and must come down after increasing for four years" (Beene, p
S. include mandated price ceilings on the price of gasoline (Mankiw, 2004)
1). Furthermore, some researchers suggest that other negative externalities of the automotive industry today include the indirect provision of American dollars to countries in the Middle East that sponsor terrorism and threaten American interests at home and abroad (Hewitt, 2007)
Negative or Positive Externalities the Automotive Industry Produces. Some of the more obvious negative externalities produced by the automotive industry include the pollution caused by internal combustion vehicles and the concomitant traffic congestion and increased incidence of traffic accidents, injuries and deaths that result in many parts of the country (King & Lyytinen, 2004)
Furthermore, some researchers suggest that other negative externalities of the automotive industry today include the indirect provision of American dollars to countries in the Middle East that sponsor terrorism and threaten American interests at home and abroad (Hewitt, 2007). By contrast, the creation of new jobs and the addition of new employees to the American workforce are some positive externalities produced by the automotive industry in the United States (Sturgeon, 2000)
The ever-increasing number of new model releases and the urgency for faster technical innovation has shown several weaknesses in the industry which is required to be surmounted. (Bollig, 2002) According to a survey the most identified are as follows: (i) Right First Time: Top class component quality and readiness in production from the beginning of a new model
The Total Cost of Ownership -- TCO continues to remain the single most important factor while buying a reality which restricts the amount of thriving innovations within the auto industry. (Dannenberg; Burgard, n
Innovation management is supported through the application of Innovation Management tools which are normally web-based and helps them to go beyond conventional geographic barriers. (Das; Puri, 2003) Innovation Management systems are also able to generate structured processes for evaluation and sharing ideas, such that decision makers are able to target those who possess the maximum potential
Small wonder then, the suppliers also play a bigger role as innovators. (Maurer; Dietz, 2004) Research suggests that particularly in the sphere of electronics and mechatronics, the supplier community will come to be the most important drivers of innovation in the industry
Prices ran from $2,519 for the two-door Ranger sedan to $3,810 for the Citation convertible. Compared with its rivals from other companies of the time, the Edsel "was priced lower than Desoto and Oldsmobile, about on par with Pontiac and slightly higher than Dodge" (Daines, 56)
but by 1958, people were thinking more along the lines of smaller economy cars. The public's interest in huge, big fin cars with glitzy chrome was just about over" (Ervin, Internet)
This has led to phenomenal success of India and China in aftermarket parts. (Ross, 2005) The effect on the economy may not be as substantial as the effect on the role of local suppliers in the vehicle parts industry
Within the industry there is more focus on how to increase the speed of product development and ensure more effective product introductions using open innovation including more efficient green or eco-friendly cars. The influence of social networks on open innovation, including the collaborative platforms used for new product development that borrow concepts from Facebook, are increasingly commonplace (Bernoff, Li, 2008)
The industry had been lulled into updating models on a 36 to 72-month cycle, which led to consumers who wanted sportier designs migrating to Audi, BMW, Mercedes and other brands with industry-leading designs. Today there is much greater focus on creating highly customized, build-to-order cars, which is the strategy BMW, Ford, Lexus and other auto manufacturers are increasingly relying on to gain new sales (Bilek, 2010)
S. has on many nations they don't have diplomatic ties with including Venezuela are all combining to change the structure of this industry (Gaylord, 2010)
As a result of the continued recession and perceptually low consumer confidence over the last two years of the downturn, many consumers are delaying purchasing a new car, often opting to fix their older, often paid-for ones . While auto manufacturers diligently work to attract new customers through aggressive price discounting and extensive branding campaigns both on -- and offline, new sales continued to be below pre-recession levels (Herrmann, Henneberg, Landwehr, 2010)
The higher a price for a luxury car the greater the assumption of value, which also leads to more upward-driven elasticity and exclusivity as well. The price-quality relationships in automotive demand is evident in how easily the premium brands of BMW, Lexus, Maybach or Mercedes can easily raise prices and still achieve record financial results (Bajic, 1988)
Pricing Strategies for Optimal Profitability in the Auto Industry Defining the optimal pricing strategy for a given type of vehicle in a specific market, while also taking into account interest rates, cost of capital for dealers to finance their inventories, and consumer confidence requires an optimization-based approach to defining prices. The elasticity of demand in the industry is proportional to the microeconomic factors beyond control of the global manufacturers competing in this industry, yet is also defined by the frequency and innovation of new vehicle introductions, creativity in financing and leasing, and the willingness of manufacturers to allow for customization of vehicles during production (Cassel, McCormack, 1987)