Analysis of Australian Car Manufacturing Industry 作业代写

Analysis of Australian Car Manufacturing Industry
 Analysis of Australian Car Manufacturing Industry  作业代写
Table of Contents
1.    Introduction. 2
2.    Current Situation of Australian Car Manufacturing Industry. 2
3.    Five Forces Analysis of Australian Car Manufacturing Industry. 3
3.1      New Entrants. 3
3.2      Existed Competitors. 4
3.3      Substitution Threats. 4
3.4      Purchaser Bargaining Ability. 4
3.5      Supplier Bargaining Ability. 5
4.    Conclusion. 5
5.    References. 6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.      Introduction
With the fast development of the global economy, more and more multinational companies choose to arrange the productive activities in the international market in order to make good use of the global resources and market potentials. In the car manufacturing industry, the global manufacture is quite popular because different countries have different competitive advantages in producing different parts for the car. But, the Australian car manufacturing industry began to shrink since the year of 2013. Most big car manufactures like Ford, Toyota, Holden and other famous brands begin to retreat from the Australian market. As a result, a series of car manufacturers choose to close down under the global retreating influences. In the report, it will analyze the Australian car manufacturing industry combing related economical theories including the economics of scale, reduction of tariff, changing customer taste and five forces theory in a comprehensive way. The focus of the report is the five forces analysis of the Australian car manufacturing industry.
 
2.      Current Situation of Australian Car Manufacturing Industry
In the year of 2012, the car sales of the Australian car industry was 1.2 million and these cars include 65 different brands. To some extent, the Australian car industry is one of the most competitive industries in the whole international market. In a corresponding way, the Australian car manufacturing industry provides more than 0.4 million employment opportunities and it also motivates the prosperity of 150 car providers. But, the Australian car manufacturing industry began to shrink when it comes to the year of 2013. Firstly, Ford chose to retreat from the Australian market and Holden, Toyota followed Ford’s practice after six months. For example, Holden made a statement that it will close down all car factories in Australia and transfer the manufacturing into marketing correspondingly. After Holden’s statement, Toyota states that it would consider whether to carry out productive activity or not in the Australian market. On the basis, Toyota decides to cooperate with suppliers, main stakeholders and the government in order to make the organizational decisions.
From above analysis, it can be seen that the Australian car manufacturing industry began to shrink since when it comes to the year of 2013. The performance of Australian car manufacturing industry can be explained from a series of economical theories, which include the economics of scale, reduction of tariff, changing customer taste and five forces theory. With regard to the economics of scale, the car manufacturing industry is a typical industry of the scale economy. The population of Australia is only 20 million, which can not satisfy the market needs of these car manufacturers to a large extent (Narayanan, 2005). In addition, the car importing tax is quite low from the perspective of the reduction of tariff. For countries who have signed trade agreements with Australia, they can export duty-free cars to the Australian market. Even for these non-agreement countries, the tariff rate is only 5 percent, which can not put enough pressures to the cost of exported cars (Garnaut, 1997). In a corresponding way, the local car manufacturing ability will decrease with more cars importing from other countries. With respect to the changing customer taste, customers become pickier when they buy cars especially with the fast improvement of the social life and the fast development of the globalization (Revelt, 2000). Correspondingly, Australian customers will have more choices in the process of buying the car. As a result, local Australian car manufacturers will face furious competition from the global competitors not just these domestic manufacturers to a large extent.
 
3.      Five Forces Analysis of Australian Car Manufacturing Industry
The five forces model can analyze the Australian car manufacturing industry in a comprehensive way. In the part of the report, it will analyze the new entrants, existed competitors, substitution threats, purchaser bargaining ability and supplier bargaining ability in detail.
 
3.1  New Entrants
With regard to the new entrants, the local manufacturers’ competitive power is not strong enough to threat these multinational companies. These cars exported from foreign markets put huge pressures to the Australian car manufacturing industry to some extent. The decreasing of the exporting tax attracts a lot of foreign car manufacturers to export duty-free cars to the Australian market (Fleischmann, 2000). As a result, these exported cars bring a series of challenges to the development of the Australian car manufacturers. In a corresponding way, more and more multinational companies choose to retreat from the Australian car industry in order to avoid furious competition from these imported cars.
 
3.2  Existed Competitors
The Australian car industry has strong regional development trends and most car manufacturers locate in Melbourne, Adelaide City and other regions. Australia has only four historical car brands including Holden, Ford, Toyota, and Mitsubishi. These four car manufacturers face furious competition from each other because the total market volume is limited. The total population of 20 million in Australia can not satisfy the fast development of these four car manufacturers to a large extent. The internal competition from the Australian market largely increases the survival pressures for these car manufacturers. At the same time, more and more domestic car brands become competitive in the Australian car industry.
 
3.3  Substitution Threats
As to the car, there are a lot of substitutions in the daily life and these substitutions include motorbike, bicycle, train, metro, plane, train and others. Especially with the traffic jam becoming more and more serious, more and more modern people choose the public transportation when they go out instead of the personal cars. Correspondingly, the phenomenon will badly affect the market performance of the Australian car manufacturing industry to a large extent. At the same time, the whole society advocates the public to use the public transportation in order to protect the environment. As a result, the personal car is less used than before.
 
3.4  Purchaser Bargaining Ability
With the fast development of the global economy, modern people can buy various kinds of cars from foreign markets at quite low prices. In addition, the implementation of the information technology, modern people can get latest information of the car industry quickly and they can compare different car brands in a comprehensive way (Clark, 2010). On the basis, these customers are in the advantaged position when buying cars from these car manufacturers to a large extent. The increasing of the purchaser bargaining ability largely threats the development of the Australian car manufacturing industry. With the decreasing of the profitability, the Australian car manufacturers will definitely lose benefits in developing the Australian car market in a corresponding way.
 
3.5  Supplier Bargaining Ability
The car manufacturing industry has the typical character of the scale economy. Usually, suppliers for the car manufacturers also provide a series of other parts for other car manufacturers. In other words, these suppliers can largely decrease their dependence on their current buyers and they can transfer their marketing easily. Under the background, the Australian car manufacturers are in a disadvantaged position when they purchasing parts from these suppliers. Unless car manufacturers produce parts by themselves, they will be controlled by these suppliers to some extent. As a result, the supplier bargaining ability increases and the car manufacturers will also be badly affected by their suppliers.
 Analysis of Australian Car Manufacturing Industry  作业代写
4.      Conclusion
In the report, it analyzes the car manufacturing industry in Australia in a comprehensive way. In the process, the report uses a series of economical theories, the economics of scale, reduction of tariff, changing customer taste and five forces theory, to analyze the Australian car manufacturing industry. With regard to the scale economy and reduction of tariff, the local car manufacturing ability will decrease with more cars importing from other countries. With respect to the five forces analysis, the Australian car manufacturers face a series of challenges from new entrants, existed competitors, substitution threats, purchaser bargaining ability and supplier bargaining ability.
 
5.      References
Clark, P. 2010. Scale economies and intra-industry trade. Economics Letters, vol.108, no.2, pp. 190-192.
 
Fleischmann, M. 2000. Strategy, Scale or Policy? Exit in the Australian Car Industry. School of Economics La Trobe University Working Papers, no. 2000.14.
 
Garnaut, R. 1997. Australian Cars in a Global Economy. The Australian Economic Review, vol.30, no.4, pp. 359-373.
 
Narayanan, V. 2005. The Relevance of the Institutional Underpinnings of Porter's Five Forces Framework to Emerging Economies: An Epistemological Analysis. Journal of Management Studies, vol.42, no.1, pp. 207-223.
 
Revelt, D. 2000. Customer-Specific Taste Parameters and Mixed Logit: Households' Choice of Electricity Supplier. UC Berkeley Department of Economics, Working Paper, NO. qt1900p96t.
Analysis of Australian Car Manufacturing Industry  作业代写