Toyota vs. BMW: A Comparative Study of Financial Statements
Toyota vs. BMW
Industrial Overview The automobile industry is a fast growing and evolving industry that relates to the design, manufacturing and sale of an automobile. Automobiles in terms of the industry mostly refer to motor vehicles with engines that have internal combustion chambers. It is true that car manufacturers experience high sales to businesses and car rental companies, also called fleet sales, but consumer sales is the largest source of revenue. A point to bring up here would be the ‘parts market’. The parts market constitutes a very lucrative part of the industry. For example, a new car might cost a certain amount, but if the consumer were to buy separate parts and assemble the car, all the parts needed to construct that car would cost 3 to 4 times more. The Automobile industry is highly labor intensive and requires high amounts of capital. Majority of costs for manufacturers are incurred in labor, raw material and marketing. Although machines and robots are mainly used in the production line, there are substantial labor costs associated with the design and engineering of an automobile. Specific grads of steel, aluminum, plastic etc are bought from suppliers. Car manufacturers also buy finished goods from other companies to use in the automobile. They also spend large amounts of money into advertising, mostly print media and broadcast advertising and market research. The idea is to identify consumer trends/ preferences or even set market trends. The automobile parts sector may be broken down into 3 major categories. They are Original Equipment Manufacturers (OEMs), Replacement Parts Production & Distribution and Rubber Fabrication. OEMs are companies that manufacture parts and fixtures that are used during the production of the car, e.g. door handles, seats, plastic levers. Replacement Parts Production & Distribution companies produce parts and fixtures to be used in the automobile after it has been bought by the consumer. Rubber
Industrial Overview The automobile industry is a fast growing and evolving industry that relates to the design, manufacturing and sale of an automobile. Automobiles in terms of the industry mostly refer to motor vehicles with engines that have internal combustion chambers. It is true that car manufacturers experience high sales to businesses and car rental companies, also called fleet sales, but consumer sales is the largest source of revenue. A point to bring up here would be the ‘parts market’. The parts market constitutes a very lucrative part of the industry. For example, a new car might cost a certain amount, but if the consumer were to buy separate parts and assemble the car, all the parts needed to construct that car would cost 3 to 4 times more. The Automobile industry is highly labor intensive and requires high amounts of capital. Majority of costs for manufacturers are incurred in labor, raw material and marketing. Although machines and robots are mainly used in the production line, there are substantial labor costs associated with the design and engineering of an automobile. Specific grads of steel, aluminum, plastic etc are bought from suppliers. Car manufacturers also buy finished goods from other companies to use in the automobile. They also spend large amounts of money into advertising, mostly print media and broadcast advertising and market research. The idea is to identify consumer trends/ preferences or even set market trends. The automobile parts sector may be broken down into 3 major categories. They are Original Equipment Manufacturers (OEMs), Replacement Parts Production & Distribution and Rubber Fabrication. OEMs are companies that manufacture parts and fixtures that are used during the production of the car, e.g. door handles, seats, plastic levers. Replacement Parts Production & Distribution companies produce parts and fixtures to be used in the automobile after it has been bought by the consumer. Rubber