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Managing In A Global Context: The Automotive Industry Essay Example

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Managing In A Global Context: The Automotive Industry

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Managing In A Global Context: The Automotive Industry. Majority technology and auto manufacturing firms are cognizant of the fact that the next wave of industry growth will likely come from the developing economies otherwise known as emerging markets. Many of them have been working to ensure that they hit the ground running in these new markets by establishing themselves early as market leaders. Today, Toyota has managed to increase their market presence in the developing world to 45% and they are planning to reach 50% by the year 2015. However, despite its apparent success at this, it is receiving stiff competition especially in the Chinese market, which is the fastest growing one in the developing world (Stephanie). General Motors that has been in the Chinese market longer is making proving the more popular brand in China where it has been after all for longer than Toyota.

In addition, some of the emerging markets are working on their own auto industry, which makes for a potential competition with the international brand. For example, China is leveraging on its labor-intensive economy to manufacture cheaper brands, which will counter the incursion of foreign car brands (Ingrassia and Joseph 12). Nevertheless, Automaker is not fazed most of them are using a two-pronged approach, one hand they want to develop cars that cater to the needs of customers in this new market and secondly to increase local production so as to avoid the cost of local import duties. Additionally, by manufacturing their goods in the target countries, they can reduce manufacturing costs by getting tax breaks from local governments to encourage diversification of investment. The emergence of markets has spurred automakers to develop a variety of vehicles specifically targeting them. For example, by 2015, Toyota intends to introduce eight new subcompact cars, which are specifically designed for markets such as India and Brazil (Lee, and H 3667). Another way the emerging markets are affecting the auto industry is that they are forcing them to manufacture vehicles locally rather than import them this, as aforementioned is quite expensive (Cusumano). Managing In A Global Context: The Automotive Industry.

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