Market Analysis
3. Market Analysis
A. The European Industry Description * Industry Size, Status and Growth
The automotive industry is a healthy and fundamental industry with a bright future. The EU’s automotive industry produces a third of the world’s passenger cars, producing 780 billion euros of turnover per year, with value added of over 140 billion euros. It imports far more than it exports with a total of 42.8 billion net profit of exports (2007). The EU’s car industry also provides 12.1 million of the total jobs in Europe. British car production is up 22% on the same period last year according to the Society for Motor Manufacturers and Traders. British car production is still revving ahead of the rest of the economy after official figures showed an increase in output for the 13th month in a row. Eastern Europe, including Russia and Turkey, reported the fastest growth in car sales this year. The car industry grew to a record size in 2011, despite weathering a year that began with Japan’s earthquake and ended with a gathering sovereign debt crisis in the eurozone. Both IHS Automotive and LMC Automotive (formerly JD Power Automotive Forecasting) estimate that sales of cars and light trucks will have grown by about 4 per cent this year to 75m. Forecasters are predicting that car sales and production will grow further next year, but have trimmed their estimates because of worries about the impact Europe’s debt crisis will have on demand. EU exports of motor cars were €76 billion in 2010. * As demonstrated above, production is estimated to grow in the next year, therefore it is certain that there is demand for the cars we will be producing. * However, to be entirely confident in sales, we analysed barriers to entry of the automotive industry. Barriers to entry include: already established brands as a competitive threat. * Start-up capital- this issue is not relevant to Channell Cars as we have a sum of £500 million to
A. The European Industry Description * Industry Size, Status and Growth
The automotive industry is a healthy and fundamental industry with a bright future. The EU’s automotive industry produces a third of the world’s passenger cars, producing 780 billion euros of turnover per year, with value added of over 140 billion euros. It imports far more than it exports with a total of 42.8 billion net profit of exports (2007). The EU’s car industry also provides 12.1 million of the total jobs in Europe. British car production is up 22% on the same period last year according to the Society for Motor Manufacturers and Traders. British car production is still revving ahead of the rest of the economy after official figures showed an increase in output for the 13th month in a row. Eastern Europe, including Russia and Turkey, reported the fastest growth in car sales this year. The car industry grew to a record size in 2011, despite weathering a year that began with Japan’s earthquake and ended with a gathering sovereign debt crisis in the eurozone. Both IHS Automotive and LMC Automotive (formerly JD Power Automotive Forecasting) estimate that sales of cars and light trucks will have grown by about 4 per cent this year to 75m. Forecasters are predicting that car sales and production will grow further next year, but have trimmed their estimates because of worries about the impact Europe’s debt crisis will have on demand. EU exports of motor cars were €76 billion in 2010. * As demonstrated above, production is estimated to grow in the next year, therefore it is certain that there is demand for the cars we will be producing. * However, to be entirely confident in sales, we analysed barriers to entry of the automotive industry. Barriers to entry include: already established brands as a competitive threat. * Start-up capital- this issue is not relevant to Channell Cars as we have a sum of £500 million to