Group A 2 Automobile manufacturing industry Competitors overview
Group A 2 Automobile manufacturing industry Competitors overview Crystal Friend Ernita Harjati Valerie Staffey
Lead Competitors • Daimler. Chrysler 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 • Strengths. Clear, four-pillar strategy: global presence, superior products, leading brands, and innovation/technology leadership • Weaknesses. Increased market penetration and lower demand. Speed and efficiency of R&D efforts • Opportunities. Signs of economic recovery in Japan, continued energy research • Threats. Fuel 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 • Daimler. Chrysler 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 2005 September • Chrysler Group Achieves 18 th 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 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 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 • Lincoln • Mercury • Mazda • Volvo • Jaguar • Land Rover • 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 (S 500) and light truck (T 360) 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 JPY 133. 7 billion (USD 1, 181 million) at end of Q 2 2005 • Total employees: 137, 827 • Headquarters: Tokyo, Japan Reference: Yahoo Finance and www. world. honda. com
Honda Motor Corporation Product Lines • 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 F 1 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 400 h 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: Reference: www. morningstar. com
Chart Comparison: 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: 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 (%) 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 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/good. Works/default. htm? referrer=home
References Ford financial global overview. Retrieved November 03, 2005 from http: //www. ford. com/en/company/investor. Information/comp any. Reports/annual. Reports/2004 annual. Report/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,
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