Car manufacturing costs rise as players continue to consolidate: Apple and Google now pose a serious threat to manufacturers
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.
- 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.
- 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?
Rising commodity costs and protectionism make car manufacturing more expensive 6
Eco-Friendly legislation boosting demand for pricier aluminum as players bid to reduce car weight and emissions 6
Growth in electric cars strengthens demand for increasingly expensive commodities like Cobalt and Lithium 7
Protectionism resulting in players paying more for key manufacturing components like steel 8
Players responding to rising costs by entering partnerships and introducing robots 10
Consolidation in the industry intensifies as manufacturing costs continue to rise 10
Joint ventures with Asian partners will intensify as demand for cars in West stagnates 11
Robots taking over as labor becomes increasingly scarce 12
Cooperation between car manufacturers and tech companies will grow 13
Threat of tech giants Apple and Google forces players to adapt 13
Strong financial power of tech giants will result in further consolidation 14
Consolidation in the car manufacturing industry to continue 15
Arrival of tech giants coupled with rising manufacturing costs intensifies rivalry in the industry 15
Further Reading 17
Ask the analyst 18
About MarketLine 18
List Of TablesList of Tables
Table 1: Car manufacturers and tech giants ranked in terms of Cash from Operating Activities, $ millions, 2017 14
List Of FiguresList 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 7
Figure 2: Global price of Cobalt and Lithium in $ per metric ton, 2013-2018 8
Figure 3: US steel imports percentage by country, 2017 9
Figure 4: Saic-GM an example of a successful joint venture between a global and local player 11
Figure 5: One of the potential designs of Apples iCar 13
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