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Factors governing the development of the global automotive industry

Some of the major factors that will govern the development of the global motor industry, whether in the developed, developing or transition markets, are outlined in the next graphic. These need to combine with the rapidly changing structure of the industry around the globe, as mergers, take-overs and joint ventures reduce the ownership of the manufacturing industry to six or seven global giants. The need for each of the major international players to develop their presence in all the major product sectors and throughout all of the major countries/regions of the world will be paramount, if they are to maintain their position on the world stage.

It is becoming ever more clear that the level of demand, once calculated, is only one of the ingredients of the new world model that will flow across all disciplines involved in the production, sale, maintenance, repair, scrappage and recycling of economical, technically advanced motor vehicles at affordable prices.

The diagram shows that raw levels of demand are subject to overview by many other factors.

These include:

• where vehicles will be produced/assembled, to ensure they are affordable in the new market place
• technical and technological developments, which may well employ new production techniques
• the development of new materials
• local and global legislation, which needs to run in tandem with most of the other elements shown here, rather than in advance or trailing behind any new developments, in particular, technical developments
• the need to examine new drive train mechanisms such as hybrid and pure electric vehicles to combat global warming and climate change concerns
• vehicle segmentation, as most new volume vehicles for the new markets are likely to be in the A and B sectors and suitable for local conditions, which normally means lower prices and tighter margins
• product quality and design, which will affect how vehicles are produced, repaired, maintained, warranted, scrapped and recycled
• the factory of the future, which may well be jointly owned, with even more developed flexible manufacturing systems and will need to vary depending on the level of technology able to be employed in each country
• the supply chain, as it moves to meet demand all across the world, whether in supplier parcs, as module suppliers or as assembly kits, complete with distribution systems
• the increasing disconnect between the developed, developing and transitional countries as new technical developments and techniques move beyond the ability of the developing world in the short to medium term
• the ability of nations to develop sufficient generating capacity and infrastructure to service an expanding hybrid and electric vehicle market
• the effect on the export of used vehicles, which sustain many developing countries, as the level of technology employed in the developed world move beyond the ability of the developing world to repair and maintain