CHERY A CASE STUDY OF MARKET SEGMENTATION, TARGETING AND MARKET POSITIONING

Topics: European Union, Automotive industry, Japan Pages: 7 (2683 words) Published: November 27, 2013


A Report of European Automobile Industry

Contents

1. Introduction…………………………………………………………3

2. Background…………………………………………………………..3

3. The effects of Environmental Policy………………………………...5 
4. The impact of the European Single Market…………………………10 «4.1 Free movement area for goods, services, capital and labour «4.2 The sector-specific and horizontal legislation
5. SWOT analysis on clean and energy efficient vehicles strategy……12 « 5.1 Strengths
« 5.2 Weaknesses
« 5.3 Opportunities
« 5.4 Threats
6. Conclusion and recommendation………………………………….....14

7. References……………………………………………………………16

Introduction
This report will focus on the European automobile industry, which is a cornerstone sector of European economy and the largest R&D private investor in Europe. However, it is also currently facing several severe challenges to its prosperity, such as environmental issues with reference to CO2 emissions and fuel economy, dramatic downturns demand caused by the economic recession, fierce global competition from Japanese manufactures. There are a number of policy fields which have a strong link to the automobile industry and affect activities within this sector. At beginning of this report will look at environmental policy on emission levels from vehicles. Furthermore, the impact of Single Market on the car manufacturing sector will be explored. Finally, the SWOT analysis will be applied to analysis the European automobile industry in the context of business environment.

Background
The automobile industry is one of Europe’s key industries, which has been exerting a far-reaching impact on the modern global economy. In the meantime, it has been influenced by the context of EU as well. There can hardly be any doubt about the world-class car industry of EU is an engine for growth, exports, innovation, and jobs. The EU car industry plays a key role in Europe’s economic prosperity, according to figures, “presenting an annual turnover of approximately €780 million and more than 18 million motor vehicles per year were manufactured, at the same time, reaching €60 billion of the trade surplus and volume of the exports amounting to €125 billion”(EU Focus 2009). In addition, with rapid development of the European car industry in period of two years, it represents 4% of GDP and a €90 billion trade surplus (in 2011). Besides, 12 million sector-related jobs were provided, including more than two million direct jobs and an additional ten million indirect jobs in both large companies and SMEs (7% of total European manufacturing employment). So it as a whole (automotive producers, supply chain and aftermarket, including thousands of SMEs) is of strategic importance to the European economy and employment” (Europa 2012). With investment of approximately €30 billion annually in R&D, Europe’s auto sector has become the largest R&D private investor in Europe. There is a strong linkage between automotive manufacturer and many key supplier sectors, including electronics, mechanical and electrical engineering, information, technology, steel, chemicals, plastics, metals, and rubber (EU Focus 2009). However, because of the mutual dependence of the automotive supply chain, any downturn in the auto sectors could cause the depression of the European economy as a whole, which is a serious ripple effect. “The automobile industry is one of the sectors which have been hardest hit by the current economic crisis. In 2008, sales of new cars in Europe fell by 8% and they can be expected to fall further in 2009” (Europa 2009).There is no denying the fact that the automotive industry means being able to bring economic growth, innovation and employment, But in recent years, with the globalization and the increasingly fierce market competition, labor cost of the EU is increased and labor productivity is reduced, which would lead to the relocation of many production lines. Because of the EU's strict...

References: 1. European Commission (2012), CARS 2020: for a strong, competitive and sustainable European car industry, [Online], Europa, available at: http://europa.eu/rapid/press-release_IP-12-1187_en.htm (assessed 06/12/2012)
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3. European Commission(2012), Enterprise and Industry, Industry Policy, European automotive industry gears up for 21st century, [Online], available at: http://ec.europa.eu/enterprise/magazine/articles/industrial-policy/article_11043_en.htm
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5. Europa (2009), The competitiveness of the car industry and climate change,[Online], available at: http://europa.eu/rapid/press-release_SPEECH-09-51_en.htm?locale=en
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7. ACEA (2009), European automobile industry report-European automobile manufacturers association, [Online], available at: http://www.acea.be/images/uploads/files/20090519_ACEA_Industry_Report09FULL.pdf
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9. European Commission (1997), PANORAMA of EU INDUSTRY 97, Luxembourg: Office for Offcial Publications of the European Communities, 1997, Printed in Belgium.
10. European Commission (1997), The Single Market Review, SUBSERIES 1: IMPACT ON MANUFACTURING: Motor vehicles, Kogan Page. Earthscan, 120 Pentonville Road, London N1 9JN.
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