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The Automotive Industry
The automobile sector is among the most globalize of manufacturing industries. Today, the modern global automotive industry encompasses the principal manufacturers, General Motors, Ford, Toyota, Honda, Volkswagen, and DaimlerChrylser, all of which operate in a global competitive marketplace. It is suggested that the globalization of the automotive industry, has greatly accelerated during the last half of the 1990's due to the construction of important overseas facilities and establishment of mergers between giant multinational automakers.
Industry specialists indicate that the origins in the expansion of foreign commerce in the automobile industry date back to the technology transfer of Ford Motor Company's mass-production model from the U.S. to Western Europe and Japan following both World Wars I and II. The advancements in industrialization led to significant increases in the growth and production of the Japanese and German markets, in particular. The second important trend in industrial globalization was the export of fuel efficient cars from Japan to the U.S. as a result of the oil embargo from 1973 to 1974.
Increasing global trade has enabled the growth in world commercial distribution systems, which has also expanded global competition amongst the automobile manufacturers. Japanese automakers in particular, have instituted innovative production methods by modifying the U.S. manufacturing model, as well as adapting and utilizing technology to enhance production and increase product competition.
There are a number of trends that can be identified by examining the global automotive market, which can be divided into the following factors.
● Global Investments - The world's largest automobile manufacturers continue to invest into production facilities in emerging markets in order to reduce production costs and be closer to new rising economies. These emerging markets include Latin America, China and Southeast Asia.
● Global Merges and Alliances – "The Big Three" (GM, Ford and Chrysler) U.S. automakers have merged with, and in some cases established commercial strategic partnerships with other European and Japanese automobile manufacturers. Some mergers, such as the Chrysler Daimler-Benz merger, were initiated by the European automaker in a strategy to strengthen its position in the U.S. market. Overall, there has been a trend by the world automakers to expand in overseas markets.
● Global Industry Consolidation - Increasing global competition amongst the global manufacturers and positioning within foreign markets has divided the world's automakers into three tiers, the first tier being GM, Ford, Toyota, Honda and Volkswagen, and the two remaining tier manufacturers attempting to consolidate or merge with other lower tier automakers to compete with the first tier companies.
Another important development in the industry is in the supply chain structure. The days of linear and vertical supply chains within one geographical market are long gone, replaced today by a complex web of supply relationships that transcend national loyalties. One notable example is Japan who purchases around US$45 billion of U.S. auto parts in 2005. Manufacturers are increasingly adopting a global prospective by demanding that suppliers be present near their plants worldwide; doing business with fewer suppliers; and delegating R&D and engineering tasks down the value chain.
The following is a brief synopsis of the world major automotive markets:
The European Automotive Market
The European Union is made up of 25 independent and democratic member states, and any European country applying for membership. The EU is the world's largest automotive manufacturing region and the world's largest market. The European automotive industry represents approximately 9 % of the EU manufacturing sector and approximately 15 % of its workforce.
The European automotive industry is considered a leader in the global market with integrated operations consisting of research, design, development, production and sales. The European automotive market is comprised of a concentrated and sophisticated global network, which includes joint-ventures, cooperatives, productions and assembly sites. EU automotive industry producers have a combined output that exceeds that of the U.S. and Japan. However no one individual EU country produces more than its U.S. or Japanese competitor.
The importance of the automotive industry on the economies of individual EU countries varies from country to country. According to recent reports, Germany, Sweden, France and Spain automobile production represents approximately 10 % of each country total manufacturing, while the average for the EU is about 8 %. The EU's largest automotive producer is Germany estimated at 30 % of EU's total production, followed by France at 19 % and Spain at 17 %, and the United Kingdom at 10 %. These countries are the largest automotive markets in the region.
There are over 20 vehicle manufacturers in the EU, with the largest automakers producing multiple brands, such as General Motors, Ford, DaimlerChrysler, Volkswagen, Fiat and Peugeot Citroen. There are also independent automakers, such as Porsche, BMW and Bertione. The last 10 years has shown an overall increase in vehicle production for the EU auto industry, along with extra-EU exports accounting for approximately 20 % of total production.
Like the other markets in the global automobile industry trade, the EU auto industry has experienced significant restructuring and consolidation, which includes mergers, such as Daimler-Benz with Chrysler; GM acquisition of Saab; Ford's acquisition of Jaguar and Volvo's passenger car division; BMW's take over and then sale of Rover; and Volkswagen's acquisition of Bentley, Lamborghini, SEAT and Skoda. There continues to be co-production efforts and supply arrangements among the EU automakers, as well as with foreign partners outside of the European Union.
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The North American Automotive Market
The automobile manufacturing industry is one of the largest industries within the U.S. and is a vital engine for the U.S. economy contributing greatly to employment and productivity. Reports indicate that motor vehicle production represents over 5 % of the U.S. private sector GDP. The U.S. is the world's largest producer and consumer of motor vehicles with production reaching 12.2 million units in 2002. The U.S. automotive industry continues to experience on-going organizational and technological change, and have taken steps to increase its global presence by expanding global alliances and seeking greater collaboration with other U.S. automakers.
The Big Three U.S. automakers makeup approximately 76 % of U.S. passenger vehicle production, while Japanese automakers, Toyota, Honda, Nissan, Mitsubishi, Subaru, Isuzu represents 18 %, and European automakers, BMW and Mercedes (division of Daimler-Chrysler) make up nearly 2 %. Unlike the Japanese and European automotive markets, the U.S. does not rely significantly on foreign exports. The U.S. auto trade relies mostly on its own domestic market, and to some degree on the Canadian market.
Canada is the largest market for U.S. vehicle exports with subsidiaries of U.S. automakers accounting for most of the imports. Integration of the U.S. and Canadian automotive industry dates back to the U.S.-Canadian Automotive Products Trade Agreement established in 1965.The U.S. Big Three automakers continue to invest billions of dollars into the Canadian market, which has resulted in Canada becoming a global leader in automotive engineering. All of Canada's passenger vehicle production is located in Ontario due to its close proximity to Detroit.
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The East Asian Automotive Market
A bright spot in the global automotive industry is the rapid growth of the Asian automotive market. Over the next seven years, it is estimated that Asia will contribute about 57 % of the growth in global capacity with China alone accounting for 49 %. According to a recent survey by KPMG, nine out of 10 automobile executives believe Asia and especially China will become a “major source of growth” for global automobile demand over the next five years. The two major reasons cited are the growing middle class in China and the greater ease of financing for automobile purchases in that market. It is no surprise therefore that automakers are rapidly expanding their presence in all parts of Asia, and China in particular.
The Asian financial crisis during the late 1990's slowed down the demand and production of the auto industry, and did not reach pre-currency crisis levels until 2000. However, with the continued strong production growth of the automotive industry in Asia, analysts suggest that the Asia/Pacific region will be a driver of industry growth worldwide. As the automotive manufacturing industry continues to grow in Asia, foreign investment has begun to increase substantially in Asia over the last several years. U.S. and European automakers have targeted the region by not only establishing a greater presence in the Asian marketplace, but also to expand its production capacity in Asia. In addition, there have been undertakings by both the U.S. and European automakers to collaborate with Asian automakers.
Japan’s Automobile Industry
The automotive industry represents a significant portion of Japan's economy, representing 13 % of its total manufacturing output and 10 % of employment. Japan is home to 11 automobile manufacturers consisting of: Toyota Motor Corp., Honda, Nissan, Mazda Motor Corp., Isuzu Motors, Ltd., Suzuki Motor Corp., Fuji Heavy Industries, Ltd., and Daihatsu Motor Co. Each of these automakers has manufacturing operations in the U.S. except Suzuki and Daihatsu. However, Suzuki is part of a joint-venture with GM, which is located in Canada.
The Japanese automotive industry relies heavily on exports with imports making up a much smaller percentage of auto trade. German automaker imports account for the greatest percentage of imports at nearly 70 %. Japan is also the third leading producer of motor vehicles after the U.S. and the EU while the U.S. is its largest vehicle export market. However, Japanese automobile production has fluctuated downward over the last several years and like the auto industries in the other regions; the industry has also experienced major restructuring, which is a result of a downturn in domestic demand.
Japanese automakers have responded to recessive domestic economic conditions by reducing production capacity through plant closures, and have offered equity ownership to foreign automakers to receive financial and managerial assistance. GM has equity in Suzuki and Subaru and controlling interests in Isuzu; Ford has majority equity in Mazda; DaimlerChrysler has majority equity control in Mitsubishi; and Renault has controlling interests in Nissan.
South Korea’s Automobile Industry
Presently in South Korea, there are seven automobile manufacturers, which include: Hyundai, Daewoo, Kia, Samsung, Asia Motors, Jinda, and Ssangyong. South Korea is the world's third largest automobile exporter, exporting 41 % of its total motor vehicle production, with roughly 35 % of the exports going to the U.S. South Korea is the 6th largest automobile market, however imports makeup less than 1 % of motor vehicle trade in the domestic market.
Prior to 1987, foreign auto imports were prohibited and Japanese automotive imports were not permitted until 1999. South Korea's automotive industry has also experienced restructuring. In 1999, Hyundai acquired Kia and Asia Motors, and sold 10 % of its equity to DaimlerChrysler in 2000; Daewoo purchased 52 % equity in Ssangyong in 1998; and GM purchased 42 % equity of Daewoo; and in 2000, French automaker Renault purchased Samsung Motors.
Currently, South Korea has no independent auto manufacturers. DaimlerChrysler and Hyundai Motor Co. have formed an alliance in which DaimlerChyrsler will acquire 10 % equity in Hyundai. Korean automakers have made efforts to join in collaborative ventures with foreign automakers and sold significant portions of its equity in order to continue to operate in the domestic market, as well as receive financial assistance.
Industry specialists suggests that in order to become more competitive and efficient in both the domestic and foreign markets, Korean automakers must consolidate platforms domestically and with foreign partners; create strategies that more efficiently utilize regional sourcing; and enhance production and production platforms, as well as supply networks.
China’s Automobile Industry
China's automobile industry continues to grow rapidly. Chinese government officials have initiated policies that are intended to encourage the continuing development of China's domestic automobile manufacturing industry. It is projected that by 2010 after overcoming some major technical problems, China will become one of the world's largest automobile markets with domestic production reaching 5 million units.
The automobile industry in China is composed of 120 vehicle manufacturers; employing nearly two million workers. The FAW Group is China's first large-scale motor vehicle producer, which has an agreement with Volkswagen to produce Jetta and Audi sedans. The second largest automaker is the Dong Feng Motor Corporation with three major production facilities in the Hubei province. The Shanghai Motor Group, the third largest automotive producer in China, began producing cars during the 1960's. It established a joint-venture with Volkswagen in the 1980's that has contributed to the increase in automobile production in China's domestic market.
Despite China's growing auto industry, industry productivity lags behind the other Asian competitors, and it lacks the ability to conduct research and development, relying on its foreign partners to develop new vehicles. Chinese automakers are presently creating new policies and methods through foreign joint-ventures to continue the development of China's automotive industry, but at this stage, China's automotive industry still remains underdeveloped both technically and managerially. These conditions present a significant challenge for China's automotive industry, and it is expected to take a considerable amount of time before China becomes a global competitor in the automotive market.
South East Asia Automobile Industry
With strong revenue from oil & gas, the Malaysian government embarks on the National Car Project in 1981. And by 1983, Heavy Industries Corporation of Malaysia and Mitsubishi Corporation signed an agreement to produce Malaysia first home manufactured car. That car, Proton Saga was officially launched on July 1 1985.
South East Asia has become a fast growing region in automobile production and assembly centre. Thailand often called the “Detroit of Asia” is now a very important manufacturing hub for many Japanese and foreign brands. Producing more than one million cars per year Thailand’s automotive and auto parts industry, worth around US$18 billion, represent approximately 12% of the country GDP.
The South East Asian regions represent a potential high growth area for the automobile industry. Besides Malaysia and Thailand, smaller producers such as Indonesia and the Philippines also represent the future hotbed for the region’s automotive manufacturing activities.
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The Automotive Posters
The Automotive poster series is another unique range in our family of “Industry Specific” indoor billboard posters. The Automotive posters are A1 and A2 size one-sided color indoor billboard targeting the Global Automotive Manufacturing Industry.
Presently the Automotive poster series consists of three automotive posters covering three major regions namely, Europe, America and Asia. Each regional market is unique and they are all very important global automotive production centers. These posters are in categorized format which mean they each contain an area to showcase suppliers’ products and services logos. The main body of the poster consisting of the regional map area will highlight the location of major automobile manufacturing sites. In short, these automotive posters are a pictorial demonstration of automakers with suppliers’ relationships.
The posters main distribution channel is through the entire automotive trade shows and other automotive engineering related trade events. With a total circulation of more than a quarter million posters annually, the uniqueness of the automotive posters is that it reaches the length, breadth and depth of the automotive market. Included in these posters is an annual calendar. It can be wall mounted which provides all year round branding coverage for sponsors and advertisers. In additions these sponsors and advertisers may also obtain personalized poster copies for their own distribution as corporate gifts.
Each sponsors and advertisers are provided with an area within the poster to customize their messages to the international automotive marketplace. Messages can include corporate logo, contact information, agents’ information, corporate mission statement and corporate slogan. These spaces are hot stamped in either gold or silver color foil to promote their company and brand information. The Automotive posters are re-printed throughout the year for the latest information updates and trade show distributions. A digital version is also available on our web portal, techposter.com in which the corporate or product logos are linked to its respective companies’ websites.
Besides publishing the Automotive posters in the categorized format, we will in the near future produce regional Automotive posters and maps for China, Japan, Germany, USA, UK, France, Korea, Malaysia, Thailand and other countries in a map locator concept. The map locator concept is posters with each outline of the targeted country’s map drawn in the poster; and within the country map where companies can show their product or manufacturing facility drawn next to their corporate logo or brand.
The Automotive poster series are renowned for its “Prestige”, “Recognition” and “Exclusivity”. It is “Authoritative” and is especially crafted and reserved only for automotive related companies who believe in making waves in the industry. Being a very popular showpiece, it is a huge success with the global automotive communities and a key discussion subject at major automotive events. Companies that place their logos on the posters will be greatly rewarded and will benefit from these vast exposures.
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Automotive Europe Poster
The European automotive industry is the most important manufacturing sector in Europe. It is often referred to as “The Engine of Europe”. About 2 million people are employed directly in the manufacture of vehicles and components, representing 9 % of all manufacturing employment or nearly 15 % of total European Union workforce. In all, the European automotive production supports 12 million mostly highly skilled jobs in related industries.
Europe is the world largest motor vehicle producer representing more than 40% of the total world production of passenger cars alone. Of the world approximately 60 million new motor vehicle registrations annually, one-third comes from the European countries. Members of the European Automobile Manufacturers Association (ACEA) which accounts for 95% of all passenger cars produced in Europe contribute 33 billion Euros annually in investment and 19 billion Euros in R&D expenditure worldwide. Together ACEA members produce around 17 million vehicles with an annual turnover of more than 280 billion Euros.
The Automotive Europe poster is specially created to highlight Europe key automotive markets, the vital and dynamic component of the European fabric, and a key factor for the “Health and Wealth” of Europe. The poster will show major automobile producers and its large expanse of key suppliers supporting this very important European industry.
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Automotive Americas Poster
The automotive industry is one of the largest industries in the United States. New vehicle production, sales and other jobs related to the use of automobiles are responsible for 1 out of every 10 jobs in the U.S. No other industry supports so much manufacturing or generates more retail business and employment opportunities. For every worker directly employed by an automaker, over 10 spin-off jobs are created. America’s automakers are among the largest purchasers of aluminum, copper, iron, lead, plastics, rubber, textile, vinyl, steel and integrated circuit chips.
The American automotive industry is dominated by three major companies, namely General Motor, Ford Motor and DaimlerChrsyler. These three companies produce three quarter of all cars and trucks made in the United States. Together with the Japanese, Korean and European manufacturers they produce more than 12 million motor vehicles annually. With a total investments of nearly US$200 billion in the automotive industry since the 1980, these three manufacturers presently provides US$16 billion in annual R&D investments; more than any other industry in the United States.
The Automotive Americas poster seeks to highlight the importance of the automotive industry throughout the North, South and Central Americas. Showing major producers in the United States to local and foreign makers in Canada, Mexico and South America, it described the location of these manufacturing facilities. The categorized product and services format also display logos of leading manufacturers and suppliers. From these automobile makers, suppliers and support industry to distribution channels, the poster emphasizes the important client-supplier relationship in the American automotive industry.
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Automotive Asia Poster
The Asian motor vehicle industry is comprised of three 'core' manufacturing regions, Japan, South Korea and China. Together these three major automotive markets occupy a place of strategic importance in the global automotive industry. With the Korean and Chinese automotive markets continuing to grow rapidly, many analysts predicts that these two markets will surpass that of Japan within a decade. Leading automakers’ in Asia, especially those in China also enjoy prospects of strategic growth positioning coupled with the benefits of being located in a global outsourcing hub.
There are more than 100,000 companies involved in manufacturing components and finished vehicles in the nine Asian countries These countries, China, Japan, South Korea, Malaysia, Thailand, Indonesia, Philippines, India, Pakistan, plus Australia, collectively employ about two million people directly in the automotive industry. They in turn provide work for millions more who drive, repair, fuel and sell these vehicles.
The Automotive Asia poster is a platform to highlight Asian based automakers and its relationship with the global suppliers. Within the confine of the poster, main manufacturing areas are depicted by pictures of the vehicle brand that is being produced by that plant. Key suppliers that support these manufacturing facilities are shown in products and services categories. Major suppliers and service providers are showcase by their brands represented by their corporate or product logos. Together with an attached yearly calendar, the Automotive Asia poster is an attention grabber which makes it a very beautiful and attractive wall poster calendar.
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