Automobile Industry Group 3 Matt Davis Charlie Kim

Automobile Industry Group 3 Matt Davis Charlie Kim Adam King Brian Larson Sean Redmond Andy Schick

S. W. O. T. Analysis Ford n General Motors n Daimler/Chrysler n

Major Strengths

Ford Motor Company n Diversity n n n n n Jaguar Volvo Mercury Lincoln Mazda Land Rover Second Largest Automaker in the World Owns Hertz Rent-A-Car Ford Motor Credit

Ford Strengths n Supportive n Gave Generously after the September 11 Attacks n Give Generously to Help Fight Breast Cancer n Support Racing Teams n n n 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 n World’s Largest Auto Manufacturer n In 2000, Sales Exceeded $183 Billion Globally n Gaining $5 Billion in Profits n n n 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 n Diversity n Chevrolet, Pontiac, Buick, Oldsmobile, GMC, Cadillac, Saturn, Hummer, Saab n Dominance n 3 rd on Fortune 500 List n 3 rd on Global 500 List n n n Alliances with Suzuki and Isuzu Motor Companies Technological Alliances with Toyota and Honda Motor Companies Setting the Standard

Daimler/Chrysler n Leaders in the Mini-Van Lines of Automobiles n Became More Sleek Looking with Time n Leaders in the Convertible Lines n Sebring

Major Weaknesses

Ford Motor Company n Firestone Tire Recalls n Caused Stock Price to Suffer--$14. 70, Lowest in Years n CEO Jacques Nasser and Chairman Bill Ford Jr. Cannot Get Along n This past Week, Bill Ford Took Over as CEO n Cash Reserves Have Sunk to $4. 1 Billion n $13 Billion on Acquisitions n $3. 5 Billion to Cover Tire Recalls

General Motors n Recalls Have Hindered Growth n 314, 000 Mini-Vans made between 1997 -2000 n Repair Power Sliding Doors n Maybe Too Diverse? n Might Lose Focus on Some Lines

Daimler/Chrysler n n n Lack of Diversification Feel the Need to Refurbish Older Lines to Stay Competitive Smaller Share of the Market than Ford or GM

Opportunities

Ford Motor Company n More Environmentally Friendly n Cleaner Engine Emissions n Working With Environmental Groups to Help Clean the Environment n Solar Power n Generosity n Giving to More Charities

General Motors n GMAC Financial Services n Mortgage, Auto, and Business Financing n Electronic Business and Digital Technology n Direct TV n On. Star System n Becoming More Environmentally Friendly

Daimler/Chrysler n State-of-the-Art Technology Center in Auburn Hills, MI n n Hard at Work to Keep Chrysler Competitive Need to Expand More Into Foreign Markets

Threats!!!! n 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 n EPA Global 500 Award n #1 of Japanese Producers n SUVs n

Toyota Weaknesses n Poor Website

Toyota Opportunities Hybrid Engines n Matrix n

Toyota Threats n Consumer Confidence

Honda Strengths Used Cars n Honda Insight n Popularity n

Honda Weaknesses Europe n Passport n

Honda Opportunities Alliances n Fuel Efficiency n

Honda Threats n Second Movers

Nissan Strengths Teams n Revival Plan n

Nissan Weaknesses Low Market Capitalization n Renault n

Nissan Opportunities n Revival Plan

Nissan Threats Low Market Share n Losing Company n

Porter's Five Forces in the Automobile Industry Charlie Kim

Five Forces Within Auto Industry Threat of New Entrants n Bargaining Power of suppliers n Bargaining power of buyers n Threat of substitute products n Rivalry among competing firms n

Threat of New Entrants n Slow sluggish state of economy Personal consumption declined from 4. 5 to 2. 9% n Productivity decreased in manufacturing level n n Automotive sector has no space for new entrants n n Small demand base and wide choice High Fixed cost and constant R&D

Bargaining Power of Buyers and Suppliers n Automakers design and assemble, suppliers have little responsibility Trust has been scarred by Ford-Firestone problem. n Essentially little power is given to suppliers n n Japanese emphasize trust in suppliers allowing for collaborative design efforts n Corporate culture allows for such an arrangement to work

Bargaining Power of Buyers n Customers take over management of world’s car business. Over capacity - wider choice – zero switching cost n More discerning customers n Dealer Freedom n Better-quality products n n Consumers take advantage of current quality in product

Threat of substitute products Natural gas n Electricity n Ethanol n Vegetable oil n Sunlight n Water n

Intensity of Rivalry among Competitors n Gas crisis during 1980’s and 90’s n n Foreign Trade increased intensity of rivalry Export becomes essential to expanding and competing

Financial Comparision Price F 16. 21 DCX 35. 4 GM 41. 84 HMC 73. 87 NSANY 9. 01 TM 49. 32 Industry S&P 500 Mkt Cap 29. 4 b 35. 5 b 23. 01 b 35. 99 b 17. 9 b 91. 2 b P/E 49. 73 NM 28. 88 15. 45 7. 31 17. 07 37. 31 29. 79 P/Sales 0. 19 0. 28 0. 14 0. 64 0. 88 0. 27 3. 68 ROE 4. 08% -4. 47% 2. 61% 12. 05% 43. 51% 9. 69% 0. 93% 17. 73%

Financial Comparison n Highlights n n Strengths Weaknesses

General Environment n Demographic Segment Population n Age n Internet n Income Distribution n

n Sociocultural Segment Jobs n Women in the Workforce n Consumers n

n Technological Segment Environment n Aluminum n

n Global Segment

Economic Segment Very International, with the main places being United States, Europe, and Japan n Historically auto stocks move with direction of North American sales cycle n Until September U. S. retail car and light truck sales declined in nine of last ten months. n

U. S. Economy Struggling in recent months n Going to have to spend its way out of sharp downturn n Congress considering temporary tax rebates and accelerate planned permanent cuts n

Japan Verging on deep recession n Predict tax revenue shortfall of $1. 1 trillion yen this year. n Livestock industry seeking $104 b yen in aid for losses from Mad Cow in September n

Germany Economic growth increase moderately n Inflation will fall n Overspending on health and sharp economic slowdown raise deficit n

Political/Legal Segment Global Agreement on Vehicle Regulations n Trade barriers n

General Motors Claim to be the pacesetter for the automotive industry n Has the largest share of the world’s vehicle market at 15. 1% n Offer a variety of services including GMAC n Strive for technological innovations such as the Onstar system n

Ford Passion for better ideas n Pushing the limits of technology and design n Striving to make the world a better place n Concerned with environment and developing more efficient automobiles n Built Ford tough n

Daimler Chrysler Striving to become the number one automobile manufacturer in the world n Formed various partnerships to enhance access to various global markets n Premium priced product n Leader in innovative designs and styles n

Honda Manufacturers of a wide range of products n Industry leader in fuel-efficiency and low emission technology n Maintains values of a small company despite competing in a global market n

Nissan Slogan of “thinking ahead” n Offer a sport edition for every model of car they produce n Development of ecologically minded transportation n Believe that design is the most vital contact they have with their customers n

Toyota Slogan is “get the feeling” n Devoted to the customer and excel in customer service n Local outreach programs n High standards for dependability n