Project three
Industry trends & decision models
Lava Qurbani
US Current statistics and facts
Automobile industry account for 3% for the US G.D.P
Best Selling Car model – Ford Signature F-series followed by Ram P/U and Chevrolet Silverado (Light Trucks)
Toyota – best selling Non-Domestic Automaker in the United States.
By end of 2020, 287.5 Million cars registered in the United States.
About 845,295 SUVs and Pick-Up trucks sold in the January 2020 compared to 300,983 passenger cars sold in the same month.
Passenger car retail sales decreased by14.9% compared to the 8.15 of the same month.
Most popular passenger model is the Toyota Camry as of Jan 2020, followed by Honda Civic and Toyota Corolla.
New Car model sales increased in Jan 2020 in comparison to Jan 2019.
All statistics from Mark Line Data center and Statista
Drivers seem to opt for SUVs and Light trucks as opposed to more fuel efficient passenger automobiles and smaller ones in Jan 2020.
Based on US electric car sales statistics, with 19,000 estimated sales, the Tesla Model 3 was the most sought-after electric vehicle and the 11th overall best-selling car in the US in January 2020.
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US CAR SALES BASEDON ON HISTORICAL DATA
In 2008, the AUTOMOBILE industry declined in retail new car sales by 18% followed by another one in 2009 (21%). –GoodCarBadCar,net
The U.S economy healed from this Great Recession in 2015 where it healed from the financial crisis. - GoodCarBadCar,net
In 2000, United States peaked in new Retail sales with over 19million sales sold.
2018, Car sales grew to 40.42 million used cars. – Carurance,net
In 2009, the automobile market grew in value to $117.9B to $77.8B. GoodCarBadCar,net
The 2008 global financial crisis had a severe impact on the US auto industry in terms of new vehicle sales. In 2008, the industry suffered an 18% decline in new car retail sales, followed by a 21% decline in 2009.
US auto sales peaked in 2000, with almost 18 million new cars sold in that year alone. After the Great Recession, it took until 2015 for the US car market to heal from the damage inflicted by the financial crisis and reach that 2000 sales mark once again.
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US CAR SALES BASED ON FACTS AND STATISTICS
Ford – the most preferred Light truck and best selling automobile comes from Ford manufacturers existing since 1948. – USA Today
Since 2015, Toyota continues to lead in foreign car sales ,the top-selling foreign automaker behind Ford, General Motors. It has a 1/3 of the total market share- Investopedia.
General Car sales statistical data indicate that Flat Chrysler, General Motors, Ford dominate the automotive industry for years.
Tesla is the leading innovator with a significant market share of nearly 30%
Estimates regarding the US automotive industry predict that by the end of 2020 there will be 287.3 million cars registered in the country.
US new car sale peak seasons occur in spring, from the end of February through the end of May, and in autumn, from September through November.
Automotive sales statistics reveal that average car prices tend to increase by 10% to 15% during periods of high demand. On the other hand, the prices of motor vehicles usually drop significantly in December.
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US STATISTICS SALES BY TYPE
Crossovers are Americans’ favorite type of passenger vehicle.
This category accounts for over 40 percent of automobile sales in the United States.
The most popular models include Honda’s CR-V, Nissan’s Rogue, and Toyota’s RAV4.
In 2019, U.S. auto buyers bought almost 450,000 units of Toyota’s RAV4 model, making it the best-selling vehicle in this category.
The RAV4 was one of the very first specimens of its kind, as production of this model began in 1994. Crossover SUVs (sport utility vehicles) manage to combine the good fuel efficiency levels of compact and midsized cars and the higher seating positions of light trucks. They gained in popularity when fuel prices were low and,
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UNITED STATES GROWTH CHART
Above is the unit volume sales and unit growth rate of the vehicle industry in the United States.
From a peak of almost 18 million new car sales in 2000, it took another 15 years till 2015 for the new car market to get back to that mark.
Things stayed flat in 2016 and were slightly down in 2017 with things holding steady in 2018.
It remains to be seen how things change in the U.S automarket in terms of new car sales but as things like the sharing economy and alternative mobility continue to concern automakers while a booming economy continues to push the industry along.
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Position of us automobile sales worldwide
In 2019, global car sales were mostly weaker with worldwide car sales around 4% lower than a year ago.
China remained by far the largest single-country car market in the world but sales were down by a tenth in 2019.
The US market was down by 1.4% while new car sales in Europe increased by 1.2%.
Car sales were sharply lower in India while the Japanese and Russian market remained weak.
Car sales in Brazil increased by nearly 8% in 2019.
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AUTOMOTIVE INDUSTRY TRENDS
Market size expected to reach 6.0 between 2019-2026 – OpenPr and Onion Market report
Automotive market estimated worth $273.4B in 2021 making it to contribute to 1.5-2% of the US GDP.
Labor force expected to grow with 4.2 million citizens working for the Automotive industry – Franchise.com
Over 258.9 million passenger automobiles registered in 2018 compared to 5.3million in 2014, indicating a growh in the passenger fleet.
Decline in scrappage rate with about 11.4 million cars retiring in 2014 , a figure lower than the registration rate by 42% - HIS Markit
The fleet gets older with the increase in the average age of registered verhicles steadily increasing from 11.5 to 11.7 years in 2015 and 2017 respectively.
The automotive industry is a huge, diverse set of manufacturing and service businesses that bring cars and trucks to market, keep them in working order, paint, clean, fix and even trash them when it’s time.
While there are often interesting business opportunities at the auto dealership level, it’s generally after the cars are sold that things get really exciting for those interested in franchising.
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Automotive industry customer trends & demands
Among the social media trends- 9% believe that self driving cares are the transformative technologies of 2020.
Looking at responses by country, those in the US were most likely of all the countries to vote for self-driving cars, while responses from Spain were least likely of all the countries likely to choose this option.
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Other trends in automotive idnsutry
The Internet of Things (IoT) has led to a wave of connectivity that has influenced almost every industry in the world.
Automotive usage based insurance (UBI) is a category of motor insurance that considers various factors for the calculation of the premium.
V2X & V2G Technology trends; intelligent traffic systems, collision avoidance, parking management systems, emergency vehicle notifications, and remote monitoring and diagnostics, among others.
Connected Vehicles and the Vehicle as Hub trends include uman-machine interface, advanced driver assistance systems (ADAS), and autonomous vehicles are the various applications that will drive the vehicle as a hub concept.
Mild Hybrid trends are those of high voltage electrical systems and those of need to reducing CO2 emissions.
Car Health Monitor trends are those of drivers fatigue, heart rate monitoring, and sleep deprivation is detected and notified with warning systems.
Truck Platooning are those of vehicle-to-vehicle (V2V) communication and autonomous freight transport
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Decision making model for automobile stakeholders
Organizational decision survey indicates that different decision need different approaches.
The decision types include Delegated decisions, Cross-Cutting decisions, Big-Bet decisions.
Another parameter is the level of exposure applicable to Middle Managers, Senior Managers and C-level executives.
Research indicates that the speed, accuracy and quality of the decisions made strongly relates the company’s performance - returns
Make decisions at the right level.
Focus relentlessly on enterprise-level value.
Get commitment from the relevant stakeholders.
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Best decision making model (research-based)
Rational for sustainable automotive industry in terms of alternatives and choice of eco-friendly alternative materials. (Al-Oqla et al,2015).
Reason – Decision based on economic and technical standpoints and the Automotive industry considered as a Multi-Criteria decision making problem
Case study 2: The SAIPA Car company. Decision made for the ideal technology for disposing wastes as well as transport fleet implementation. Rabbani, Sadat and Farrokhi-Asl 2020).
Reason – Decision criteria based on technical, environmental, social, economic parameters.
Al-Oqla, F. M., Sapuan, S. M., Ishak, M. R., & Nuraini, A. A. (2015). Predicting the potential of agro waste fibers for sustainable automotive industry using a decision making model. Computers and Electronics in Agriculture, 113, 116-127.
Rabbani, M., Sadati, S. A., & Farrokhi-Asl, H. (2020). Incorporating location routing model and decision making techniques in industrial waste management: Application in the automotive industry. Computers & Industrial Engineering, 148, 106692.
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Lessons worth accounting for
Sustainable development and Environmental protection continues to increase with the automotive industry.
A vital lesson is be environmental conscious in the effort of ensuring sustainability of vehicles
Legislation is vital in managing the automobile parts as well procuring them therefore the decision-making criteria should include the legal factors.
A systematic technique which includes innovation is key in the sustainability of the automotive industry especially since technology is among the parameters in the decision making model.
Key take-aways
The Automotive industry is on the rise and the future is promising which contributes about 3% of the U.S GDP.
Self-Driving cars plus the renewable energies are promising technologies in the 2020 social media trends- probable the reason Tesla is gaining popularity.
The new retail sales continue to rise based on the Jan 2020 and future forecast.
Personal and Luxury cars continue to rise in sales in comparison to passenger cars
Stakeholders should adopt a multi-criterial decision model based on technical, legal, .economic and social parameters.
The proper management of ELVs can bring improved sustainability performance for any society or organization
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References and additional reading
Al-Oqla, F. M., Sapuan, S. M., Ishak, M. R., & Nuraini, A. A. (2015). Predicting the potential of agro waste fibers for sustainable automotive industry using a decision making model. Computers and Electronics in Agriculture, 113, 116-127.
Cabral, I., Grilo, A., & Cruz-Machado, V. (2012). A decision-making model for lean, agile, resilient and green supply chain management. International Journal of Production Research, 50(17), 4830-4845.
Jamil, N., Besar, R., & Sim, H. K. (2013). A study of multicriteria decision making for supplier selection in automotive industry. Journal of Industrial Engineering, 2013.
Renzi, C., Leali, F., & Di Angelo, L. (2017). A review on decision-making methods in engineering design for the automotive industry. Journal of Engineering Design, 28(2), 118-143.
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