Group A2
Automobile manufacturing industry
Competitors overview
Crystal Friend
Ernita Harjati
Valerie Staffey
Lead Competitors
•DaimlerChrysler AG
•Ford Motor Corporation
•Honda Motors
•Toyota
Daimler Chrysler AG
Reference: Yahoo Finance and www.daimlerchrysler.com
Daimler Chrysler AG
Company History:
•Company founders- Gottlieb Daimler and Karl Benz
•Mercedes automobiles were fitted with Daimler engines and
open the door to the world’s first car race in 1894
•Original cars had low center of gravity, pressed-steel frame,
light, high-performance engine and honeycomb radiator
•In 1988, Daimler-Benz AG and Chrysler Corporation –
merged to form Daimler Chrysler AG
Reference: Yahoo Finance and www.daimlerchrysler.com
Daimler Chrysler AG
Company Today:
•Develops, manufactures and distributes passenger cars, light
trucks and commercial vehicles
•Operates in four segments: Mercedes Car Group, Chrysler
Group, Commercial vehicles and Services
•Total Revenue EUR 142.1 billion (USD 192.3 billion) in 2004
•Total employees: 384,723
•Headquarters: EUR-Stuttgart,Germany
USA- Auburn Hills, MI
Reference: Yahoo Finance and www.daimlerchrysler.com
Daimler Chrysler AG
Product Lines
•Maybach
•Dodge
•Mercedes-Benz
•Smart
•Chrysler
•Commercial brands
including•Freightliner
•Western Star
•Jeep
Reference: Yahoo Finance and www.daimlerchrysler.com
Daimler Chrysler AG
Financial Overview
•As of 10/28/05:
Stock (NYSE:DCX): $49.52
Market Capacity: $50,155 Millions
Sales: $176,471 Millions
•Debt/Equity (2004): N/A; S&P: 1.3
•Financial Leverage (2004): 5.4; S&P: 5.3
Reference: www.morningstar.com
Daimler Chrysler AG
Financial Overview
Reference: Yahoo Finance and www.daimlerchrysler.com
Daimler Chrysler
S.W.O.T Analysis
•StrengthsClear, four-pillar strategy: global presence, superior products,
leading brands, and innovation/technology leadership
•WeaknessesIncreased market penetration and lower demand. Speed and
efficiency of R&D efforts
•OpportunitiesSigns of economic recovery in Japan, continued energy research
•ThreatsFuel resources and regulation, weaker economic growth and
demand for automobiles worldwide, rising crude oil prices, higher
interest rates
Reference: Yahoo Finance and www.daimlerchrysler.com
Daimler Chrysler AG
Innovation
•Energy for the Future
•DaimlerChrysler Commercial Buses North America
has received a contract for 500 Orion VII hybridelectric buses from New York City transport services
•Fuel efficiency and resource research
•Accident-Free Driving
•Distronic system is equipped with a 77-GHz radar
sensor that measures the distance to the vehicle in
front, up to a separation of 150 meters
•Automotive Visions & Further Innovations
Reference: Yahoo Finance and www.daimlerchrysler.com
Daimler Chrysler AG
Headlines
•Significant increase in Daimler Chrysler’s Third Quarter
Operating Profit to EUR 1.8 billion (+38%)
•Daimler Chrysler Receives Largest Hybrid Electric Bus
Order to Date
•Mercedes Car Group Sold 117,900 cars in
September 2005
•Chrysler Group Achieves 18th Consecutive Month of Sales
Gains on 4 Percent Rise in Sales
Reference: www.aaaa.org and www.daimlerchrysler.com
Ford Motor Company
Ford Motor Company
Company History
•Founded on June 16, 1903
•In 1896, Henry Ford invented the Quadricycle. It was
the first "horseless carriage" that he actually built
•Perhaps Ford Motor Company's single greatest
contribution to automotive manufacturing was the
moving assembly line. First implemented at the Highland
Park plant (in Michigan, US) in 1913
•Went public and on Feb. 24, 1956, had about 350,000
new stockholders
Reference: www.ford.com
Ford Motor Company
Company Today
Third largest auto manufacturer, behind GM and Toyota
•Designs, manufacturers, and finances passenger cars
and light trucks
•Total Revenue $170 billion
•86% of total revenue from automobile sales
•Financial-services arm contributes the remaining
14% revenue
•Headquarters: Dearborn, MI
•Employees: 327,531
Reference: www.ford.com
Ford Motor Company
Product Lines
•Ford
•Volvo
•Lincoln
•Jaguar
•Mercury
•Land Rover
•Mazda
•Aston Martin
Reference: www.ford.com
Ford Motor Company
S.W.O.T analysis
•Strengths:
Ford F-150 top selling vehicle in U.S. Ford's primary strength is the
production of light duty trucks and SUVs. As an example, the "FSeries" of truck will had a unit volume of over 750,000 for 2004
Weaknesses:
The global over capacity of the entire industry
•Opportunities:
Increase in overseas productions, sales. The product line is
expanding, the corporate culture is firmly and centered on the
core business. The distribution channel is one of the best in the
business with Ford dealerships in over 70 countries
•Threats:
Domestic and Foreign competition
Reference: www.ford.com
Ford Motor Company
Financial Overview
•As of 10/28/05:
•Stock (NYSE:F): $8.02
•Market Capacity: $14,861 Millions
•Sales: $173,740 Millions
•Debt/Equity (2004): 10.8; S&P: 1.3
•Financial Leverage (2004): 18.2; S&P: 5.3
Reference: www.morningstar.com
Ford Motor Company
Financial Overview
Reference: www.ford.com
Ford Motor Company
Financial Overview
Reference: www.ford.com
Ford Motor Company
Headlines
•The "Recycling Leadership Award" was given to Ford Motor
Company from the National Recycling Coalition
•Diversity Inc.’s Top 50 Company for Diversity
•Working Mother’s Top 100 Place to Work
• Volvo Unveils Two Hot New Concepts At The 2005 SEMA Show
•Ford Delivers Fleet of Hydrogen Focus Fuel Cell Vehicles to
Southeast Michigan
•Latina Style’s Top 50 Company for Hispanic Women to Work
Reference: www.ford.com
Honda Motor Corporation
Honda Motor Corporation
Company History:
•Company founder- Soichiro Honda
•Honda Motor Corp. Ltd., was founded in 1948
•In 1959, the American Honda Motor Company is established
"We have now established ourselves on solid ground domestically," said
Senior Managing Director Takeo Fujisawa. "Eventually, we'll have to aim to
be number one worldwide. So, with that in mind, why don't you go check
out the overseas market?"
•In 1963, Honda's first sports car (S500) and light truck
(T360) released
Reference: Yahoo Finance and www.world.honda.com
Honda Motor Corporation
Company Today:
•Develops, produces and manufactures motor products
ranging from small general-purpose engines to specialty
sports cars
•Global Operations
Honda Japan, Honda South America, Honda Asia/Oceania, Honda
North/Central America, Honda Europe/Middle East/Africa, Honda China.
•Total Revenue JPY133.7 billion (USD 1,181 million) at end
of Q2 2005
•Total employees: 137,827
•Headquarters: Tokyo, Japan
Reference: Yahoo Finance and www.world.honda.com
Honda Motor Corporation
Product Lines
•Honda
•Honda Power Equipment
•Acura
•Honda Marine
•Honda Motorcycles
•Honda Engines
Reference: Yahoo Finance and www.world.honda.com
Honda Motor Corporation
Financial Overview
•As of 10/28/05:
Stock (NYSE:HMC): $27.33
Market Capacity: $52,549 Millions
Sales: $80,544 Millions
•Debt/Equity (2004):0.5 ; S&P: 1.3
•Financial Leverage (2004): 2.8; S&P: 5.3
Reference: www.morningstar.com
Honda Motor Corporation
Financial Overview
Reference: Yahoo Finance and www.world.honda.com
Honda Motor Corporation
•Strengths-
S.W.O.T. Analysis
World’s leader in motorcycle sales, continuous advancement of the
Civic, increased unit sales in Europe and continental Asia, breadth
and depth of product lines
•Weaknesses-
Increased market penetration and lower demand. Speed and
efficiency of R&D efforts
•Opportunities-
Signs of economic recovery in Japan, healthy motor sport market in
US, market introduction of “all-new” and “next generation” models
•Threats-
Fuel resources and regulation, weaker economic growth and
demand for automobiles worldwide, rising crude oil prices, higher
interest rates, currency conversion rates
Reference: Yahoo Finance and www.world.honda.com
Honda Motor Corporation
Headlines
•Honda Sets All-Time Records for Overseas and Worldwide
Production for the First Half of Fiscal Year
•High strength in hallmark for new Accords.
Nearly 50% of each uni-body for Honda Motor Co’s Accord sedan and coupe
models is made of high strength steel
•Honda, VW spots put safety first: new ads to break mid-October
leave behind sterile crash tests
•Honda Strengthens R&D Capability in Asia Oceania Region By
Establishing Automobile R&D Center in Thailand
Reference: www.aaaa.org and www.world.honda.com
Toyota
Toyota
Company History
•First established in 1937 as a spin-off from Toyoda
Automatic Loom Works, one of the world's leading
manufacturers of weaving machinery
•In 1950 the company experienced its one and only strike.
Labor and management emerged from this stoppage firmly
committed to the principles of mutual trust and
dependence, and that corporate philosophy still guides their
growth today
•Toyota launched its first small car (SA Model) in 1947.
Production of vehicles outside Japan began in 1959 at a
small plant in Brazil, and continued with a growing network
of overseas plants
Reference: www.toyota.com
Toyota
Company Today
•Toyota is the world's third largest manufacturer of automobiles
in unit sales and in net sales. It is by far the largest Japanese
automotive manufacturer, producing more than 5.5 million
vehicles per year, equivalent to one every six seconds
•Toyota Motor Corporation is one of the world‘s leading
automakers, offering a full range of models, from minivehicles
to large trucks
•Toyota employs 264,000 people worldwide (on a consolidated
basis), and markets vehicles in more than 140 countries
•Head office in Toyota City, Aichi
Reference: www.toyota.com
Toyota
Product Lines
•Toyota
•Hino
•Lexus
•Daihatsu
•Toyota F1 and
Motorsports
•Diversified operations include
telecommunications, prefabricated
housing and leisure boats
Reference: www.toyota.com
Toyota
S.W.O.T analysis
•Strengths:
Small cars in times of high gas prices, low cost production,
High quality, repeat buyers, Lexus most popular luxury
brand, Toyota Camry No. 1 selling car in U.S.
•Weaknesses:
World market is in over supply of cars. Car market may
slow down production. The company needs to keep
producing cars in order to retain its operational efficiency
Reference: www.toyota.com
Toyota
S.W.O.T analysis
•Opportunities:
Lexus and Toyota now have a reputation for manufacturing
environmentally friendly vehicles. Lexus has RX 400h hybrid,
and Toyota has it Prius
•Threats:
Product recalls are always a problem for vehicle
manufacturers. In 2005 the company had to recall 880,00
sports utility vehicles and pick up trucks due to faulty front
suspension systems. The company is also exposed to any
movement in the price of raw materials such as rubber, steel
and fuel. Tremendous competitive rivalry in the car market
(new entrants from China, South Korea, and new plants in
Eastern Europe)
Reference: www.toyota.com
Toyota
Financial Overview
•As of 10/28/05:
Stock (NYSE:TM): $91.25
Market Capacity: $149,106 Millions
Sales: $172,740 Millions
•Debt/Equity (2004): 0.5; S&P: 1.4
•Financial Leverage (2004): 2.7; S&P: 5.3
Reference: www.morningstar.com
Toyota
Financial Overview
Reference: www.Toyota.co.jp annual report
Toyota
Headlines
•Toyota Motor Manufacturing, Kentucky, Inc. (TMMK) will
produce the hybrid version of the Camry - the first Toyota
hybrid vehicle to be made in North America - beginning in the
second half of 2006, with an expected monthly production
target of 4,000 units
•Toyota's Fourth Environmental Action Plan, announced in
May, calls for the company to become "a leader and driving
force in global regeneration by implementing the most
advanced environmental technologies"
Reference: www.toyota.com
GM vs. Competition
Chart Comparison:
Market Capacity
Ford, 15,083.83
GM, 15,376.04
Chrysler,
49,425.82
Toyota,
147,504.74
Honda, 52,491.21
Reference: www.morningstar.com
Chart Comparison:
Return On Assets
0.1
0.08
Chrysler
%
0.06
GM
0.04
Honda
0.02
0
-0.021998
Toyota
1999
2000
2001
2002
2003
2004
Ford
-0.04
Year
ROA (%) for 6 years comparing GM and its competitors.
Honda shows to be the highest followed by Toyota and Chrysler.
Reference: www.morningstar.com
Chart Comparison:
Return On Equity
1
%
0.8
0.6
Chrysler
0.4
GM
0.2
Honda
0
-0.21998
Toyota
1999
2000
2001
2002
2003
2004
Ford
-0.4
-0.6
Year
ROE (%) for 6 years comparing GM and its competitors.
Ford shows to be the first followed by Honda and Toyota.
Reference: www.morningstar.com
Chart Comparison:
Operating Margin (% )
14.00%
12.00%
Chrysler
%
10.00%
GM
8.00%
Honda
6.00%
Toyota
4.00%
Ford
2.00%
0.00%
1998
1999
2000
2001
2002
2003
2004
Year
Operating Margin (%) for 6 years comparing GM and its competitors.
Toyota shows to be the first followed by Honda and GM.
Reference: www.morningstar.com
Stock Comparison:
Reference: www.morningstar.com
Overall Industry Trends
•Increased R & D Spending
•Lower sales in high fuel intake, SUV vehicles
•Continued innovations in build and manufacturing
•Continued research for more efficient fuel sources
•Large company merger
•Economic boom in Asia- markets in China and India
expected to exceed overall geographic sales
References: The Economist
GM vs. Competitors- Overall Conclusions
•GM is not as innovative as other competitors.
GM was not the leader of hybrid vehicle which is in high demand
right now
Many new vehicle offered by GM do not appeal to young buyers
•GM offers many rebates / sales incentives to boost their unit
sales
•GM and Ford have decreasing total return % trend performance
compared to Toyota, Honda, and Chrysler who have increasing
return even though GM is the leader at its sales.
•GM is one of industry’s worst returns on assets
Suggestions for GM:
•Redesign their product line to keep leadership in the worldwide
automobile business by interacting directly with the real world
instead of focusing on just automobile shows or high-tech design
(explore other electronic shows, car dealerships, etc).
•Plan to introduce an alternate fuel vehicle or hybrid to compete
with other manufacturers and attract environmentally-conscience
consumers, especially since GM’s majority of sales are in trucks and
SUV’s, which tend to use more gasoline.
•Continue to work on drastically reducing health care and pension
costs, starting with decreasing their number of employees.
•Bring back employee discount program to Hummer, Cadillac, and
Saab to boost profits made from GM’s financing division. In the
meantime, continue to strongly market these products.
References
Company financial information. Retrieved October 27, 2005, from
http://www.morningstar.com
Daimler Chrysler operating profit by segment and company history .Retrieved October 31,
2005, from http://www.diamlerchrysler.com
Daimler Chrysler Headlines. Retrieved November 1, 2005, from www.aaaa.org and
www.daimlerchrysler.com
Economist, The. The global car industry, Extinction of the Predator. September 8,
2005.Retrieved November 7, 2005.
Financial information. Retrieved October___10/28/05__, from http://finance.yahoo.com/
Ford Heritage. Retrieved October 25, 2005 from,
http://www.ford.com/en/heritage/default.htm?referrer=home
Ford Good Works. Retrieved October 25, 2005 from,
http://www.ford.com/en/goodWorks/default.htm?referrer=home
References
Ford financial global overview. Retrieved November 03,2005 from
http://www.ford.com/en/company/investorInformation/comp
anyReports/annualReports/2004annualReport/2004_pdfs.htm
GM has a new model for change. Smith, James. Fast Company. December 2000. Retrieved
November 04, 2005 from “http://www.fastcompany.com/magazine/41/gm.html”
Honda operating data (unit sales breakdown) and company history. Retrieved October 27,2005,
from http://www.world.honda.com
Honda Headlines. Retrieved November 1, 2005, from www.aaaa.org and
www.world.honda.com
Toyota revenues and operating income by region and company history .Retrieved November
2005, from http://www.toyota.co.jp/en/ir/library/annual/pdf/2005/03.pdf
Toyota SWOT. Retrieved October 25, 2005 from
http://www.marketingteacher.com/SWOT/toyota_swot.htm
03,