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

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

General Motors Company




World’s 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
Dominance


3 rd on Fortune 500 List
3 rd on Global 500 List
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
Leaders in the Convertible Lines

Sebring

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

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


Europe

Passport
Honda Weaknesses

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

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 world’s 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 1980’s and 90’s

Foreign Trade increased intensity of rivalry

Export becomes essential to expanding and competing

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