Enter the characters you see below Sorry, we just need to make sure you’re not a robot. Opinions expressed by Forbes Contributors are their own. Steel has for long been the material of choice for automakers worldwide. The usage of steel has allowed automobile manufacturers to achieve how To Make Money In The Automotive Industry standards of strength and safety for their vehicles at relatively low costs vis-a-vis other materials. However, going forward the share of steel in automobile manufacturing is likely to drop, with automakers looking to comply with stringent regulations governing automobile emissions and fuel efficiency. One of the most pressing areas of concern and strategic thrust for automakers is compliance with changing regulations governing the automotive sector.
In order to tackle environmental concerns, governments both in North America and Europe have set specific targets for fuel efficiency and emissions reduction. In the EU, the target is to reduce average vehicular emissions from 130 grams of carbon dioxide per kilometer in 2015 to 95 grams of carbon dioxide per kilometer by 2021. In order to make cars more fuel efficient, manufacturers have been looking at ways to make their cars lighter. This has opened the door for other materials such as aluminum to eat away at steel’s market share.
As a result of the need to make their cars lighter, manufacturers have been incorporating a greater proportion of lighter materials such as aluminum and plastic composites in their vehicles. A case in point is Ford’s iconic F-150 pickup truck. Though this is a specific example, it is also indicative of a larger trend. In North America, average aluminum content in automobiles has increased by 44. 3 pounds per vehicle between 2012 and 2015, as compared to an increase of 10 pounds per vehicle between 2010 and 2012. Since aluminum is a lighter metal than steel, the increase in terms of volume of aluminum used in an average automobile is a better reflection of the increase in the scope of application of the metal.
Given the favorable regulatory environment, the scope of aluminum as a material used in automobile manufacturing is certainly set to increase. However, aluminum is a much more expensive metal than steel. Similarly, other lighter materials such as manganese and plastic composites are even more expensive. Thus, there is a trade-off between weight reduction and an increase in costs. There is an opportunity for new materials which balance low cost with weight reduction. Steel are investing heavily to produce advanced high-strength steels, in order to maintain steel’s position as the material of choice for the automotive industry.
These steels offer significant weight savings as compared to traditional steels of comparable strengths. In addition, the company has also unveiled other classes of advanced high strength steels such as the proprietary Usibor and the Fortiform range of steels, tailored specifically for automotive applications. D budget is devoted to developing solutions for the automotive market. Steel’s proprietary DUAL TEN and TRIP range of steels are also targeted towards the automotive sector. Such investments by steel companies will go some way towards maintaining the competitiveness of steel vis-a-vis other competing materials in the automotive market. However, given the increasingly stringent regulations pertaining to automobile emissions and fuel efficiency, reducing the weight of automobiles has become an extremely important consideration for automakers.
How To Make Money In The Automotive Industry Read on…
Enter the characters you see below Sorry, we just need to make sure you’re not a robot. 2010 was a part of a global financial downturn. The crisis affected European and Asian automobile manufacturers, but it was primarily felt in the American automobile manufacturing industry. Car companies from Asia, Europe, North America, and elsewhere have implemented creative marketing strategies to entice reluctant consumers as most experienced double-digit percentage declines in sales. Major manufacturers, including the Big Three and Toyota offered substantial discounts across their product lineups. In 2008, the Chinese government reduced automotive taxes in order to spur flagging sales.
In January 2009, Chinese auto-manufacturer Chery reported unprecedented monthly sales. Citing falling production numbers, the State Bank of India reduced interest rates on automotive loans in February 2009. For the first few months of 2009, Tata Motors conducted a widespread marketing campaign heralding the debut of the Tata Nano. Billed as “the people’s car”, the manufacturer hopes the low cost will encourage customers to purchase the vehicle despite the ongoing credit crisis.
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With high gas prices and a weak US economy in the summer of 2008, Toyota reported a double-digit decline in sales for the month of June, similar to figures reported by the Detroit Big Three. On 5 December 2008 Honda Motor Company announced that it would be exiting Formula One race with immediate effect due to the 2008 economic crisis and are looking to sell the team. Honda has predicted that there may be reductions among part-time and contract staff. Nissan, another leading Japanese car manufacturer, announced that it also would be slashing production and will reduce its output by 80,000 vehicles in the first few months of 2009. In December 2008, Suzuki, Japan’s fourth biggest car manufacturer, announced that it will cut production in Japan by about 30,000 units due to falling demand. The company is expected to face its first profit drop in eight years for financial year ending in March 2009. Reported in Bloomberg on December 23, 2008, that Mitsubishi Motors is to widen production cuts on falling demand.
The Japanese maker of Outlander sport-utility vehicles, will scrap the night shifts at two domestic factories as the deepening global recession saps auto demand. The carmaker will halt the night shift at its Mizushima plant, excluding the minicar line. Nighttime work at the Okazaki factory will stop from February 2. Toyota, on December 22, 2008, slashed profit forecasts amid a sales slump. 555 million for the year ending in March 2009. Their sales in the United States were down 34 per cent and were down 34 per cent in Europe as well. On November 4, 2009, Toyota announced its immediate withdrawal from Formula One, ending the team’s involvement in the sport after eight seasons.
The Hyundai Genesis named the 2009 North American Car of the Year. South Korean automakers have been generally much more profitable than their US and Japanese counterparts, recording strong growth even in depressed markets such as the United States. Hyundai-Kia’s continued success was unusual at a time when most automakers saw their sales falling sharply, with leading automaker GM even filing for bankruptcy. Hyundai-Kia took significant advantage of the prolonged automotive crisis by producing affordable yet high quality and well designed vehicles. Unlike others, this crisis turned into an opportunity for many South Korean automakers.
Korean automaker Hyundai offered customers who have lost their jobs to return a new-car purchase for a refund. During the fourth quarter of 2008 to the first quarter of 2009, which was the height of this automotive crisis, the extremely weak South Korean won, especially against the US dollar and Japanese yen, significantly boosted the price competitiveness of South Korean exports in key markets. Nonetheless, South Korean automakers were not completely immune to this automotive crisis and in December 2008 Hyundai Motor Company had begun reducing production at plants in the U. China, Slovakia, India and Turkey because of sluggish demand. The company missed an earlier projection of 4. However, the South Korean Ministry of Knowledge Economy said that there will be no liquidity provision at the government level for five automakers – Hyundai, Kia, GM Daewoo, Samsung Renault and Ssangyong.