Abstract

The car industry occupies a position of strategic importance in many countries. However, with increasing maturity, this industry has stagnated in the USA, Europe and Japan with the average profit margins declining to less than 5% in 2004. The case discusses the changing dynamics of the car industry in the USA, European, and Japanese markets and the competitive position of various players like General Motors, Ford, Toyota, Honda, and DaimlerChrysler. The case also focuses on the various initiatives launched by the car companies to revitalise and strengthen their position. To retain customer interest, car companies are frequently renewing models. This is causing market fragmentation. They are also trying to move towards a build-to-order model, which would serve niche segments efficiently. Leading car manufacturers are concentrating on product development and leveraging common platforms to launch new models. New business models that cut costs and improve customer responsiveness are also emerging.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Car industry, Global car industry, General Motors, Ford, Toyota, Honda, DaimlerChrysler, USA car industry, European car industry, Japanese car industry, Nissan, Volkswagen, BMW, Luxury cars, Renault, Telematics