Research Korner: Manufacturing Sector

Macro-Environment and Industrial Factors 	Affecting the Motor Car Manufacturers 	 	  	 	  	 	  	 	  	 	 	I.              	 	Executive Summary 	 	 	            	 	Macro- and industrial environment factors that are affecting the performance 	of major players in the industry focus on the economic and environmental 	factors. However, these two factors have a great impact on the perception 	and behaviors of the customers, therefore creating social changes, which 	will later on impact legislation and political entities. It had been found 	out that the global financial crisis affect the buying behavior of the 	customers, because customer tend to buy important things. On the other hand, 	due to the growing awareness of people towards health and the environment, 	people tend to substitute motor cars with more environmental- and 	health-friendly mode of transportation including walking and cycling, and 	public transportation, which not only help to save money in gas, lessen air 	pollution, but also push people to be physically active. Above all, the 	growing competition and the different governmental standards and regulations 	serve as primary barriers to new entrants. 	 	  	 	  	 	 	Table of Contents 	 	 TOC 	\o "1-3" \h \z \u 	 	I.     	Executive Summary. 	PAGEREF _Toc229307290 \h 1 	 	 	 	 	II.    	Introduction.. 	PAGEREF _Toc229307291 \h 1 	 	 	 	 	III.       	Background of the Industry. 	PAGEREF _Toc229307292 \h 2 	 	 	 	 	IV.      	Macro-Environment Analysis. 	PAGEREF _Toc229307293 \h 2 	 	 	 	 	A.    	Political 	PAGEREF _Toc229307294 \h 4 	 	 	 	 	B.    Economic. 	PAGEREF _Toc229307295 \h 5 	 	 	 	 	C.   Social 	PAGEREF _Toc229307296 \h 5 	 	 	 	 	D.   	Technological 	PAGEREF _Toc229307297 \h 6 	 	 	 	 	E.    	Legislative/Legal 	PAGEREF _Toc229307298 \h 6 	 	 	 	 	F.    	Eco-Environmental 	PAGEREF _Toc229307299 \h 7 	 	 	 	 	V.    Industry 	Analysis. 	PAGEREF _Toc229307300 \h 7 	 	 	 	 	A.    Threats 	of New Entrants. 	PAGEREF _Toc229307301 \h 10 	 	 	 	 	B.    	Bargaining Power of Buyers. 	PAGEREF _Toc229307302 \h 10 	 	 	 	 	C.   	Bargaining Power of Suppliers. 	PAGEREF _Toc229307303 \h 10 	 	 	 	 	D.   Threats 	of Substitutes. 	PAGEREF _Toc229307304 \h 11 	 	 	 	 	E.    Rivalry 	among Existing Firms. 	PAGEREF _Toc229307305 \h 11 	 	 	 	 	VI.      	Conclusion.. 	PAGEREF _Toc229307306 \h 11 	 	 	 	 	VII.     	References. 	PAGEREF _Toc229307307 \h 12 	 	 	 	 	VIII.    	Appendices. 	PAGEREF _Toc229307308 \h 12 	 	 	 	 	Appendix A: Automotive Industry and the Economy of the World. 	PAGEREF _Toc229307309 \h 12 	 	 	 	 	Appendix B: 2007 Car Production Statistics. 	PAGEREF _Toc229307310 \h 14 	 	 	 	 	Appendix C: Direct Employment in Automotive Industry. 	PAGEREF _Toc229307311 \h 15 	 	 	 	 	Appendix D: Market Share. 	PAGEREF _Toc229307312 \h 15 	 	  	 	  	 	  	 	  	 	 	II.            	 	Introduction 	 	 	Automotive industry is considered as one of the largest industries in the 	world which affects performances of nations and the lives of individuals in 	economic, environmental and social way. This is because it helped different 	countries to produce jobs, thus increase revenue by tax. On the other hand, 	it changes how people travel. On the other hand, even though the said 	industry is already established and mature, it is also affected by the 	different environmental and industrial factors, primarily the issue of 	global financial crisis, because it primarily affect the buying behavior of 	the customers. Aside from that, the major players in the industry are 	focusing on the different environmental factors including the issue of 	global warming and the growing popularity of hybrid cars. 	 	This 	paper will tackle the different factors that are connected to the macro- and 	industrial environment of the said industry by using information gathered 	from online and offline resources such as books, journal articles, magazine 	and newspapers. The author also used information from different reports of 	different organizations that are directly and indirectly connected with the 	industry. Online libraries were also used in order to speed up the process 	of gathering data and information. In order to analyze the said entire 	environment in which the industry is situated, PESTLE analysis and Porter’s 	Five Forces model were used. 	  	 	 	III.           	 	Background of the 	Industry 	 	 	            The automobile industry of the world made over 60 million cars, 	vans, trucks and buses in 2005. These vehicles are vital to the working of 	the global economy, as well as to the wellbeing of the citizens of the 	world. The said industry contributes to the global turnover by €1.9 	trillion. Thus, it the motor car manufacturing as a country, then it would 	be the sixth largest economy in the world (see Appendix A) (OICA, 2006). 	This is because the global automobile industry enables to produce a total of 	73,152,696 cars in 2007, showing 5.7% increase  (2007 Production Statistics, 	2007) (See Appendix B). 	 	 	            Thus, building 77 million vehicles requires the employment of 	more than 8 million people in the world in direct manner in order to make 	the vehicles and parts that go into them. It corresponds to the 5% of the 	total manufacturing employment in the world. Aside from that, there are also 	50 million people who earn their living from cars, trucks, buses and coaches 	(See Appendix C) (OICA, 2006). 	 	 	            USA, Japan, China, Germany and South Korea are the top car 	manufacturing nations in the world. While, among the 5, USA is considered as 	the largest producer and consumer of motor cars that account for 6.6 	millions direct and spin-off jobs, which represents more or less 10% of the 	$10 trillion US economy. Furthermore, the primary motor cars manufacturing 	regions in the world are Northeastern United States and the Southern Great 	Lakes Regions, together with the Northwestern Europe, Western Russia, 	Ukraine and Japan. The European Union (EU) has the largest automotive 	production regions in the world including the UK, Rhine-Ruhr River Valley, 	Upper Rhine, Alsace, Lorraine region and the Po Valley in Italy (Automotive 	Industry - Industry Overview). In 2012, the global automobile industry is 	forecast to have a total volume of 118.5 million units, showing an increase 	of 37.5% since 2007 (Global Automobiles, 2008). 	 	 	            There 5 important players in the industry which are: Toyota, 	General Motors, Ford Motor, Volkswagen and Daimler Chrysler. These companies 	have their presence in almost all countries in the world, which enables them 	to invest on different facilities that will help to improve and maintain 	their position in the market (Automotive Industry - Industry Overview). The 	study of Datamonitor (2008) showed that in 2007, Toyota Motor Corporation 	lead the market with a total of 15% global sales, followed by Ford Motor 	Company with 125 value share (see Appendix D). 	 	 	IV.          	 	Macro-Environment 	Analysis 	 	 	            The macro-environment consists of the broader set of forces that 	have an impact on the company which include economic, demographic, 	technological, political, legal, social and cultural factors. These factors 	combined will create non-controllable elements which are important in order 	to focus on strategic movement (Wilson & Gilligan, 2005, 129). Fortunately, 	there are tools which can be used in order to analyze the macro-environment 	including the PESTLE analysis which help to identify forces in the 	macro-environment which affect the business. This tool focuses on examining 	Political, Economic, Socio-cultural, Technological, 	Legislative and Ecological aspects of the wider environment 	(Partridge & Sinclair-Hunt, 1997, 77). 	 	  	 	  	 	Table 	 SEQ Table \* ARABIC 1 PESTLE Analysis - Car Manufacturers Industry 	 		 			 			 			 			 			Political 			 			 			 			 			Economic 		 		 			 			 			 			·   			 			 			European Union Policy; 			 			 			·   			 			 			Free Trade Union (FTA); 			 			 			·   			 			 			North American Free Trade Agreement (NAFTA); 			 			 			·   			 			 			Unfair trade relationship with Korea and Japan; and 			 			 			·   			 			 			support from the government. 			 			 			 			·   			 			 			globalization; 			 			 			·   			 			 			outsourcing; 			 			 			·   			 			 			global financial crisis; and 			 			 			·   			 			 			increasing competition. 			 			 			  		 		 			 			 			 			 			Social 			 			 			 			 			Technological 		 		 			 			 			 			·   			 			 			brand image; 			 			 			·   			 			 			lower income distribution; and 			 			 			·   			 			 			growing knowledge of people towards health and environmental issues. 			 			 			 			·   			 			 			robotization; 			 			 			·   			 			 			increasing pressure on research funding; 			 			 			·   			 			 			communication and the Internet; 			 			 			·   			 			 			e-commerce; 			 			 			·   			 			 			access to technology; and 			 			 			·   			 			 			licensing, patents and intellectual property issues. 		 		 			 			 			 			 			Legislative/Legal 			 			 			 			 			Eco-Environmental 		 		 			 			 			 			·   			 			 			international and national: 			 			 			o   			 			 			employment law; 			 			 			o   			 			 			health and safety law; and 			 			 			o   			 			 			environmental law. 			 			 			 			·   			 			 			international and national environmental regulations; 			 			 			·   			 			 			implementation of ISO 14001; 			 			 			·   			 			 			corporate social responsibility; and 			 			 			·   			 			 			pollution. 		 	 	 	 	  	  	 	A.           	 	Political 	 	 	 	            Political factors focus on different actions by local and 	national administrations and political parties, together with the 	international bodies including European Unions and World Trade Organization 	(Harberg & Rieple, 2008). The EU implements its industrial policy towards 	the industry including the internal market, competition policy, research and 	development policy, external trade policy and environment policy. In 	support, EU is implementing EU Whole Vehicle Type-Approval (WVTA) system 	which focuses on harmonization of technical requirements on motor vehicles. 	In order to manage fair competition, EU promotes industrial cooperation in 	order to assist small suppliers of motor vehicle components under the 	Regulation (EC) No. 1475/95. Thus, help the research and development process 	of motor car manufacturers by Sixth Framework Programme (2002 – 2006), and 	the industry will be supported by Seventh Framework Programme (2007 – 2013) 	in critical events and challenges of the future. Above all, EU focused on 	the external policy by protecting the automobile market and improving the 	access to the third countries on the import system (Györffi, 2006). 	 	 	 	            It is also important to focus on NAFTA which focus on the 	relationship of Mexico, Canada and the US. The said agreement allows the US 	to export its motor cars to Mexico and Canada, thus increase the market for 	American motor cars  (Raver, 2006). Therefore, it has a great impact on the 	operation of Korean and Japanese manufacturers. 	 	 	            FTA is another factor to be considered because it enables motor 	car manufacturers to have a free trade and fair access to market. However, 	it is important to consider that even though, FTA is ruling in different 	countries, Europe and the US is having different problems regarding their 	motor car trade relationship with Korea which include anti-import bias, 	unfair regulations and certification; unfair tariff and tax structure; 	limited financial services and manipulation of currency. Although the 	country is somewhat open with the foreign motor car brands, the government 	and industry officials are launching regular public campaigns about using 	foreign cars that has a great impact on national pride, thus result to slow 	down or stop of sales of foreign cars. Aside from that, the country is 	maintaining an 8% tariff on automotive passenger car, consider as high 	compare with 2.7% of other countries. Above all, just like Japan, the 	government is gaining competitive advantage by unfair manner by controlling 	the currency markets to weaken the value of their currency against the 	dollar  (Collins, 2006). 	 	B.           	 	Economic 	 	 	            	 	Globalization has a great impact on the performance of players in the 	industry. Primarily, it can help companies to save time, money and effort. 	During the last decades, in order to meet the growing demands for advanced 	technology, GM has recruited a rich blend of international talents, with 	engineers and scientists from different countries, which help to create a 	bubbling cauldron of exciting ideas that GM is applying to the development 	of their product, technology and business innovations  (Hsu, 2002). Another 	impact of globalization is outsourcing which become a common in automotive 	industry (Lepeak, 2008). Currently, more and more companies are outsourcing 	in China and India because of low labor cost. As a matter of fact, an 	engineer costing $4,000/month in the US will only cost $500 in China 	(Zhang). 	 	 	            Increasing competition is also important factors because the 	market is offering almost the same products and just vary in some factors 	such as the design and motor. To add more pressure, global financial crisis 	is helping to increase competition in the market. As the global stock market 	decline, the confident of the consumer to buy things is also decreasing. In 	2008, all of the carmakers in the USA had showed decline in sales: GM (16%), 	Toyota (32%), Ford (34%), Honda (23%)  (KMPG, 2008). In connection, GM, the 	leading US car makers asked for bailout which was granted by the US Federal 	government, at the same time, the company announced to cut costs and capital 	spending while raining funds by the sale of their assets. Daewoo, a 	subsidiary of GM had announced to close its factories in Korea temporarily, 	which will be followed by cutting jobs in Argentina, Poland. Another 	subsidiary of GM, Opel, asked for more public support from the German 	Government. Ford is also planning to shut down its operation in Berdaux, 	France because of poor sales from October 2008 to mid-January 2009. French 	automaker, PSA also stopped its production in China, Spain and France, 	temporarily, while Renault plans to reduce jobs in Europe  (UNCTAD, 2009). 	 	 	C.           	 	Social 	 	 	            	Brand 	image plays an important role in the decision of the customers in choosing 	the auto car brands they will buy. It can be seen on the effort of different 	Japanese companies towards activities and tools to improve qualities, 	particularly Six Sigma. Furthermore, going back to the issue of global 	financial crisis, it has a great impact on the social and behavioral aspect 	of the customers. Because there are a huge number of people who loses their 	job and other financial sources, they tend to save or use it in more 	important things. 	 	 	            On the other hand, motor cars are also connected with the health 	aspect. As of now, there are different health organization that are 	motivating people to walk as a perfect form of exercise, thus making sure 	that people are physically active. This is further affected by the improving 	public transportation facilities in different countries, including those 	developing countries. 	 	 	            On the other hand, people are becoming aware of the negative 	impact of energy consumption in our environment, particularly regarding the 	popular issue of global warming. People are focusing on things that will 	help them to save the environment, thus the emergence of hybrid cars is 	becoming popular. Furthermore, seeking gas relief, Americans are turning to 	hybrid cars, which is combination of traditional internal combustion engines 	with electric ones. It also helps to lessen heavy traffic pressure and 	decrease bloated pollution levels (Singleton, 2004).  	 	D.           	 	Technological 	 	 	            	The 	automotive industry is focusing on research funding in order to give 	emphasis on innovation which enables them to maintain their competitive 	advantage. Aside from that, it is being affected by the maturity of the 	technologies that are being applied. This is important because technology is 	evolving in just one blink of an eye. The internet can help both the 	internal and external customers of the company, primarily in terms of 	communication. It helps employees of the company to communicate with each 	other, therefore enables them to centralize the any time and any place.  	 	 	 	            On the other hand, it is important to consider the issue of 	fraud and theft of intellectual property. According to the report of Frost & 	Sullivan shows that the process of sharing of supplier has complicated the 	protection of privacy including the design of the products, which is an 	important aspect of intellectual property law. As a result in 2005, experts 	estimated that there were about $11.53 billion earned via counterfeit 	vehicle parts and components, and it is forecasted to increase up to $44.74 	billion in 2011  (IHS, 2006). 	 	 	            Above all, the use of robotics in assembling and manufacturing 	motor cars is also important. In the Japanese automotive industry, the 	application of robots can be group into arc wielding, spot wielding, loading 	and unloading, assembling, material handling, foundry, press, painting and 	other activities (Yagi, 2002). 	 	E.           	 	Legislative/Legal 	 	 	            	There 	are different international and national laws which are being implemented 	regarding the aspect of employment, safety and health and environmental. 	Because the automotive industry is considered as matured, and involved in 	global manufacturing and marketing, it is important to consider the 	different factors which are connected on local laws. Thus, it is important 	to focus on the different local and national standards in handling human 	resource, safety procedures and waste management. 	 	            Above all, it is important to focus on the different 	organizations who are involved in the local settings such as employee union 	and other non-governmental organizations. 	 	F.            	 	Eco-Environmental 	 	As a 	result of the social factors affecting the mentality of people towards the 	environment, the industry is focusing on the different processes which will 	enable them to ensure safety of nature and safety of individual’s health. 	This is also one of the primary reasons why most of automotive companies are 	focusing on green production. As part of the global standard, ISO 14001 	pertains on the process of how the activities of organization can affect the 	environment throughout the life of its products (Johnson, Sun, & Johnson, 	2007). It also pertains on the social responsibilities of the company. 	 	 	 	V.           	 	Industry Analysis 	 	 	            Analysis at the industry level focuses on the overall 	attractiveness of operating in a selected industry and the relative position 	of a company versus its competitors in the industry. Porter’s Five Forces 	Model is considered as one of the most important and applied method for 	conducting industry analysis (Evans & Bishop, 2001). 	 	  Figure  SEQ Figure \* ARABIC 1 Porter's Five Forces Model - The Automotive Industry                                                 A.           Threats of New Entrants             Threats of new entrants are moderate because entry to the automotive industry is unlikely to be successful on a small scale because huge amount of capital is needed in order to set-up large-scale production plants. Aside from that, factors including difficulty in accessing distribution channels are a problem because dealers and distributors tend to stock well-established branded automobiles as an answer to the demand of the consumers. Aside from that, top players in the market, including the 5 stated in this paper hold licenses to use numerous patents, copyrights and trademarks which focus on engineering and technical expertise to maintain their competitive advantage through innovations. In addition, there are different governmental standards and regulations that are connected to safety, fuel economy, emissions control, noise control, vehicle recycling, substance of concern, engines and equipment manufactured for sale in the world. Above all, manufacturing and other assembly facilities are subject to different stringent standards which regulate air emissions, water discharges and waste management (Datamonitor, 2008). B.           Bargaining Power of Buyers             Buyers in the automotive industry are commonly large companies with a vital financial power. Therefore, they can be authorized dealer for a number of manufactures and they can make large purchases and put pressure on market players in order to reduce prices. However, the brand strength or the image of the brands weaken the buyer power, because the leading car manufacturer have already established their relationship with the customers, thus, buyers are more likely to enter into different contracts with specific manufacturers to meet the demand of the customers, at the same time, increase sales. Aside from that, there are number of market players that have integrated forward into retailing, which put pressures on buyers (Datamonitor, 2008). C.           Bargaining Power of Suppliers             Inputs to the global automobiles market include a variety of raw materials, assembled and semi-assembled components, energy, freight and transportation. On the other hand, suppliers have a strong power over the industry because the suppliers, which are commonly large companies, are not dependent on the automotive industry but operate in a diverse market. In addition, the power of supplier is being strengthened because the automotive industry requires raw materials of high quality. However, this is complemented because motor car manufacturers does not focus on one suppliers, thus reliance to suppliers keep to minimum by using wide range of companies as their suppliers  (Datamonitor, 2008). D.           Threats of Substitutes             The presence of used car market is a threatening player in the new cars market. As a matter of fact, the volume of used car sold had exceeded that of the new cars market. However, this lessens because most of car manufacturers are focusing on producing affordable new cars. On the other hand, with connection with the awareness of environmental issues, people tend to substitute automobiles for more environmentally friendly forms of transport such as walking, cycling and even public transportation. However, the said substitute is unlikely to happen on a large scale or to become a complete substitute for automobile, thus it does not have that much impact on the industry (Datamonitor, 2008).             Furthermore, hybrid is growing in terms of sales, however market players play a vital role in the said green market (Datamonitor, 2008), therefore, making the threat of substitute low. E.           Rivalry among Existing Firms             It is important to consider that the global automobiles industry is highly concentrated with the top three players in the industry, which holds 40% of the entire market value. Competition is increasing and intensifying because different developed and newly developed countries such as Japan and Korea are starting to compete in the global market. Aside from that, most of car manufacturers are now ramping in terms of production which put pressures on their rivals. Besides, the industry is becoming consolidated because increase in raw material cost resulted to increase in production costs and put pressure on the players in the market (Datamonitor, 2008). Therefore the rivalry in the industry is strong.   VI.          Conclusion After analyzing the information gathered, it had been found out that the industry is facing problems because of the current financial crisis. Customers tend to save money and stop buying cars for the future. As a result, the sale of automobile is forecasted to decline. On the other hand, because of the said financial crisis, people tend to go for second-hand cars, cycling, walking and transportation. However, the said factors do not have a long-lasting and strong impact because of the current effort of major players in the industry including introduction of affordable and reliable cars in the market. Furthermore, most of companies are also focusing on green market, which enables them to manufacture and sell hybrid cars, as an answer to the concerns of the customer towards the different environment issues.   VII.         References 2007 Production Statistics. (2007). Retrieved May 4, 2009, from Organization International des Constructeurs d’Automobiles: http://www.oica.net/category/production-statistics/ Automotive Industry - Industry Overview. (n.d.). Retrieved May 4, 2009, from Automotive Components & Parts: http://www.automotive-online.com/auto-industry.html Collins, S. (2006, April 20). International Trade Commission (ITC) Public Hearing on the Economic Effects of a US - Korea FTA on the US Automotive Industry. Retrieved May 4, 2009, from Automotive Trade Policy Council: http://www.keia.org/images/04.AutomotiveTradePolicyCouncilRemarks.pdf Datamonitor. (2008). Global Automobiles. Retrieved May 4, 2009, from Datamonitor: http://www.datamonitor.com/ Evans, F., & Bishop, D. (2001). Valuation for M & A: Building Value in Private Companies. John Wiley and Sons. Györffi, M. (2006). Common Policies. Retrieved May 4, 2009, from European Parliament: http://www.europarl.europa.eu/parliament/expert/displayFtu.do?id=74&ftuId=FTU_4.8.4.html&language=en Haberberg, A., & Rieple, A. (2008). Strategic Management: Theory and Application. Oxford University Press. Hsu, J. (2002, July 1). Globalization Withint the Auto Industry: A Major Benefit of Globalization for GM has been Access... Retrieved May 5, 2009, from AllBusiness: http://www.allbusiness.com/management/benchmarking-key-business-process-benchmarking/219142-1.html IHS. (2006, October 31). Frost: Intellectual Property Rights Protection to Reduce Counterfeiting Risk in Chinese Auto Industry. Retrieved May 9, 2009, from IHS: http://auto.ihs.com/news/2006/frost-counterfeit-china-auto.htm Johnson, D., Sun, J., & Johnson, M. (2007). Integrating Multiple Manufacturing Initiatives: Challenges for Automotive Suppliers. Measuring Business Excellence , 11(3), 41 - 56. KMPG. (2008, November 27). Automotive: A Rough Road: The Effects of Today's Financial Crisis in the Global Automotive Industry. Retrieved May 4, 2009, from KMPG International: http://www.kpmg.com/SiteCollectionDocuments/A-rough-road-financial-crisis.pdf Lepeak, S. (2008, January 1). "What's happening in outsourcing trends? Manufacturing, automotive, and high-tech industries are looking mostly at information technology and business process outsourcing.". Retrieved May 4, 2009, from Implement & Tractor. Scissortail Productions LLC. HighBeam: http://www.highbeam.com/doc/1G1-175526082.html OICA. (2006, November 29). The World's Automotive Industry. Retrieved May 5, 2009, from The International Organization of Motor Vehicles Manufacturers: http://www.oica.net/wp-content/uploads/2007/06/oica-depliant-final.pdf Partridge, L., & Sinclair-Hunt, M. (1997). Strategic Management. Select Knowledge Limited. Raver, E. (2006, February 16). The Effect of NAFTA on the US Auto Industry. Retrieved May 2, 2009, from Associated Content: http://www.associatedcontent.com/ Singleton, K. (2004, March 14). Hybrid Cars Are Gaining Popularity. Retrieved May 5, 2009, from World Internet News: http://soc.hfac.uh.edu/artman/publish/article_105.shtml UNCTAD. (2009, January 19). Assessing the Impact of the Current Financial and Economic Crisis on Global FDI Flows. Retrieved May 5, 2009, from United Nations Conference on Trade and Development: http://www.unctad.org/templates/Download.asp?docid=10973〈=1&intItemID=2068 Wilson, R., & Gilligan, C. (2005). Strategic Marketing Management: Planning, Implementation and Control. Butterworth-Heinemann. Yagi, T. (2002). Recent Trends in the Robotization of the Japanese Automotive Industry. Industrial Robot: An International Journal , 29(6), 485 - 499. Zhang, J. (n.d.). Outsourcing to China Part 1. Retrieved May 4, 2009, from SourcingMag.com: http://www.sourcingmag.com/content/c050802a.asp     VIII.       Appendices Appendix A: Automotive Industry and the Economy of the World   	 		 		 		 		(2004 or latest available figures) 	 	 		 		 		 		 		(In Million) 		 		 		 		 		Turnover 		 		 		 		 		Investments 		 		 		 		 		Public Revenue 	 	 		 		 		 		Argentina 		 		 		 		3,519* 		 		 		  		 		 		  	 	 		 		 		 		Australia 		 		 		 		18,929 		 		 		  		 		 		 		887 	 	 		 		 		 		Austria 		 		 		 		13,900 		 		 		 		580 		 		 		 		8,315 	 	 		 		 		 		Belgium 		 		 		 		18,225 		 		 		 		302 		 		 		 		7,155 	 	 		 		 		 		Brazil 		 		 		 		26,997 		 		 		 		1,141 		 		 		  	 	 		 		 		 		Canada 		 		 		 		77,469* 		 		 		 		2,496** 		 		 		 		9,701 	 	 		 		 		 		China 		 		 		 		86,984 		 		 		 		5,330 		 		 		  	 	 		 		 		 		Croatia 		 		 		 		205 		 		 		 		20 		 		 		1 	 	 		 		 		 		Czech Rep. 		 		 		 		12,091 		 		 		 		663 		 		 		 		1,032 	 	 		 		 		 		Denmark 		 		 		 		1,165 		 		 		 		46 		 		 		 		5,867 	 	 		 		 		 		Egypt 		 		 		 		2,901 		 		 		 		1,661 		 		 		 		1,911 	 	 		 		 		 		Finland 		 		 		 		1,076 		 		 		 		36 		 		 		 		3,807 	 	 		 		 		 		France 		 		 		 		111,901 		 		 		 		4,196 		 		 		 		34,000 	 	 		 		 		 		Germany 		 		 		 		227,666 		 		 		 		11,900 		 		 		 		44,314 	 	 		 		 		 		Greece 		 		 		 		162 		 		 		 		17 		 		 		 		3,200 	 	 		 		 		 		Hungary 		 		 		 		8,144 		 		 		 		432 		 		 		  	 	 		 		 		 		India 		 		 		 		16,893 		 		 		 		1,014 		 		 		 		11,122 	 	 		 		 		 		Indonesia 		 		 		 		3,858 		 		 		 		1,071 		 		 		  	 	 		 		 		 		Italy 		 		 		 		54,135 		 		 		 		3,450 		 		 		 		40,954 	 	 		 		 		 		Japan 		 		 		 		435,610 		 		 		 		6,450 		 		 		 		66,444 	 	 		 		 		 		Korea 		 		 		 		62,993 		 		 		 		2,239 		 		 		 		16,615 	 	 		 		 		 		Malaysia 		 		 		 		6,084 		 		 		 		1,263 		 		 		  	 	 		 		 		 		Mexico 		 		 		 		3,348 		 		 		  		 		 		  	 	 		 		 		 		Netherlands 		 		 		 		7,876 		 		 		 		81 		 		 		 		10,837 	 	 		 		 		 		Poland 		 		 		 		16,202 		 		 		 		893 		 		 		  	 	 		 		 		 		Portugal 		 		 		 		4,457 		 		 		 		176 		 		 		 		6,897 	 	 		 		 		 		Romania 		 		 		 		1,836 		 		 		 		308 		 		 		  	 	 		 		 		 		Russia 		 		 		 		7,019 		 		 		 		223 		 		 		 		654 	 	 		 		 		 		Slovakia 		 		 		 		8,711 		 		 		 		1,056 		 		 		  	 	 		 		 		 		Slovenia 		 		 		 		1,544 		 		 		 		40 		 		 		  	 	 		 		 		 		South Africa 		 		 		 		20,602 		 		 		 		277 		 		 		 		3,459 	 	 		 		 		 		Spain 		 		 		 		75,104 		 		 		 		277 		 		 		 		3,459 	 	 		 		 		 		Sweden 		 		 		 		24,784 		 		 		 		861 		 		 		 		5,590 	 	 		 		 		 		Switzerland 		 		 		 		4,252 		 		 		  		 		 		 		4,689 	 	 		 		 		 		Thailand 		 		 		 		116,58* 		 		 		 		443 		 		 		 		2,871 	 	 		 		 		 		Turkey 		 		 		 		28,196 		 		 		 		502 		 		 		 		10,127 	 	 		 		 		 		UK 		 		 		 		58,238 		 		 		 		1,590 		 		 		 		46,099 	 	 		 		 		 		USA 		 		 		 		425,106 		 		 		 		30,416 		 		 		 		64,289 	 	 		 		 		 		Total 		 		 		 		 		1,889,840 		 		 		 		 		84,801 		 		 		 		 		433,160 	 	 		 		 		 		* 		gross productive value ** gross fixed capital formation 	   Source:  (OICA, 2006) Appendix B: 2007 Car Production Statistics   	 		 		 		 		 		Country 		 		 		 		 		Cars 		 		 		 		 		Commercial Vehicles 		 		 		 		 		Total 		 		 		 		 		% Change 	 	 		 		 		 		 		Argentina 		 		 		 		350,735 		 		 		 		193,912 		 		 		 		544,647 		 		 		 		26.0% 	 	 		 		 		 		 		Australia 		 		 		 		283,348 		 		 		 		51,269 		 		 		 		334,617 		 		 		 		0.9% 	 	 		 		 		 		 		Austria 		 		 		 		199,969 		 		 		 		28,097 		 		 		 		228,066 		 		 		 		-17% 	 	 		 		 		 		 		Belgium 		 		 		 		789,674 		 		 		 		44,729 		 		 		 		834,403 		 		 		 		-9.1% 	 	 		 		 		 		 		Belgium 		 		 		 		789,674 		 		 		 		44,729 		 		 		 		834,403 		 		 		 		-9.1% 	 	 		 		 		 		 		Brazil 		 		 		 		2,388,402 		 		 		 		582,416 		 		 		 		2,970,818 		 		 		 		13.8% 	 	 		 		 		 		 		Canada 		 		 		 		1,342,133 		 		 		 		1,236,105 		 		 		 		2,578,238 		 		 		 		0.3% 	 	 		 		 		 		 		China 		 		 		 		6,381,116 		 		 		 		2,501,340 		 		 		 		8,882,456 		 		 		 		22.0% 	 	 		 		 		 		 		Czech Rep. 		 		 		 		925,778 		 		 		 		12,749 		 		 		 		938,527 		 		 		 		9.8% 	 	 		 		 		 		 		Egypt 		 		 		 		67,149 		 		 		 		36,403 		 		 		 		103,552 		 		 		 		13.1% 	 	 		 		 		 		 		Finland 		 		 		 		24,000 		 		 		 		303 		 		 		 		24,303 		 		 		 		-25.8% 	 	 		 		 		 		 		France 		 		 		 		2,550,869 		 		 		 		464,985 		 		 		 		3,015,854 		 		 		 		-4.8% 	 	 		 		 		 		 		Germany 		 		 		 		5,709,139 		 		 		 		504,321 		 		 		 		6,213,460 		 		 		 		6.8% 	 	 		 		 		 		 		Hungary 		 		 		 		287,982 		 		 		 		4,045 		 		 		 		292,027 		 		 		 		53.5% 	 	 		 		 		 		 		India 		 		 		 		1,707,839 		 		 		 		598,929 		 		 		 		2,306,768 		 		 		 		14.4% 	 	 		 		 		 		 		Indonesia 		 		 		 		309,208 		 		 		 		103,580 		 		 		 		412,788 		 		 		 		39% 	 	 		 		 		 		 		Iran 		 		 		 		882,000 		 		 		 		115,240 		 		 		 		997,240 		 		 		 		10.3% 	 	 		 		 		 		 		Italy 		 		 		 		910,860 		 		 		 		373,452 		 		 		 		1,284,312 		 		 		 		6.0% 	 	 		 		 		 		 		Japan 		 		 		 		9,944,637 		 		 		 		1,651,690 		 		 		 		11,596,327 		 		 		 		1.0% 	 	 		 		 		 		 		Malaysia 		 		 		 		347,971 		 		 		 		93,690 		 		 		 		441,661 		 		 		 		-12.2% 	 	 		 		 		 		 		Mexico 		 		 		 		1,209,097 		 		 		 		886,148 		 		 		 		2,095,245 		 		 		 		2.4% 	 	 		 		 		 		 		Netherlands 		 		 		 		61,912 		 		 		 		76,656 		 		 		 		138,568 		 		 		 		-13.1% 	 	 		 		 		 		 		Poland 		 		 		 		695,000 		 		 		 		89,700 		 		 		 		784,700 		 		 		 		9.8% 	 	 		 		 		 		 		Portugal 		 		 		 		134,047 		 		 		 		42,195 		 		 		 		176,242 		 		 		 		-22.5% 	 	 		 		 		 		 		Romania 		 		 		 		234,103 		 		 		 		7,609 		 		 		 		241,712 		 		 		 		13.2% 	 	 		 		 		 		 		Russia 		 		 		 		1,288,652 		 		 		 		371,468 		 		 		 		1,660,120 		 		 		 		10.4% 	 	 		 		 		 		 		Serbia 		 		 		 		8,236 		 		 		 		1,667 		 		 		 		9,903 		 		 		 		-11.4% 	 	 		 		 		 		 		Slovakia 		 		 		 		571,071 		 		 		0 		 		 		 		571,071 		 		 		 		93.3% 	 	 		 		 		 		 		Slovenia 		 		 		 		174,209 		 		 		 		24,193 		 		 		 		198,402 		 		 		 		29.6% 	 	 		 		 		 		 		South Africa 		 		 		 		276,018 		 		 		 		258,472 		 		 		 		534,490 		 		 		 		-9.1% 	 	 		 		 		 		 		South Korea 		 		 		 		3,723,482 		 		 		 		362,826 		 		 		 		4,086,308 		 		 		 		6.4% 	 	 		 		 		 		 		Spain 		 		 		 		2,195,780 		 		 		 		693,923 		 		 		 		2,889,703 		 		 		 		4.0% 	 	 		 		 		 		 		Sweden 		 		 		 		316,850 		 		 		 		49,170 		 		 		 		366,020 		 		 		 		9.9% 	 	 		 		 		 		 		Taiwan 		 		 		 		212,685 		 		 		 		70,354 		 		 		 		283,039 		 		 		 		-6.7% 	 	 		 		 		 		 		Thailand 		 		 		 		315,444 		 		 		 		971,902 		 		 		 		1,287,346 		 		 		 		7.8% 	 	 		 		 		 		 		Turkey 		 		 		 		634,883 		 		 		 		464,531 		 		 		 		1,099,414 		 		 		 		11.3% 	 	 		 		 		 		 		Ukraine 		 		 		 		380,061 		 		 		 		22,530 		 		 		 		402,591 		 		 		 		39.7% 	 	 		 		 		 		 		UK 		 		 		 		1,534,567 		 		 		 		215,686 		 		 		 		1,750,253 		 		 		 		6.1% 	 	 		 		 		 		 		USA 		 		 		 		3,924,268 		 		 		 		6,856,461 		 		 		 		10,780,729 		 		 		 		-4.5% 	 	 		 		 		 		 		Uzbekistan 		 		 		 		170,000 		 		 		 		14,900 		 		 		 		184,900 		 		 		 		68.1% 	 	 		 		 		 		 		Others 		 		 		 		429,430 		 		 		 		168,466 		 		 		 		597,896 		 		 		 		12.5% 	 	 		 		 		 		 		Total 		 		 		 		 		53,049,391 		 		 		 		 		20,103,305 		 		 		 		 		73,152,696 		 		 		 		 		5.7% 	   Source:  (2007 Production Statistics, 2007)                 Appendix C: Direct Employment in Automotive Industry             	 		 		 		 		Countries 		 		 		 		 		Employment 		 		 		 		Countries 		 		 		 		 		Employment 	 	 		 		 		 		Argentina 		 		 		 		12,166 		 		 		 		Korea 		 		 		 		246,900 	 	 		 		 		 		Australia 		 		 		 		43,000 		 		 		 		Malaysia 		 		 		 		47,000 	 	 		 		 		 		Austria 		 		 		 		32,000 		 		 		 		Mexico 		 		 		 		137,000 	 	 		 		 		 		Belgium 		 		 		 		45,600 		 		 		 		Netherlands 		 		 		 		24,500 	 	 		 		 		 		Brazil 		 		 		 		289,082 		 		 		 		Poland 		 		 		 		94,000 	 	 		 		 		 		Canada 		 		 		 		159,000 		 		 		 		Portugal 		 		 		 		22,800 	 	 		 		 		 		China 		 		 		 		1,605,000 		 		 		 		Romania 		 		 		 		59,000 	 	 		 		 		 		Croatia 		 		 		 		4,861 		 		 		 		Russia 		 		 		 		755,000 	 	 		 		 		 		Czech Rep. 		 		 		 		101,500 		 		 		 		Serbia 		 		 		 		14,454 	 	 		 		 		 		Denmark 		 		 		 		6,300 		 		 		 		Slovakia 		 		 		 		57,376 	 	 		 		 		 		Egypt 		 		 		 		73,200 		 		 		 		Slovenia 		 		 		 		7,900 	 	 		 		 		 		Finland 		 		 		 		6,530 		 		 		 		South Africa 		 		 		 		112,300 	 	 		 		 		 		France 		 		 		 		304,000 		 		 		 		Spain 		 		 		 		330,000 	 	 		 		 		 		Germany 		 		 		 		773,217 		 		 		 		Sweden 		 		 		 		140,000 	 	 		 		 		 		Greece 		 		 		 		2,219 		 		 		 		Switzerland 		 		 		 		15,500 	 	 		 		 		 		Hungary 		 		 		 		40,800 		 		 		 		Thailand 		 		 		 		182,300 	 	 		 		 		 		India 		 		 		 		270,000 		 		 		 		Turkey 		 		 		 		230,736 	 	 		 		 		 		Indonesia 		 		 		 		64,000 		 		 		 		UK 		 		 		 		213,000 	 	 		 		 		 		Italy 		 		 		 		196,000 		 		 		 		USA 		 		 		 		954,210 	 	 		 		 		 		Japan 		 		 		 		725,000 		 		 		  		 		 		  	 	 		 		 		 		Grand Total (39 countries only) 		 		 		 		 		8,397,451 	   Appendix D: Market Share   	 		 		 		 		Company 		 		 		 		 		Share (%) 	 	 		 		 		 		Toyota Motor Corporation 		 		 		 		15% 	 	 		 		 		 		Ford Motor Company 		 		 		 		12% 	 	 		 		 		 		General Motors Corporation 		 		 		 		11.40% 	 	 		 		 		 		Daimler AG 		 		 		 		10.30% 	 	 		 		 		 		Other 		 		 		 		51.30% 	 	 		 		 		 		Total 		 		 		 		100% 	  Source: (Global Automobiles, 2008)

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