Shanghai Auto Competition
Now Viewing Shanghai Auto's competition in: Automobile Manufacture (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
How are the company’s products sold? - Independent dealers are the primary outlets for the sale of new automobiles in the US.
How does the company select its dealer network? - Manufacturers require dealers to maintain certain standards of operation that reflect positively on the manufacturer.
Do the company's dealers carry its products exclusively? - Some dealers have exclusive agreements with a single manufacturer; other dealers represent multiple manufacturers.
How many different products does the company manufacture? - Manufacturers typically develop multiple product lines, often marketed under different brands.
How does the company market to consumers? - Marketing is targeted to consumers by income, age, and sex by highlighting vehicle characteristics such as performance, economy, quality, and safety.
What kinds of advertising has the company found most effective? - Advertising programs are delivered primarily by TV, radio, newspapers, and the Internet. Manufacturers advertise directly and support cooperative dealer advertising programs.
What is the average selling price of the company's products to consumers? - The average price of a new car in 2009 was about $26,000, according to Comerica Bank's Auto Affordability Index.
Competitive Landscape
Demand is driven by employment and interest rates. The profitability of individual companies depends on manufacturing efficiency, product quality, and effective marketing. Large companies have economies of scale in purchasing and marketing; smaller companies can compete by focusing on specialized markets. The industry is capital-intensive: average annual revenue per employee is nearly $2 million.
Business Challenges
CRITICAL ISSUES
Import Competition - Imports represent a rising percentage of US auto sales. Between 1996 and 2008, US market share for Chrysler, Ford, and GM dropped from 73 to 43 percent. Imports that generally are smaller and more fuel-efficient increase in popularity when fuel prices rise. Offshore manufacturers also enjoy the advantages of substantially lower wages and benefits for employees and lower costs for suppliers. The strength of the dollar against the yen and other foreign currencies can impact import prices.
Dependence on Employment, Interest Rates - Auto sales are subject to the health of the US economy, especially employment and interest rates. A new car purchase is the second-largest investment most families make, next to a home. Consumers often delay buying new cars during times of job uncertainty. Most new vehicle purchases are financed, so costs are sensitive to interest rate changes.
Industries Where Shanghai Auto Competes
- Automotive & Transport
- Auto Manufacturing(primary)
- Auto Parts Manufacturing
- Truck, Bus & Other Vehicle Manufacturing
- Industrial Manufacturing
- Agricultural Machinery Manufacturing
