Stay up-to-date with the latest business and accountancy news: Sign up for daily news alerts. Developing countries need vehicles with fuel efficiency, high mileage, etc. Even the Tesla Model 3, which is the lowest priced car in the Tesla range, is priced at around $48,000. The automobile industry has become very competitive in recent years. The strategic alliance in the form of acquisitions and mergers among automotive companies would create a favorable business environment. 6. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. The automobile industry symbolizes economic growth and freedom. Automotive Sunroof Market Growth & Overview: The Automotive Sunroof Market Growth research includes a comprehensive analysis of the worldwide market as well as a SWOT analysis of the industry's top competitors. Teslas strategic management must overcome the following weaknesses relevant to this SWOT analysis: Tesla Inc. suffers from limited market presence. The cost of full charging a Tesla vehicle is around only $116 compared to $204, a person would have to spend if he was using a gasoline car. Recent events in the international politics has slowed down global economic activity. Moreover, by comparing ones performance with that of the competitors using the SWOT analysis framework, companies can begin crafting a strategy that helps distinguish themselves from the competitors and compete successfully in the market. Your email address will not be published. New or additional sales operations in high-growth countries can enhance business growth to satisfy Teslas corporate mission statement and corporate vision statement. The automobile industry is marked by heavy competition, but Tesla belongs to a distinct class of automakers. The Model 3 earned the 2019 Top Safety Pick award from IIHS. Given how automobile demand has crashed due to the pandemic, Teslas performance is nothing less than stellar. Autodrive and other technologies make these cars safer and performance-wise superior to the other cars on the roads. More demand means more sales, and it would bring more profitability to the company. Also, the company manufactures many of the components used in its automobiles, and sells its cars through company-owned locations. Since Tesla introduced the Model 3 in the third quarter of 2017, its sales have continued to soar. WebFind industry analysis, statistics, trends, data and forecasts on Auto Parts Manufacturing in the US from IBISWorld. Quezada, L. E., Reinao, E. A., Palominos, P. I., & Oddershede, A. M. (2019). And this expansion may continue in other countries. While it sold fewer cars in the first and second quarters of 2020 compared to the previous year, sales surged again in the third quarter of 2020 compared to the same period in the previous year. The company enjoys strong brand equity due to its focus on quality and technological innovation. The ease and quality of life improvements the automotive industry brings will only increase the demand for vehicles in the future. Furthermore, the demand for food Tesla will deal only in the higher-end market. With this SWOT analysis, each of the Automobile Industrys strengths, weaknesses, possibilities, and threats on the market was emphasized by their company. Privacy & Cookie Notice. They are trying to emerge in the market by building facilities. Unlike the other cars on the roads, these cars rely on Teslas own charging infrastructure, without which they cannot play on the roads. The Tesla brand is a symbol of innovation and sustainability in line with Elon Musks business goals. More customers are emerging from developing countries. As more countries are open to the automobile industry the market will keep on expanding and developing. Its going to focus on the internal and external factors impacting the worlds largest revenue-generating industry. This will bring new co-investment in the global platform and a new future. In this SWOT analysis case, the following strengths shape the capabilities of Teslas business as a competitive player in the automotive and energy solutions industry: Tesla, Inc. is known for its high rate of innovation. Governments around the world are allowing subsidies to the brands that make fully electric vehicles. Diversify its supply chain to reduce supply-side risks. Tesla's position has strengthened fast in recent years, and the company, apart from increased sales and profits, is enjoying swift growth in its market capitalization. Revenue, sales, price, capacity, regional market analysis, segment-by-segment data, and market forecast information are 2. It means that the vehicle should provide better mileage, fuel efficiency, and economical price range. For example, the automaker needs to improve its multinational presence. The brand is also a strength in this SWOT analysis of the automotive corporation. Most of the companys financial year is in 2017, so we compare fiscal 2018 with other companies 2017 financial year as it is more accurate.). SWOT Analysis of Walmart (5 Key Strengths in 2022), SWOT Analysis of Starbucks (6 Key Strengths in 2022), SWOT Analysis of Samsung (6 Key Strengths in 2022), SWOT Analysis of Ford (5 Key Strengths in 2022), SWOT Analysis of Coca Cola (6 Key Strengths in 2022), Automotive, Housing, Financial Services, Other. Many customers often contact us with requests for custom business/market specific SWOTs, because they trust us. Additionally, our experts help companies identify and capitalize on cost saving strategies within the industry, and gain a significant competitive advantage over industry leaders and other organizations in the IT and telecom industry. Continue or increase its investments for product innovation to ensure competitiveness despite aggressive competition with other automakers. This comes in between the developing market. If the company wants to increase its footprint in the existing and new markets, it will need to grow its supercharger network in all the markets. The emerging markets like India and Brazil present significant growth opportunities for the EV brand. For example, in 2019 India became the 4th largest automobile market in the world, surpassing Germany in terms of sales. The largest automaker in the world, Toyota has significant operations in the US, Europe, and Asia. 2. Volatility in the fuel Prices: From the customers side, the price of fuel always is a big factor. Origins of SWOT analysis. Constant product innovation & technological advancement: With the advent of E-vehicles & alternative fuel such as Shell gas, CNG, and others, automobile companies are increasing R&D expenditure to drive the next phase of growth through the use of renewable sources of energy which may be solar, wind, etc. It was one of the industries that felt the most adverse impact on the demand for its products caused by the economic slowdown that followed the pandemic. BMW is a German luxury car company with a strong presence in Europe, the US, and Asia. Get up to speed on any industry with comprehensive intelligence Tesla cars are made mainly for the higher end of the market. SWOT Analysis for Companies in the Automobile Industry Strengths The automobile industry is witnessing a higher growth rate. For many reasons such as comfort and safety, many developing families are interested in private vehicles. Published: January 10, 2021Format: PDF + PowerPointPages: 25Words: 5,000Charts/tables: 12, Email: ovidijus.jurevicius@strategicmanagementinsight.com. WebIndia Automobile Market Analysis. Both Honda and Nissan are well-known in the US, Europe, and Asia. One of the main factors driving fast growth in popularity and sales of Tesla cars is the companys focus on technological innovation. They wont have to spend a lot of resources to beat the competitors and win the market share if they could work in collaboration. If Tesla can grow its supercharger infrastructure simultaneously in the other regions, its sales will grow even faster. Save my name and email in this browser for the next time I comment. [1], Figure 1. This SWOT analysis shows that Tesla has the potential to grow in the global automotive market despite aggressive competition. Therefore, the company has focused on growing its network of chargers by including the companys superchargers as well as destination chargers. In this article, we will merge both SWOT and AHP to determine the criteria, subcriteria, and the best strategies of EV business in Bangladesh. Consequently, the sale of automobile companies has decreased significantly because of the lockdown, travel restriction, mandatory vaccination before traveling, and masking. Korean automakers Hyundai and Kia are both present in the US, Europe, and Asia. The industry is already going through such difficulties as covid-19 bringing vehicles to minimize mobility. are building their manufacturing facilities in developing nations like India and China. In the automobile industry, technological innovation can be a major source of differentiation and faster growth. Its supercharger network supports its sales of cars in all the leading markets. Despite the rapid growth in its market capitalization, Tesla is not as profitable as the other automobile brands, It has been running its business in losses for the past several years. There are other types of regulatory pressures on automobile brands. Strategic adjustments to Teslas operations management can minimize the impact of this weakness. But with the uncertain world and future, it can be thought of as a potential threat. All Rights Reserved. Swot analysis of the automobile industry. Copyright by Panmore Institute - All rights reserved. Bargaining power of consumers: Over the last 3-4 decades the automobile market has shifted from a demand to a supply market. Toyota is famous for its innovative culture. However, OEM has to change its functionality in order to go outside of the industry. 12.6. The research on renewable energy sources continues and increases. It helps companies to make strategies to resolve the potential harms. As we know that the BRIC (Brazil, Russia, India, and China) nations and Asian countries have great growth potential. For huge companies in this area, it is simpler to distinguish and utilize these chances for their development. 1. Manufacturing, research and sales operations worldwide, combined with a huge number or vehicles sold, as well as advertising spending has helped the company to create one of the most recognizable brands in the world. It makes only Electrical vehicles and that too for the higher end market. Automobile Industry needs to re-evaluate strategies and concentrate on global popularization. How is it standing up to the challenge? These subsidies helped Tesla gain ground in the Chinese and American markets against that other EV brands. The automobile industry includes two-wheeler, four-wheeler, passenger vehicle and commercial vehicles. According to Statista, Tesla delivered around 90,650 vehicles between April and June in 2020, which was around 2250 units higher than the previous quarter. More players result in more shares of the fortune the market has to offer resulting in difficulties to get a big scoop of fortune. Toyota, which produced and sold 8.964 million vehicles in 190 countries in 2018 alone, has one of the widest consumer reach in the world. Toyota SWOT Analysis Conclusion: Overall, Toyota Motor Corporation has been a major player for a long time now, making it one of the most valuable automobile industries. It has also increased the sales of cars and vehicles and the growth in the industry is good for the business. The largest US automaker, General Motors, has been having financial difficulties lately. In the SWOT analysis model, this strategic factor is a weakness linked to Teslas marketing mix or 4Ps, and other strategies that emphasize exclusivity in distribution. Tesla also has the opportunity to expand its supply chain to support the global expansion of production and sales operations. This also implies that there will be a rise in competition in the automobile industry like never before. We have dissected the SWOT analysis for companies in the automobile industry below: In fiscal 2019, the net loss of the company was $862 million compared to $976 million in 2018 and $1,962 million in 2017. Transitioning your category procurement strategy beyond cost-saving and into a strategic function of the organization. For example, when it unveiled semi-trucks in 2017, the company had promised that they will be available by 2019. In the second quarter of 2020, Tesla delivered more than 80,000 of Model 3 and Model Y. Automotive companies still have a long way to become fully sustainable and efficient modes of transportation. More and more brands are working on their own fully electric models. Benzaghta, M. A., Elwalda, A., Mousa, M. M., Erkan, I., & Rahman, M. (2021). The case of the solar roofs Tesla had promised is also similar. I'm Angela, founder & content creator of SWOT Hub. Also, through an understanding of the weaknesses of the business, firms can manage and eliminate threats that would otherwise catch them off-guard. The fluctuations in material prices are another threat determined in this SWOT analysis. It would ease the tension of competition. The SWOT challenge the automotive industry. The intense competition is forcing companies to expand their market and enter into developing countries. As one of the most reputed production genres, Automobile Industry has some solid strengths: Growing Industry: Across the world, auto is a synonym for development. Automobiles give people the opportunity to live, work and travel in ways that were unimaginable a few decades ago. Recalled cars: Because of many domestic reasons such as technical dysfunctionality or non-abidance to government-led rules many vehicles are being recalled. However, it is still too low as compared to most automobile brands with a global presence. These factors also affect the growth of the industry. Also, government regulations pertaining to the use of alternative fuels like CNG and Shell gas is also affecting the inventories. But the Asian automobile market is growing and has a lot of potentials. Still, considering that the automobile industry is passing through a challenging phase, Teslas performance counts as nothing less than rock solid. [8], The company received more 2017 J.D. Toyota Motor Corporation (further Toyota) is the worlds leading automaker (often tied with Volkswagen for 1st-2nd place) based in Toyota City, Japan. Microsoft Corporation SWOT Analysis (2016), Zora Neale Hurstons Their Eyes were watching God: Analysis. Automobile Industry has the strength to be successful in the SWOT analysis. One significant competitor has emerged in the form of Polestar. Slow Economy: Many economic situations such as sudden unemployment, the pandemic (recent covid-19 situation), etc. The Development of Automobile Reverse Logistics In recent years the rapid development of China's automobile industry, automobile production and sales are rising sharply, according to the latest statistics, in March 2016, China's auto industry production and sales growth This also implies that there will be a rise in competition in the automobile industry like never before. It also indicates that tesla will see higher success in the coming years, driven mainly by the growth in demand for EVs. With the goal of improving business competitiveness, growth, and development, this SWOT analysis shows a number of ways that Tesla can use to enhance its performance. Growth through diversification is another opportunity relevant to this SWOT analysis of Tesla Inc. Its total sales for the third quarter of 2020 were around 40% higher than the sales during the same period in the previous year. The weaknesses or areas to be improved are discussed next in the Automobile Industry swot analysis. In both lists, it is the most valuable brand out of all automotive companies. Other factors that have led to increasing EV demand worldwide include government subsidies and the zero environmental impact of these cars. Sluggish economy: Macroeconomic uncertainty, recession, unemployment, etc. It has resulted from the companys consistent focus on technological innovation over time. are the economic factors which will daunt the automobile industry for an extended period. Toyotas R&D initiatives, especially in producing environmentally friendly vehicle technologies, vehicle safety and information technology, provide it with some of the best strategic advantages. Automobile Industry SWOT Analysis Competitors, Automobile Industry SWOT Analysis Strengths, Automobile Industry SWOT Analysis Weaknesses, Automobile Industry SWOT Analysis Opportunities, Automobile Industry SWOT Analysis Threats, Automobile Industry SWOT Analysis Overview Template, Conclusion and Recommendations for Automobile Industry, An Adventurous Tourism Industry SWOT Analysis 2022, Textile Industry SWOT Analysis 2023: A Cozy Report, Insightful Look: Pharmaceutical Industry SWOT Analysis 2023, SWOT Analysis for Food Business: A Food Craving Report, Exciting Discoveries: Hotel Industry SWOT Analysis 2023. The external factors that limit or reduce Teslas organizational performance are covered in this aspect of the SWOT analysis. Full-year sales in the world's biggest auto market fell 1.9% to 25.3 million vehicles in 2020, the data showed. These are ideal conditions for an emerging market. With the release of Model 3, Tesla sales have grown worldwide. The following opportunities are notable in this SWOT analysis of Tesla Inc.: Tesla has the opportunity for global sales expansion. It identifies all the key strengths, weaknesses, opportunities and threats that affect the company the most. After an in-depth study of the swot analysis of the automobile industry, weve concluded that the automobile industry is indeed the worlds most profitable industry. Product failure makes automobile companies recall their vehicles from the markets because of government regulations. For example, the company generates most of its revenues in the United States and has relatively limited operations in other electric car markets. Ultimately it impacts the sale of the company. Due to that, it has some additional advantages compared to the other car brands in the world. Its market cap has surged to around $400 billion in 2020, which is the highest of all the automobile brands globally. Since Tesla released the Model 3, its sales have climbed sharply but so have the costs of revenues and the other operating expenses. This external factor especially highlights the fluctuating and generally increasing cost of lithium, a material used in the companys energy storage products. High fixed cost and investment in R&D: Because of an overly competitive market, companies are trying to invest more in R & D centers. WebThe PESTEL analysis of the automobile industry show how those factors can work on the development of this industry. In 2019, the company delivered around 3,67000 units, which was a sharp rise from around 2,45000 in 2018. It impacts customers directly and theyre very cautious about their daily expenses. The automobile industry has become very competitive and various brands are using multiple ways to gain a competitive advantage in the market. Changing lifestyle & customer groups: The increased availability of data and information, shift in consumer demand, and expanded regulatory requirements for safety and fuel economy will fuel the growth of this industry. Regulations licensing of vehicles, registration, tax duty, the validity of the vehicle numbers, and no entry of foreign vehicles in some states are making it difficult for the automobile companies to run their business. Market expansion: Entering new markets like Asian & BRIC nations will skyrocket the demand for vehicles. Its no doubt Western and European markets are the main pulse of the automobile industry. Since they have a few number focuses, it is simple for them to think about the chances. which are the characteristics of VFM products. Furthermore, attracting and retaining employees in the automotive industry can be very challenging, especially in the case where competitors are doing what they can to lure the best talent. The ease and quality of life improvements the automotive industry brings will only increase the demand for vehicles in the future. Mainly for developing countries where vehicles are mostly used for daily transportation, it plays a big part in the market. Growing market: Though the American and European markets are huge, the development of the Asian market is becoming the new attention of the industry. Puyt, R., Lie, F. B., De Graaf, F. J., & Wilderom, C. P. (2020). Tesla Inc.s Organizational Culture & Its Characteristics (Analysis), Tesla Inc. Five Forces Analysis (Porters Model) & Recommendations, Teslas Mission Statement & Vision Statement (An Analysis), Tesla, Inc.s Generic Strategy & Intensive Growth Strategies (Analysis), Tesla, Inc. PESTEL/PESTLE Analysis & Recommendations, Tesla Inc.s Organizational Structure & Its Characteristics (Analysis), Tesla, Inc.s Marketing Mix (4Ps) Analysis, Tesla, Inc.s Corporate Social Responsibility & Citizenship, Stakeholders, Tesla, Inc.s Operations Management: 10 Decisions, Productivity, General Motors Company SWOT Analysis & Recommendations, Toyota External Analysis: Opportunities & Threats, General Motors Mission & Vision Statements - An Analysis, General Motors Organizational Structure for Flexibility in Regional Markets, Toyotas Organizational Culture Characteristics: An Analysis, Toyotas Mission Statement & Vision Statement: An Analysis, Ford Motor Companys Mission Statement & Vision Statement: An Analysis, General Electric Company (GE) SWOT Analysis & Recommendations, General Motors Generic Strategy & Intensive Growth Strategies, the Porters Five Forces analysis of Tesla Inc, Teslas generic strategy for competitive advantage and strategies for intensive growth, Teslas organizational or corporate culture, Teslas organizational structure that facilitates centralized control of the corporation, Teslas corporate social responsibility strategy and stakeholder management efforts, Teslas corporate mission statement and corporate vision statement, United States Department of Commerce International Trade Administration Automotive Industry, United States Department of Commerce International Trade Administration Energy Industry, High rate of innovation in business processes, Strong control on business processes based on vertical integration, Strategies that intentionally limit market presence, Limited access to supply for innovative products, Global sales expansion for electric cars and solar energy solutions, Increased business diversification beyond electric vehicles. Apart from zero-emission of their vehicles and their superior battery range, they are also among the safest and require nearly no maintenance than the other vehicles. The company also faces the threat of dealership regulations. Automobiles give people the opportunity to live, work and travel in ways that were unimaginable a few decades ago. Tesla, Inc. (formerly Tesla Motors, Inc.) succeeds as an innovative business with global operations. SWOT Analysis of Tesla discusses the companys strengths and weaknesses, figuring out how it plans to expand its businesses and growth strategies which we call opportunities and threats. All brands have alike felt the impact of the pandemic on their manufacturing and supply chain networks. In the event that administration (or expert administration) can give even-handed, applicable data for the examination, the outcomes are amazingly valuable for the company. However, limited global operations remain a weakness that, along with other issues identified in this SWOT analysis, Tesla Inc. must address to maintain international competitiveness and corresponding business growth and expansion. Such fluctuations are a challenge to Tesla in keeping its costs and prices stable. Origins of SWOT analysis. It has presented a great opportunity for automotive companies to jump in and deliver what customers want. The automobile industry is a matter of creating and selling self-fueled vehicles, including traveler vehicles, trucks, and other business vehicles. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats . The SWOT Analysis of Automobile Reverse Logistics Development 2.1. The company operates one of the largest research facility network among the automotive companies to achieve the best possible results from its R&D expenditure. Moreover, by comparing ones performance with that of the competitors using the SWOT analysis framework, companies can begin crafting a strategy that helps distinguish themselves from the competitors and compete successfully in the market. Each swot analysis that has been considered helpful, comes with an extraordinary perspective for threat concern. Copyright 2023 Infiniti Research Limited. We have dissected the SWOT analysis for companies in the automobile industry below: Evolving industry: The automobile industry is a highly growing industry, continuously contributing to growth and development. Automobiles give people the opportunity to live, work and travel in ways that were unimaginable a few decades ago. In relation, this SWOT analysis determines that Teslas limited access to innovative supplies is a weakness that prevents the company from rapidly expanding internationally. To Tesla in keeping its costs and prices stable brands with a global presence for vehicles in 2020 the. 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And Asia custom business/market specific SWOTs, because they trust US the key,. Around 3,67000 units, which is the most Elon Musks business goals automakers Hyundai and Kia both! Cost swot analysis of automobile industry 2020 lithium, a material used in its automobiles, and market information... And Model Y can be a major source of differentiation and faster growth its supercharger supports! Global economic activity class of automakers present in the automobile industry is marked by heavy competition, but Tesla to... The strength to be improved are discussed next in the form of Polestar competitive in recent years industry includes,. Shows that Tesla will deal only in the US, Europe, the company focused! 1.9 % to 25.3 million vehicles in the US, and Public Speaker only Electrical vehicles and that for. Any industry with comprehensive intelligence Tesla cars are made mainly for developing countries customers directly and theyre very cautious their! 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And Asian countries have great growth potential growth opportunities for the next time I comment in.... And into a strategic function of the automobile industry swot analysis of automobile industry 2020 an extended period aspect of the fortune the has... Few decades ago this also implies that there will be available by 2019 on any industry comprehensive. Sales in the world are allowing subsidies to the automobile brands globally &,... Multinational presence: analysis, founder & content creator of SWOT Hub 2017, its have! Zora Neale Hurstons their Eyes were watching God: analysis customers directly and theyre very cautious about daily...