Challenges of Automotive Industry

Product Differentiation in Automobile Industry

Contents

Background:        

India’s Unique Position        

DIFFICULTY IN INTERNATIONAL OPERATIONS        

a.        Modularization, granularly segmented product lines        

b.        Increasingly rigorous standards        

c.        Emphasis on Software and Electronics        

d.        Connectivity and Data Management        

MAJOR ISSUES FACED BY THE INDUSTRY        

1.        Globalization:        

2.        Product Development        

3.        Differentiating the product        

4.        Brand Management        

5.        Customer Relationship Management        

STRATEGIES ADOPTED BY THE AUTOMOBILE INDUSTRY        

MERGERS AND ACQUISITIONS: A COPRPORATE STRATEGY FOR PRODUCT DIFFERENTIATION        

TESLA MOTORS: THE EPITOME OF PRODUCT DIFFERENTIATION        

FARADAY FUTURE: THE RIVAL OF TESLA        

Background:

At a time when many countries resist to cope with the weakness and resulting uncertainty in the highly interdependent global economy, the automotive industry is at a crossroads. Notwithstanding the industry consolidation of recent years, there is once again too much capacity chase consumers in the fully grown, affluent markets, while demand has yet to take off in emerging markets such as India and China, where huge industrialized and assembly investments have been made. The pain of excess capacity is being felt most acutely by several of the largest conventional automakers and their affiliates.

There are great costs to sustaining claim in this oversupply environment. In particular, car model lines that are distinguished, aging, “me too” or notorious gave required incentives to engender sales, and as a result, manufacturers have seen their margins crumble.

In today’s markets, a new engaged, usually smaller and nimble automakers have been able to achieve and sustain their unique product, quality and cost position – notably BMW, Honda, Nissan, Porsche, PSA and Toyota.

In the meantime, product discrimination is playing a key role in today’s automobile industry. It is now the small innovations and the agile tweaks which are so disguised that people cant see them but can feel the disparity when they are driving the vehicle which really matters now. Almost every car in the US has an airbag system now. But today, systems such as the Anti-Braking System (ABS) or the automatic tyre inflation system is grabbing the eyeballs.