Following international trends, the automobile industry in Pakistan showed substantial growth in the years under review. A significant rise in demand for automobiles, propelled at least partly by easy availability of auto leases and loans from banks and leasing companies at low financial cost, was instrumental in the fast growth of the sector.
In the past years, there has been a high growth of more than 40 percent per year in the automobile market. The growth in the automobile sector had naturally also given impetus to the allied automobile vendor industry, which also faced problems due to the recent fall in demand. The auto-makers need to take this crucial fact into account that there is still a significant gap between supply and demand for
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Since managers have superior information about the firm than investors, they might issue equity when it is overpriced. Notwithstanding a manifold increase in car production in Pakistan during the last few years, Pakistan still stands relatively low in terms of motorization when compared globally and even to its neighbors. [1]
The automobile industry was established in Pakistan in 1950 and since then has fluctuated through different phases of remaining in private and public controls.
From 1980s onward, the control of the automobile industry remained in private hands. Presently, there are three major car manufacturers/assemblers in the car industry in Pakistan namely: Pak Suzuki Motor Company Limited, Indus Motor Company Limited and Honda Atlas Cars Limited.
Pakistan automobile industry is inward looking and it tries to protect itself through the use of regulatory instruments. Pakistan needs to develop the automobile industry instead of protecting it and in this regard, imports have a disciplinary impact on domestic firms. [2]
The auto industry in Pakistan is producing all kinds of vehicles that include; motor cars, buses, trucks, Light Commercial Vehicles, tractors, prime-movers and 2/3
The current state of the automotive industry is one of shrinking margins, changing consumer expectations and demands, as well as pressure from the government to increase fuel efficiency. There is increased competition in the American market as foreign companies challenge the “Big Two” automotive manufacturers. Costs increase while the price for their products has remained stagnant. One way that manufacturers have managed to stay profitable is actively working to decrease costs while needing to keep the selling price the same in order to be competitive. The most successful ones have changed their relationships with suppliers to a partnership between the two companies.
Hill Country practices the conservative capital structure, which has excessive liquidity and lower interest rates that will bring negative impacts on the company’s financial performance measures. So, it is a good opportunity for Hill Country to implement a more aggressive capital structure. For example, the Chief Executive Officer (CEO) of this company can increase the leverage ratio by either increase the debt or reduce the equity or both. At first, debt financing usually used when a firm raises money for capital expenditures by issuing debt instruments to individual or institutional investors.
3. Threat of new entrants High barriers to entry in the industry. Licensing requirements are high. There is a minimum size requirement to achieve profitability and the initial investment is required and fixed costs of operating. How much of the control is in the hands of existing players of the market or key resources?
Grandma’s Best currently has a broad product/narrow- medium market focus. The firm offers products in all five categories within the confectionery industry (chocolates, soft candy, hard candy, holiday specific chocolates and biscuits/cookies). Grandma’s Best primarily targets the middle to higher end retail outlets and gourmet shops. Grandma’s Best has .05% market share of the United States confectionery market which consists of three considerable players. Mars, Inc. owns 30.2% of the market, Hershey Company owns 27.7% and Kraft Foods, Inc. owns 7.2% followed by other companies who own 34.9% of the market.
It is expected that the performance of the company would further rise in the future in the automotive industry. However, the company is required to improve their net income in order to increase market share. (Figure 1) Tesla Motors Company has a unique position in the car market which forms the company’s biggest strength. The unique position of Tesla Motors is revealed on the fact that the company not only sells cars but also sells new technologies. Basically, betting on Tesla Motors encompasses integration of a new technology.
The firm is a multinational enterprise, with offices in 10 different countries and car stores in some 25 countries. Its main product line is the Tesla electric cars, currently consisting of three models: the Tesla Model S, Model X and Model 3. The Model 3 was launched in 2017 and is aimed at the lower spectrum of the EV market, whereas the model S and X are high-end cars serving the ‘premium’ segment. In this essay, I will examine Tesla’s
Response to the Part 2: PESTLE Analysis on “Driverless Cars” in My City..... I am working in Hosur, Tamilnadu. Since already Mr. Kesavaraj covered his analysis on Hosur, I would like to take my Native City “Coimbatore, Tamilnadu” for my analysis. “Coimbatore” – Manchester, Nucleus & 4th Largest Cosmopolitan City of South India. It is well known for its year around awesome Climate & world’s Sweetest drinking water “Siruvani”.
The Automobile Industry is very complex and to start a business in automobile industry high level of capital investment is required. Not only huge amount of money but also a labor force will be essential, which are the main barriers to enter into the automobile industry. For Example, the US auto industry was once considered safe until Honda Motors gave a big challenge to these companies by opening a manufacturing plant in Ohio. The Automobile industry includes many other industries as well for example, tires and seat manufacture. These industries are the suppliers of the Automobile industry.
In the world, people have many hobbies and interests, being a car enthusiast is one of them. There are many stereotypes and misconceptions against car enthusiasts due to the lack of knowledge non-car enthusiasts have. Being a car enthusiast is not only admiring cars, but also having an interest to do what you want to with your car, such as driving. Whether you want to drag race, race on the track or go off roading, a true car enthusiast sees the beauty in cars whereas other people would just see a normal car. Car enthusiasts find the beauty in cheaper cars where they could mod their car to their desire.
Export duty charged from 140% to 300% based on car’s engine (royal Malaysian customs and excise department, 2000). 2. Economical factor Economic factor play an important role in automobile industry. During the financial crises economic condition was not good, the sales of vehicles was down. The demand of luxury cars went down.
Political factors have huge influence on the profitability of the automobile industry. Political also include goods and services which the government wants to provide and goods
Looking at the impact of external environment on select companies, we’ll look at both Ford Motor and General Motor companies. The Ford Motors company approximately had 14 percent market share in the U.S. automobile industry (David, 2011). The company had recovered a lot after the impact of recession in the year 2008. The company has been investing in developing vehicles which use alternate energy sources, and is having global presence and brand reputation for its automobiles. The company has received government support during the recession period, and had to cut down thousands of jobs and adopted latest machinery for enhancing the productivity of the company.
Crossover vehicles have an extraordinary interest and more backing from the administration because of its eco amicable discharge. Indian Government has transformed its part from controller to facilitator with prime center on providing better base, development oriented financial arrangements and right environment to pull in investments. This has made giant automobile producers enter into India and erect the focused environment. The liberalization steps, for example, unwinding of the remote trade and value regulations, reduction of tariffs on imports, and reining the keeping money strategies, have assumed an equally important part in bringing the Indian Auto-rationale industry to incredible statures.
Every since cars have been produced, certain designs have had a lasting impact on society. The Mustang for instance is one of the most widely recognized vehicle designs in the world. A car design that had an impact on society years ago is called a classic car. Not all old cars are considered classics.