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Free Automotive Industry Essay Sample

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An automotive industry is an industry whose main interests are in vehicles. It designs, produces, and sells vehicles. This is a global industry with most big companies coming from South Korea, United States, Japan, Germany, and China. These may include, the Toyota Company of Japan,, General Motors of United States, Volkswagen Group of Germany, Hyundai of South Korea, Honda of Japan, Nissan Motors of Japan and Mitsubishi of Japan which are global companies (Norcliffe, 2006).

The automotive industry is an increasingly growing industry with the major players constantly upgrading their products to coincide with the changing customer preferences. People's living standard and the increasing need for a personal vehicle keep these companies in the market and ensure they attain the profit levels they desire. This increases competition between these companies. Competition for Market share and profit Margins sees the companies in make major developments in their new products, to keep up with the changing customer trends and technologies in the industry (Shimokawa, 2010). The major technologies developed in the industry lately include the invention of Renewable Energy Technologies, which is adopted by all of the companies in this industry. To keep with the regulation against global warming as required by the Kyoto Protocol, all these companies ventured into a Global warming reduction technologies.  The General Motors of the United States integrated the use of smart phones to interact with vehicle, and this was milestone at making the vehicles safe and smarter at the same time, maximising its market values. Another important technology development strategy is the invention of a Rapid Prototyping Electronic control systems which automates the engine mapping. This leads to high productivity levels as it saves time (Hubbard & O'Brien, 2008).


Automotive industry involves many companies aiming to grow and make profits, in relation to their products. Because of this, there are no doubt that constantly, managers, shareholder, company directors and owners of these company look for ways to grow and achieve the maximum benefits of their efforts. A company's growth is measured by the growth of productivity, and is important in analysing performance.  To measure productivity, the input cost, is measured against the output costs, in relation to technology, real costs savings. This is the role of technical change in measuring growth. In measuring an industry/ company's growth, technological advancements is analysed. This could refer to new equipments, or techniques used in production, or the embodiment of new products e.g. new designs and quality (Maxwell, 2010).

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Efficiency measurement is also important in growth measurement tool. Measure the efficiency of the production process. Has it attained its maximum output level? Does it need improvement, is it being utilised? Real cost savings is another strategy for measuring growth in a company. This is done by identifying the total costs saving during production and the capacity utilisation of a product. Growth can also be measured by benchmarking.  This is the process of comparing the industry/ company's performance and growth, against a competitor that is doing well, and also in relation to its past performance. Because all companies have employees who aid in different levels, like the producers, designers and sellers, one successful way to measure the company's growth is to analyse the per capita earning of the employees, right from the top most earner to the lowest earner. Their improved living standards are a clear indication of growth (Hubbard & O'Brien, 2008).

An industry's performance and growth goes hand in hand with its financial state and as that, its market values, savings, production costs and profits in analyzing the financial statement of any company. One frequently comes across terms like marginal costs and marginal revenues. These are very important as they help a company make decisions regarding advancements, marketing strategies and employees (if they need training, addition or cut down). A marginal cost is the additional costs incurred or required to produce. This can include additional administration cost, or labour costs. On the hand, marginal revenues are the additional revenue or income brought about by a unit product sale. As we see, these two help management decide whether to upgrade the current production unit or maintain everything as it is (Miller & Vandome, 2010).

In conclusion, the automotive industry, just like all the other growing industries in the world like the tourism industry, have tight competition and scramble for market value and profit maximisation. To do this, it upgrades its technologies with the market requirements, and the environmental requirements. Environmental requirements involve policies put by government bodies to ensure that this industry does not harm the environment, mean while market requirements deal with the production and shifting customer requirements. Because of the big companies involved in the automotive industry, competition is high, especially for the home based companies who are rarely noticed.

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