Marketing Research on Automobile Industry Analysis (Research Paper Sample)

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Factors that have led to low profitability in the automobile industry in the United Kingdom
Over the past decade, the automobile industry in the country has been dynamic from the unstable labor relations to a fully transformed and very competitive industry. Different surveys have pointed out that cars manufactured are ranked top in the world, and the country has one of the best labor relations policy in the world. Despite the stable growth in demand, the automobile industry has experienced many structural changes that have led to some of the firms closing. An example is the exit of the British owned firm, MG Rover and the massive losses the Big Three (Chrysler, Ford, and GM) have incurred during their restructuring process. The entry of low-cost products from India and China may lead to the exit of more firms (Amighini, 2012). This paper aims at identifying that has led to low profitability and increase in competition in the industry.
Porter’s five forces (Threat of new entrants)
According to research on market trends, Japanese cars occupied 17% of the UK automobile market in 2007 Smith et al., (2016). Notably, South Korea has also entered the market and is gaining a competitive advantage by offering lowly priced models. Also, countries such as China are developing cheaper products that within the next few years will enter the western world. Dalgado et al., (2012) argues that competitiveness in any industry is defined by three main factors; micro economic conditions, infrastructure and the fiscal policy. Most automobile firms in the UK are struggling to keep up with the competition brought about by cheaper imports.
The UK automobile industry contributes a significantly to the national economy since it has employed approximately 129,000 people. Additionally, the UK has several well-established engine manufacturers who are an indicator of a strong industry. According to Howleg et al., (2009), the UK lacks an adequate local supply chain, and this adversely affects the automobile industry.
The car business is a standout amongst the most topographically divided segments and has experienced various changes lately (Türkcan and Ates, 2011). The patterns and examples portraying the generation procedure of the car business have been inspected by various researchers applying an extensive variety of systems. For example, the GVC structure has been utilized to investigate the effect of the 2007-2008 monetary crisis on the car estimation chain. Sturgeon and Van Biesebroeck (2010) noticed that the monetary crisis quickened the development and joining of forming countries into the business, with the ascent of rising economy automakers through various critical acquisitions, (for example, China's Geely and India's Tata Motors).
Moreover, developing economies are progressively going about as vital providers in the segment, with countries, for example, China and India additionally incorporating into the car manufacturing industry. China is progressively going about as a vital provider of transitional contributions to various driving automakers, including Japanese and Korean firms (Amighini, 2012).
Finally, several factors have affected the demand for certain products such as passenger vehicles. Also, the income levels of the consumers affect their tastes and preferences such that some UK citizens prefer importing certain types of vehicles that meet their taste.
Key success factors of automobile industry
Responsiveness to customer needs
According to Blackwell (2014), customer demands keep on changing with market trends. Vehicle manufacturers need to design their vehicles aligned in meeting these changing needs. For instance, the average customer does not only need to purchase a vehicle for mobility purpose but also considers security, consumption, and class. In this regard, Vehicle manufacturers need to target various market segments with the right vehicle model by matching the vehicle features to these needs.
Efficient production
As demand for cars increases in various parts of the world, vehicle manufacturers are tasked with increasing production to meet demand (Amighini, 2012). Despite the rush to beat the deadlines, the manufacturers still need to assemble vehicles efficiently. A compromise on efficiency may lead to the recall of vehicles which may have defects which may cost the company significant revenue. For instance, Toyota has been forced to recall its vehicles in the US market. Additionally, vehicle recalls because of lack of efficiency subjects the manufacturer to negative publicity and hence loss of business.