Luxury Car Market

Good Essays
There are distinctive barriers to entry in the automotive industry. The main 10 firms operating in the automotive industry have great power in terms of reputation, finances, experience, technology and existing large product portfolios. It would be highly difficult for a new company to compete with the above.
• The existing companies within the industry are joining forces, which at times do have detrimental effects for new comers to the market and for some existing companies. For instance, the situation of Rover in the UK. In the past, the profitable components of Rover were purchased by BMW and Ford, and Rover was left producing poor quality and old vehicles, which consequently led to its bankruptcy in April, 2005 (BBC, April 2005). 
• Due to the environmental and technological factors mentioned previously, car firms must heavily invest in research and development. New comers to the industry may find it difficult to compete with the investments made by existing large firms.
• It is anticipated that the ways of being able to over come the barriers to entry in this industry would be to enter the market with vehicles that consume other forms of energy and vehicles that are environmentally friendly. 
• As mentioned previously, Chinese cars are entering the industry. It is believed that they were able to overcome the barriers to entry due to the prices of their vehicles. Through cheap labour and components, Chinese firms are able to produce cars at a lower cost than the American manufacturers. (China daily, 2005)
Threat of Substitutes

• Although the public are becoming increasingly aware of global warming and therefore choosing other forms of transport such as trains, busses and bicycles, it can still be said that cars and other private vehicles are viewed as a necessity especially for those who do not live in city centres.
• It is therefore believed that no real threat of substitutes exist today.
• In the future, if cars that use other forms of

You May Also Find These Documents Helpful

  • Satisfactory Essays

    growth in the luxury car market in India is much more than mere market dynamics in a particular car segment. It is a reflection of the changing lifestyle of the affluent class in the country. Luxury car majors in India - Mercedes-Benz, BMW and Audi put together have around 85% market share. The German car brand Mercedes-Benz had first-mover advantage as it had started operations in India in 1995 and there was no direct competition in this category. So, it remained ‘Numero Uno’ luxury car brand in India…

    • 278 Words
    • 2 Pages
    Satisfactory Essays
  • Best Essays

    Luxury Car Market in Singapore Page of Contents Introduction page 3 Environmental Scan page 4 Perceptual Map page 6 Brand Idea page 7 Trends and Ideas page 7 List of References page 8 Appendix page 9 Introduction Definition Luxury cars go beyond average, conventional cars in the sense that they provide way more than basic necessities. Luxury cars have more comfortable, spacious seats made from better materials like leather, have more tools and equipment than what is needed…

    • 2515 Words
    • 11 Pages
    Best Essays
  • Good Essays

    Luxury Cars

    • 1660 Words
    • 7 Pages

    INTRODUCTION:- A Luxury car is a styled, luxurious automobile intended for comfort and satisfaction of its owner or driver, sacrificing passenger space, cargo capacity and other practical concerns for the sake of style. The luxury cars are very expensive and its price range is above Rs 20 lakhs. Hence these cars are affordable and are preferred by high income group. A Luxury car segment is one which is packed with extra dose of luxury features, designed with perfection and beauty for a guaranteed…

    • 1660 Words
    • 7 Pages
    Good Essays
  • Better Essays

    Luxury Market

    • 2276 Words
    • 10 Pages

    Indian Luxury Car Market – An Insight The recent growth in the luxury car market in India is much more than mere market dynamics in a particular car segment. It is a reflection of the changing lifestyle of the affluent class in the country. In India, the luxury car segment (Average Price 25-30 Lakh) has been growing at an average rate of 20% or above during recent years; it seems to be least affected by the global financial crisis. During worst recession period when world was facing low market demand…

    • 2276 Words
    • 10 Pages
    Better Essays
  • Powerful Essays

    Luxury Market

    • 4001 Words
    • 17 Pages

    • Cognizant 20-20 Insights Luxury Retail’s Evolving Landscape Executive Summary The luxury goods market may appear to many as a recession-resistant industry that generates over $1 trillion in revenue, but a closer look at the figures suggests otherwise. Luxury retailers, which were growing 9% annually a year before the recession, saw sales drop on average by more than 13 percentage points from 2007 to 2009. Meanwhile, luxury manufacturers saw their revenues decline by an average of 21 percentage…

    • 4001 Words
    • 17 Pages
    Powerful Essays
  • Satisfactory Essays

    Luxury Car Marketing

    • 332 Words
    • 2 Pages

    EXECUTIVE SUMMARY Luxury cars are a very small part of the pie in the total Indian automobile markets. However, they are a potent weapon for an automobile company to have in its arsenal. When effectively deployed by focused positioning, winning strategies aimed at the right target, they have the ability to produce “super-normal” contribution margins and wealth for the company. Dominated by Mercedes Benz till a major part of the early 2000s, the luxury car market started picking up momentum fueled…

    • 332 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Luxury Car Overview

    • 1667 Words
    • 5 Pages

    Industry Overview A luxury car is any car costing greater than $30,000. Companies such as BMW, Mercedes, Lexus, Cadillac, and Lincoln sell high-end vehicles. The luxury car industry accounts for about fifteen percent of the United States car market. Not only do luxury car dealers sell new high-end vehicles, but they also sell used vehicles. Most luxury car dealerships provide excellent customer relations and take pride in their service management and repair services. The luxury car industry can be divided…

    • 1667 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Lexus and Luxury Car

    • 4880 Words
    • 27 Pages

    COMPREHENSIVE CASES Case 1 Running the Numbers: Does It Pay? (Download the data sets for this case from www.cengage. com/marketing/zikmund or request them from your instructor.) Dr. William Ray, a research consultant, has received a government grant of $75,000 to fund research examining how aspects of a student’s college experiences relate to his or her job performance. Senator B. I. G. Shot is being lobbied by his constituents that employers are discriminating against people who do not like…

    • 4880 Words
    • 27 Pages
    Powerful Essays
  • Good Essays

    German Luxury cars

    • 3992 Words
    • 13 Pages

    German Luxury-Car Makers Look Beyond Home Market BMW to expand Plant in U.S., Daimler Will Boost Investment in China Venture By William Boston and Neal E. Boudette Updated March 28, 2014 2:56 p.m. ET A new BMW X4 is unveiled last Friday at the BMW manufacturing plant in Greer, South Carolina as the Germany luxury auto maker announced a $1 billion expansion for the plant. Associated Press German luxury car manufacturers BMW AG and Daimler AG have unveiled plans to spend billions on new car factories…

    • 3992 Words
    • 13 Pages
    Good Essays
  • Best Essays

    Luxury Market in China

    • 2917 Words
    • 12 Pages

    2011 “China’s Luxury Market, 30 years in the making: How Chinese political policy and tradition over the last 30 years created China’s insatiable appetite for luxury goods” China is positioned to become the world’s largest luxury market in five years and a study by Datamonitor reported China’s luxury goods market was worth $9.4billion by the end of 2009, which accounted for 27.5% of the world’s luxury goods market.[1] They also predict that by 2015, China’s market will be valued at $14…

    • 2917 Words
    • 12 Pages
    Best Essays