Automotive Industry Market Analysis

Automotive Industry Deep Dive – PESTLE, Porter, SWOT

The motor industry is at a crucial stage of development, with rapid technological developments, changing consumer preferences, and changing regulatory environments. The world is increasingly concerned with the environment, and the industry is experiencing a major transformation towards electric vehicles and alternative fuels, which are reshaping the manufacturing and supply chain. The integration of smart technology, such as self-driving and connected functions, is redefining the driving experience and generating new opportunities for innovation. The industry faces many challenges, including disruptions in the supply chain, the volatility of raw materials, and the shortage of skilled workers capable of mastering the complexity of modern automobile technology. This report aims to provide a comprehensive overview of the current state of the motor industry, including its major trends, the competitive situation, and the impact of new technology on the future development of the industry and the relationship between consumers and automobiles.

PESTLE Analysis

• Political:
  In 2024, the automobile industry is under the influence of government policies aimed at reducing emissions of greenhouse gases. In the European Union, for example, the goal is to reduce car-emitted greenhouse gases by 55% by 2030, as part of the overall Green Deal. This policy is expected to have a significant impact on the automobile industry in Europe, which is expected to create more than 12 million jobs as automobile manufacturers adapt to stricter regulations and invest in electric vehicle (EV) technology.
• Economic:
  In the United States the average price of a new automobile will be $48.000 in 2024, up from $46.000 in 2023. This rise is due to the price of raw materials, which have risen by 15% year-on-year, especially lithium and cobalt, used in the batteries of electric vehicles. The unemployment rate in the automobile industry will be about 4.5%, reflecting the difficulties in the supply chain and the continuing labour shortage.
• Social:
  According to recent studies, it is estimated that in 2024 about seventy per cent of car buyers will opt for electric or hybrid cars. In addition to the growing awareness of the environment, the incentive offered by governments is also an important factor. In the United States, for example, it is possible to obtain a subsidy of up to $ 7,500 if you buy an electric car. In addition, the demography of car buyers is changing. Today, millennials and generation z account for more than fifty per cent of new car purchases, which is why car manufacturers have to adapt their marketing strategy.
• Technological:
  The world of motoring is undergoing a period of great technological development, particularly in the field of automation and in the field of communication. In 2024, it is estimated that over 30% of new cars sold will be equipped with a Level 2 or higher degree of automation. In addition, the investment in automotive technology is expected to reach $100 billion. Of this, a significant part is expected to be directed towards the development of artificial intelligence and machine learning for the safety and efficiency of the vehicle.
• Legal:
  In 2024, the automobile industry will be obliged to cope with a complex legal environment, particularly with regard to data privacy and cyber security. The Californian Consumer Privacy Act (CCPA) has been adapted and the maximum fine for each infringement of the rules can reach $ 7,500. By 2025, all new cars must be equipped with ADAS.
• Environmental:
  In the field of the automobile, the concern for the environment is at the forefront. The drive towards sustainable development is putting increasing pressure on manufacturing processes. It is estimated that by 2024, the automobile industry will account for approximately 15 per cent of the world’s CO2 emissions. This is why the automobile industry is looking to adopt greener manufacturing methods. Compared with a conventional petrol-driven car, the average carbon footprint of an electric car is approximately 68 per cent lower.

Porters Five Forces

• Threat of New Entrants:
  The car industry is characterized by high entry barriers in terms of capital, brand loyalty and compliance with regulations. However, technological innovations and the growing importance of electric vehicles have lowered some of these barriers, which have made it possible for new players to enter the market, especially in the niche segments.
• Bargaining Power of Suppliers:
  Suppliers to the motor industry have a medium degree of power due to the necessity of supplying specialized materials and components. There are many suppliers in the industry, but the growing trend towards electric and driverless vehicles will give some suppliers an even greater degree of power.
• Bargaining Power of Buyers:
  Generally speaking, the car market is one in which the customer has the most power to negotiate. Information is readily available and there are many alternatives. The emergence of the Internet has made it easy to compare prices and equipment, and competition between manufacturers has increased, bringing more innovations and better prices.
• Threat of Substitutes:
  Moderate. Public transport and other alternatives such as ride-hailing and electric scooters are becoming more popular. However, the private car still has a high value for many consumers, especially in regions where public transport is less developed.
• Competitive Rivalry:
  The automobile industry is characterized by intense competition between established and new entrants. In order to differentiate their products, the companies are constantly investing in new technology, which leads to an aggressive marketing strategy and price competition.

SWOT Analysis

• Strengths:
  • Strong global demand for electric vehicles (EVs) driving innovation.
  • Established supply chains and manufacturing capabilities.
  • Diverse product offerings catering to various consumer segments.
• Weaknesses:
  • High production costs associated with advanced technologies.
  • Dependence on fluctuating raw material prices.
  • Challenges in transitioning traditional workforce to new technologies.
• Opportunities:
  • Growing consumer preference for sustainable and eco-friendly vehicles.
  • Expansion into emerging markets with increasing vehicle ownership.
  • Advancements in autonomous driving technology creating new market segments.
• Threats:
  • Intense competition from both traditional automakers and new entrants.
  • Regulatory changes and stricter emissions standards impacting production.
  • Economic uncertainties affecting consumer purchasing power.

The automobile industry in 2024 is characterized by a strong demand for electric vehicles and the presence of well-organized production facilities. But it also has to contend with high costs and a heavy reliance on raw materials. Opportunities include the growing market for sustainable vehicles and the development of new technology. Threats include intense competition and restrictive regulations. The strategic focus is on innovation and market expansion.