THE MOTOR VEHICLE INDUSTRY IN AUSTRALIA Essay Example

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    Marketing
  • Document type:
    Assignment
  • Level:
    High School
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With reference to the car industry, there is a wide market, customers, suppliers and both the wiling buyers and sellers both at public and private sectors. Being the industry of industries, the car industry is influenced by a variety of forces hence the report targets the analysis of socio-cultural, economic and technological trends which are the key basic concerns (Hartman, 2010, P. 42). However, analysis of these forces embraces the understanding of the major impacts particularly when referencing to the Western market especially in Europe. In the analysis, macro environmental concerns deals with major driving forces in the industry (Sullivan, 2008, P. 14). Additionally, the overall motor vehicle industrial reputation, brand perception and product range should improve in order to enhance the perception on the quality of cars from Australia hence reliability as the service providers and manufacturers practice skilled labor.

Product differential strategy on specific products should be manifested to some extent for instance, FIAT which faces distribution barriers due to solely focusing on the domestic market. However, for FIAT to move to a different segment, segment 5 where the products are authorized to be sold in the global market, the company should develop and expand its marketing strategies (Hartman, 2010, P. 23).

Mar. 2010

Mar. 2009

Mar.2008

Australia

Worldwide

Table 1: Sales from Australia and worldwide market

Source: http://www.TATAmotors.com/our_world/profile.php

 
External analysis

Macro environment analysis of new country

Economic Environment

Australian economy exhibits strong financial stand despite the slowdown in economic globalization in the last 15 years. However, the rate on employment and income growth has efficiently and effectively increased (Kotler et al, 2009, P42,). In order to chalk out the future economic trends and the standard lifestyle of the Australians, it is adept to measure the national income of the country (TradeChakra, 2010, p. 41). The country experiences a commendable, significant income growth in the past two decade, between 1997-98 and 2007-2008 where the real national net disposed income per individual grew by about 2.9 % which represents a yearly average. This values appreciably faster that it was in the past preceding decade (ABS, 2009).

Market/industry analysis economic forces

Definition and structure

The Australian motor vehicle industries strategized in accordance with the type of cars taking lead in the targeted market, however, this is due to the consumer taste that dictates the kind of products and services to be offered in order to avoid redundancy. The type of vehicles that sell in the Australian market includes but not limited to Sports Utility Vehicles (SUVs), cars, buses, light commercial vehicles, medium, special purpose and heavy commercial high way trucks and vans which are used for both commercial and private purposes (Sullivan, 2008, P. 21).

  Safety- Social control forces

Green house Gas emission

At present, the level of green house emissions is medium with regularly increasing regulation trend enabling road users to practice and/ or purchase environmentally safe gas emission exhaust systems. Despite the enactment of regulations governing environment, the motor vehicle industry is Australia is set face very tight regulations in relation to green house gas emission due to the tight European laws in connection with environmental hazards, however, this is more so as a result of the determination of the global communities especially the G8 millennium development goals (MDGs) in connection with global warming which poses a threat to the world as a result of depletion of the ozone layer from the green house gas emission (Wilson, 2008, P. 14) . In Europe, the gas emission laws were agreed upon in early 2001, however, since then a lot of alterations have taken place to further lower the rate of carbon dioxide (CO2) gas emission. In order for Australia to be able to sell cars to the European market, they had to follow the same laws of which by the year 2008, the Australian regulations had matched the European standards (IBISworld, 2010, p. 17 and Toyota, 2010, P. 18).

The advanced technology has lead to a series of improvement in the motor vehicle industry, however, by 2006, the ATC, (Australian Transport Council) negotiated with the Federal Government to affirms the installation of computerized skid detectors in the new cars so that the rampant cases of accident could be lowered (IBISworld, 2010, p. 21). Traffic rate is another concern that required attention in order to lower the traffic from 10% to below 5% so that the road users would realize the need to travel by road through avoiding the rampant accidents and being stuck in traffic jams for hours. However, this is caused in most cases by the reckless drivers who do not care for the other road users inclusive of the private and public vehicles (Productivity Commission, 2002, P. 13).

Technological Environment

Despite the urge to buy new cars, consumers currently do not only consider the cost and durability of the cars other than availability of spare parts, but also the effects of the car to the environment for example; does the car positively or negatively affect the environment. This is a concern that the Australian motor vehicle industry strategizes to overcome through the invention and innovation of hybrid and electric cars other than installing gadgets to cleanse the exhaust system to ensure that the by product of the combusted fuels are no longer hazardous to the environment in which we human beings to exists (Australian Bureau of Statistics, 2009, p. 06).

A practical example:

Examining the Japanese auto industry, they produced the first electric car which was ready for use in August 2009 referred to as the “LEAF” which is expected to sell in Australia by 2012. The Australian auto show this year expects a product of Mitsubishi in this year’s auto show; the Mitsubishi iMiEV which is a proof in the Australian market showing how eager the country is in realizing environmental friendly products (Heasley, 2009, p. 41)

Product/Services Segment

Market Share

Large cars

Medium-sized cars

Luxury cars

Figure 1: Market Segment of Australian motor vehicle market

Retrieved from: IBISWorld Industry Report, 2010, Motor Vehicle Manufacturing in Australia: C2811 on 25th, March, 2011.

       Technically, the development in the motor vehicle industry is a threat to the traditional motor vehicle manufacturing technology for example experienced in modern cars which are environment-friendly with ability to detect accidents and other problems through a computerized detection system (Wilson, 2008, P. 3). In the motor vehicle industry, intense competition is realized especially trough imports, branding and vehicle pricing due to lower tariffs imposed on vehicles and relatively cheap vehicles from foreign countries; there exists a lot of competition, through production of luxurious cars for example the Hybrid Camry from Toyota which was launched last year (Toyota, 2010, P. 11).

However, the increase increasing competition in the industry is healthy as it leads to production of more advanced cars with better safety gadgets to reverse the worrying rate of accident not only in the Australian market but globally. This can be explained through an argument that not all the cars manufactured in Australia will be use in Europe but also America, Asia and Africa. The main competitors are the Toyota Australia and GM holdings LTD. Each of the companies strategize on how best to satisfy the consumer needs hence ensuring quality is maintained within the motor vehicle industry. The main consumer concern are fuel consumption, environmental effects e.g improvement of degradation and safety measures which includes the installation of airbags and computerized safety gadget with ability to warm the drivers in time incase of a problem (Productivity Commission, 2002, P. 15).

Market Share

Major Player

Market Share range

Toyota Motor Corporation Australia Limited

35.1% (2010)

GM Holden Ltd

29.4% (2010)

Ford Motor Company of Australia Limited

17.0% (2010)

4.0% (2010)

14.5% (2010)

  Figure 2: Market Share of Australian market

Source: IBISWorld Industry Report, 2010, Motor Vehicle Manufacturing in Australia: C2811

Critical success factors

2006).et. al.,The changing human needs within the public image of motor vehicle company would impact on the human perception could persuade more buyer because buyers due to the safety and level of income which indicates their ability to afford luxurious cars with comfort (Dudenhoffer

References

, March, 201. th, Retrieved from:http://www.abs.gov.au/AUSSTATS/[email protected]/Lookup/1383.0.55.001Main+Features142009, on 25National IncomeAustralian Bureau of Statistics. (2009).

Dudenhoffer F., Neuberger K., Wiegand P., Steinel J. (2006). Developments and success factors in automotive retail, Australia: Sydney.

, Retrieved from: http://business.theage.com.au/business/nissan-turns-over-a-new-green-leaf-20090802-e5wm.html.Nissan turns over a new, green LeafHeasley, A. (2009).

March, 2011.th, Retrieved from :http://www.ehow.com/list_6181968_automotive-critical-success-factors.html, on 24Automotive Critical Success FactorsHartman, D. (2010).

IBISWorld Industry Report. (2010). Motor Vehicle Manufacturing in Australia: C2811, Retrieved from IBISWorld database, on 23rd March, 2011.

Kotler, Philip, Kevin L. Keller, and Buron, S. (2009). 1st Edi. Marketing, French’s Forest, NSW: Pearson Education: Australia.

Productivity Commission. (2002). Review of Automotive Assistance, Report No. 25,

Sullivan, M. (2008). World’s First Air-Powered Car: Zero Emissions by Next Summer, Retrieved from: http://www.popularmechanics.com/cars/news/preview-concept/4217016 on 25th March, 2011.

Toyota. (2010). Camry, Retrieved from: http://www.toyota.com.au/camry/hybrid-camry on 24th March 2011.

Tradechkra. (2010). National income, Retrieved from: http://www.tradechakra.com/indian-economy/national-income.html, on 22nd march, 2011.

Wilson, T. (2008). Tariff cuts do more, The Australia: Sydney. Retrieved from: http://www.theaustralian.com.au/news/opinion/tariff-cuts-do-more/story-e6frg6zo-1111116595314, on 24th March, 2011.