Automobile Industry

Group 3
Matt Davis Charlie Kim Adam King Brian Larson Sean Redmond Andy Schick

S.W.O.T. Analysis

Ford General Motors Daimler/Chrysler

Major Strengths

Ford Motor Company

Diversity

Jaguar Volvo Mercury Lincoln Mazda Land Rover

Second Largest Automaker in the World Owns Hertz Rent-A-Car Ford Motor Credit

Ford Strengths

Supportive
Gave Generously after the September 11 Attacks Give Generously to Help Fight Breast Cancer Support Racing Teams

NASCAR Formula One Etc.

4th on the Fortune 500 List (U.S. only) 4th on the Global 500 List 39th on the Best Companies for Minorities List

General Motors Company

Worlds Largest Auto Manufacturer

In 2000, Sales Exceeded $183 Billion Globally Gaining $5 Billion in Profits

Manufacturing Facilities in Over 30 Countries Sell Vehicles in Over 200 Countries As of 1999, GM Held 15.1% of the Automobile Market

GM Strengths

Diversity

Chevrolet, Pontiac, Buick, Oldsmobile, GMC, Cadillac, Saturn, Hummer, Saab

on Fortune 500 List on Global 500 List

Dominance
3rd 3rd

Alliances with Suzuki and Isuzu Motor Companies Technological Alliances with Toyota and Honda Motor Companies Setting the Standard

Daimler/Chrysler

Leaders in the Mini-Van Lines of Automobiles

Became More Sleek Looking with Time

Sebring

Leaders in the Convertible Lines

Major Weaknesses

Ford Motor Company

Firestone Tire Recalls

Caused Stock Price to Suffer--$14.70, Lowest in Years

CEO Jacques Nasser and Chairman Bill Ford Jr. Cannot Get Along

This past Week, Bill Ford Took Over as CEO

Cash Reserves Have Sunk to $4.1 Billion

$13 Billion on Acquisitions $3.5 Billion to Cover Tire Recalls

General Motors

Recalls Have Hindered Growth

314,000 Mini-Vans made between 1997-2000 Repair Power Sliding Doors

Maybe Too Diverse?

Might Lose Focus on Some Lines

Daimler/Chrysler

Lack of Diversification Feel the Need to Refurbish Older Lines to Stay Competitive Smaller Share of the Market than Ford or GM

Opportunities

Ford Motor Company

More Environmentally Friendly

Cleaner Engine Emissions Working With Environmental Groups to Help Clean the Environment Solar Power

Generosity

Giving to More Charities

General Motors

GMAC Financial Services

Mortgage, Auto, and Business Financing

Electronic Business and Digital Technology

Direct TV OnStar System

Becoming More Environmentally Friendly

Daimler/Chrysler

State-of-the-Art Technology Center in Auburn Hills, MI

Hard at Work to Keep Chrysler Competitive

Need to Expand More Into Foreign Markets

Threats!!!!

The threat are really the same across the board for the automobile industry. Competition is huge, in this industry, and nothing hurts a company more than internal strife, as is the case with Ford Motor Company. Also an impending recession does not smile upon any industry in this day and age.

Toyota Strengths

Partnerships EPA Global 500 Award #1 of Japanese Producers SUVs

Toyota Weaknesses

Poor Website

Toyota Opportunities

Hybrid Engines Matrix

Toyota Threats

Consumer Confidence

Honda Strengths

Used Cars Honda Insight Popularity

Honda Weaknesses

Europe Passport

Honda Opportunities

Alliances Fuel Efficiency

Honda Threats

Second Movers

Nissan Strengths

Teams Revival Plan

Nissan Weaknesses

Low Market Capitalization Renault

Nissan Opportunities

Revival Plan

Nissan Threats

Low Market Share Losing Company

Porter's Five Forces in the Automobile Industry

Charlie Kim

Five Forces Within Auto Industry

Threat of New Entrants Bargaining Power of suppliers Bargaining power of buyers Threat of substitute products Rivalry among competing firms

Threat of New Entrants

Slow sluggish state of economy

Personal consumption declined from 4.5 to 2.9% Productivity decreased in manufacturing level

Automotive sector has no space for new entrants

Small demand base and wide choice

High Fixed cost and constant R&D

Bargaining Power of Buyers and Suppliers

Automakers design and assemble, suppliers have little responsibility

Trust has been scarred by Ford-Firestone problem. Essentially little power is given to suppliers

Japanese emphasize trust in suppliers allowing for collaborative design efforts

Corporate culture allows for such an arrangement to work

Bargaining Power of Buyers

Customers take over management of worlds car business.

Over capacity - wider choice zero switching cost More discerning customers Dealer Freedom Better-quality products

Consumers take advantage of current quality in product

Threat of substitute products

Natural gas Electricity Ethanol Vegetable oil Sunlight Water

Intensity of Rivalry among Competitors

Gas crisis during 1980s and 90s

Foreign Trade increased intensity of rivalry

Export becomes essential to expanding and competing

Financial Comparision
Price Mkt Cap P/E F DCX GM HMC NSANY TM Industry S&P500 16.21 35.4 41.84 73.87 9.01 49.32 29.4b 35.5b 23.01b 35.99b 17.9b 91.2b 49.73 NM 28.88 15.45 7.31 17.07 37.31 29.79 P/Sale s 0.19 0.28 0.14 0.64 0.4 0.88 0.27 3.68 ROE 4.08% -4.47% 2.61% 12.05% 43.51% 9.69% 0.93% 17.73%

Financial Comparison

Highlights

Strengths Weaknesses

General Environment

Demographic Segment
Population Age Internet Income Distribution

Sociocultural Segment
Jobs Women in the Workforce Consumers

Technological Segment
Environment Aluminum

Global Segment

Economic Segment

Very International, with the main places being United States, Europe, and Japan Historically auto stocks move with direction of North American sales cycle Until September U.S. retail car and light truck sales declined in nine of last ten months.

U.S. Economy

Struggling in recent months Going to have to spend its way out of sharp downturn Congress considering temporary tax rebates and accelerate planned permanent cuts

Japan

Verging on deep recession Predict tax revenue shortfall of $1.1 trillion yen this year. Livestock industry seeking $104 b yen in aid for losses from Mad Cow in September

Germany

Economic growth increase moderately Inflation will fall Overspending on health and sharp economic slowdown raise deficit

Political/Legal Segment

Global Agreement on Vehicle Regulations Trade barriers

General Motors

Claim to be the pacesetter for the automotive industry Has the largest share of the worlds vehicle market at 15.1% Offer a variety of services including GMAC Strive for technological innovations such as the Onstar system

Ford

Passion for better ideas Pushing the limits of technology and design Striving to make the world a better place Concerned with environment and developing more efficient automobiles Built Ford tough

Daimler Chrysler

Striving to become the number one automobile manufacturer in the world Formed various partnerships to enhance access to various global markets Premium priced product Leader in innovative designs and styles

Honda

Manufacturers of a wide range of products Industry leader in fuel-efficiency and low emission technology Maintains values of a small company despite competing in a global market

Nissan

Slogan of thinking ahead Offer a sport edition for every model of car they produce Development of ecologically minded transportation Believe that design is the most vital contact they have with their customers

Toyota

Slogan is get the feeling Devoted to the customer and excel in customer service Local outreach programs High standards for dependability