Car manufacturing costs rise as players continue to consolidate: Apple and Google now pose a serious threat to manufacturers

  • ID: 4538328
  • Report
  • 19 pages
  • MarketLine
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Car manufacturing costs rise as players continue to consolidate: Apple and Google now pose a serious threat to manufacturers

Summary

The cost of manufacturing cars has been on the rise in recent years as rising commodity prices coupled with increased protectionism is making the acquisition of key raw materials more expensive. On top of this the impending arrival of Google and Apple will further strengthen rivalry in the industry.

Key Highlights
  • Players in the car manufacturing industry have been under great pressure in recent years to manufacture vehicles that are more environmentally friendly.
  • In 2016 Mercedes head Dieter Zetsche for example stated that his company now sees tech giants such as Google and Apple as its main rivals and threats rather than Audi or BMW.
  • The emergence of huge tech giants into the car manufacturing industry means that the traditional players like Ford and Toyota will no longer be the behemoths they once were as far as players within the car manufacturing industry are concerned.
Scope
  • Explores the reasons why the price of manufacturing are rising
  • Explains why key commodities such as cobalt and lithium are witnessing rising prices
  • Analyzes the ways in which players are responding to rising costs
  • Explores what impact the arrival of tech giants into the car manufacturing industy will have
Reasons to buy
  • What are the reasons for the rising prices of key commodities like aluminum, lithium and cobalt?
  • Why are players operating in this industry worried about the entry of tech giants?
  • How are players respondig to rising costs in manufacturing?
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Overview
Catalyst
Summary
Rising commodity costs and protectionism make car manufacturing more expensive
Eco-Friendly legislation boosting demand for pricier aluminum as players bid to reduce car weight and emissions
Growth in electric cars strengthens demand for increasingly expensive commodities like Cobalt and Lithium
Protectionism resulting in players paying more for key manufacturing components like steel
Players responding to rising costs by entering partnerships and introducing robots
Consolidation in the industry intensifies as manufacturing costs continue to rise
Joint ventures with Asian partners will intensify as demand for cars in West stagnates
Robots taking over as labor becomes increasingly scarce
Cooperation between car manufacturers and tech companies will grow
Threat of tech giants Apple and Google forces players to adapt
Strong financial power of tech giants will result in further consolidation
Conclusions
Consolidation in the car manufacturing industry to continue
Arrival of tech giants coupled with rising manufacturing costs intensifies rivalry in the industry
Appendix
Sources
Further Reading
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About the Publisher
Disclaimer

List of Tables
Table 1: Car manufacturers and tech giants ranked in terms of Cash from Operating Activities, $ millions, 2017

List of Figures
Figure 1: Global price of aluminum and price of hard rolled steel bands in the USA and Western Europe, $ per metric ton, 2013-2018
Figure 2: Global price of Cobalt and Lithium in $ per metric ton, 2013-2018
Figure 3: US steel imports percentage by country, 2017
Figure 4: Saic-GM an example of a successful joint venture between a global and local player
Figure 5: One of the potential designs of Apple‘s iCar
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