ASSIGNMENT

Assignment

Assignment

The two variables are supply & demand. The selected articles for two variables are:

Bloomfield, G.T., 1991. The world automotive industry in transition. In: Law, C.M., Editor, 2008. Restructuring the Global Automobile Industry: National and Regional Impacts, Routledge, London, pp. 1-18.

Bonaccorsi, A. and Lipparini, A., 2009. Strategic partnerships in new product development: an Italian case study. Journal of Product Innivation Management 11, pp. 134-145.

Burt, D.N., 2009. Managing suppliers up to speed. Harvard Business Review, pp. 127-135 July-August .

Carr, C.H., 2008. Global, national and resource-based strategies: an examination of strategic choice and performance in the vehicle components industry. Strategic Management Journal 14, pp. 551-568.

Article Analysis Variable # 1: Supply

Production and demand for vehicles, which had grown in 2007, began to dip in the first half of 2008 affected mainly by the rise in oil prices. By the beginning of the third quarter, as the European economy slipped into reverse, a steeper decline began. This accelerated in a turbulent final three months.

Overall in 2008, 18.4 million vehicles were produced, down 7% on 2007. Passenger car output fell 7% (25% in the final quarter), while commercial vehicle production fell 5% (33% in the final quarter).

Markets across Europe suffered in the economic downturn; demand for cars ended the year down 7.8% while commercial vehicle registrations fell 9%; these were the sharpest drops since 1993 and would have been worse but for a reasonably stable start to 2008. Consumer choices reflected concerns about the economy. Market penetration of small cars was the highest ever at 38.8%; 4x4 penetration fell back to 9%.

Prospects for 2009 are still unclear, but signs are not positive. More than 1,000 plant stoppage days have already been announced (end of February 2009) and pressure on employment is mounting. Overall, vechicle production may drop by as much as a quarter and commercial vehicle production by at least 30%.

Europe relies on a strong automotive sector and further pressure on the sector will damage the European economy; the report highlights 2.2 million employed directly in automotive manufacturing; an additional 9.8 million rely on it for their jobs in closely related sectors. The real multiplier, in terms of employment in the wider economy, is still higher.  ACEA members generate a turnover of €551 bn, and total industry exports are worth €77bn.  Around €381 bn in taxes come from vehicles, reinforcing the sector's reputation as the engine room of Europe,

In 2008, 18.4 million vehicles were made in Europe, 7% fewer than the 19.7 million produced in 2007. Of the five major vehicle producing countries, Italy reported the worst decline (-20.3%), followed by France (-14.9%), Spain (-12%), the UK (-5.8%) and Germany (-2.8%).

Car production fell 7%, from 17.1 to 15.9 million units. Output in Austria fell most dramatically (-37.3%), followed by Italy (-27.6%) and Finland (-25%). New member states, which account for 18% of EU production fared better; Poland and Hungary reported output increases of 20.9% and 18.9% respectively.

Van and truck production reflected a dramatic decline in the economy in the ...