Individual Prep Week of Sep.25

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Economics

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Feb 20, 2024

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September 25th, 2023 Seminar Prep: Week of Sep. 25th Automotive Industry: Description of Industry: The automotive industry is all the companies and activities involved in designing, manufacturing, developing and modifying automobiles and automobile parts. It has been one of the world's most significant industries by revenue for some time now. Size of Industry: The global market size of the automotive industry was worth about 2.86 trillion US dollars in 2021, and the market was estimated to grow in 2022. In 2023, the automotive industry is worth 2.56 trillion US dollars. By the end of 2023, it is estimated that a total of 85.5 million will be sold, an increase of 66.7 million units sold in 2021. Although the industry has decreased recently, it is projected to keep increasing throughout 2024. The industry's growth rate has been calculated to be 6.9%, which means automakers can expect global sales to return to 90+ million by 2025. Industry Growth or Decline: During 2022, the industry had a growth rate of 8.1%. This growth rate is substantially large, but it explains why it is accruing due to world issues in the previous years, causing the industry to decline. In 2023, the growth rate is projected to be at 6.9%, which means the industry is continuing to grow but less significant than last year. Who are the Suppliers? Who provides our raw inputs to produce our products? The automotive industry relies on a vast network of suppliers to provide various components, materials, and services needed for the manufacturing and operation of vehicles. This supply chain is highly complex and has many companies contributing to the production and sale of vehicles. Due to the complex supply chain, it relies on a wide range of inputs to manufacture and produce its product. Are there many suppliers to choose from? Can you list some of the suppliers? The automobile industry can vary on how many suppliers they have to choose from depending on the components or services needed to produce that product. The geographical region can also make a difference in the number of suppliers. There may be numerous suppliers in some areas, while in others, there is limited. When there are many suppliers in the area, the choice of supplier is only sometimes the case. Automakers will consider factors such as cost and quality. The automotive industry is massive worldwide; some suppliers may be located internationally. A few examples are raw material suppliers, electronic and technology suppliers, energy suppliers, tool and equipment suppliers, labour, and many more.

September 25th, 2023 Who are the Buyers? There are several categories of buyers in the automotive industry as the industry is so massive; these categories contain consumers, government agencies, fleet buyers, transportation companies, and many more. These buyer groups play an essential role within the industry as their purchasing decisions influence vehicle production, distribution, and maintenance. Do we use an intermediary to get our final consumer? The automotive industry often relies on intermediaries to connect manufacturers with the final consumer. These intermediaries play essential roles in vehicle distribution, sales, and services. Dealerships are used as an intermediary and are the most well-known as they are independently owned businesses that sell new and used vehicles directly to consumers. Another intermediary is insurance companies, as they work closely with consumers to provide insurance policies that cover the vehicle. Are there many direct buyers or few direct buyers for our specific products? When it comes to the automotive industry, there are fewer direct buyers when it comes to the sale of vehicles. Automotive manufacturers are the direct sellers of vehicles to dealerships and fleet buyers. Typically, the automotive industry sales model involves the automotive manufacturers. Dealerships, as intermediaries, handle the sales process, financing, and service needs, making them the primary source of contact for most vehicle buyers. What are the substitutes for our specific product/Service? Substitutes in the automotive industry can be influenced by factors like environmental concerns, technological advancement, and changing consumer preferences. Some examples include public transportation, Bicycles and E-bikes, Carpooling, Electric scooters, rental vehicles and all other automobiles that can be used as transportation for people and do not require the purchase of a vehicle produced by automotive manufacturers.

September 25th, 2023 References: Carlier, M. (2023a, August 28). Global Car Manufacturing Market Size 2022 . Statista. https://www.statista.com/statistics/574151/global-automotive-industry-revenue/ Coffman, J. (2023, May 3). 2023 automotive supplier study . Deloitte United States. https://www2.deloitte.com/us/en/pages/manufacturing/articles/global-automotive- supplier-study.html Gao, P., Kaas, H.-W., Mohr, D., & Wee, D. (2016, January 1). Disruptive trends that will transform the auto industry . McKinsey & Company. https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/disruptive- trends-that-will-transform-the-auto-industry Murry, C., Biglaiser , G., Li, F., & Zhou, Y. (n.d.). Intermediaries and product quality in used car markets . Intermediaries and Product quality in used car markets. https://charliemurry.github.io/published_papers/Biglaiser_etal_RAND_2020.pdf Robinson , R. (2022, January 25). 2022 Global Automotive Consumer Study . Deloitte Canada. https://www2.deloitte.com/ca/en/industries/consumer/2022-global-automotive-consumer- study.html Wood, L. (2021, October 14). Global Automotive Market: Covid-19, Growth & Forecast 2020- 2030 - researchandmarkets.com . Business Wire. https://www.businesswire.com/news/home/20211014005505/en/Global-Automotive- Market-COVID-19-Growth-Forecast-2020-2030---ResearchAndMarkets.com/

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