Toyota vs. BMW
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 fabrication includes all rubber parts used in an automobile e.g. tires, hoses, tubes, linings, etc.
The Toyota Motor Co. is considered as one of the world’s largest and most successful non American automobile manufacturer. With its HQ based in Aichi, Japan, it is ranked amongst the Fortune 500 at number 7. Considered Japan’s number 1 car manufacturer, Toyota Motor Corporation, has demonstrated a continuous driving ambition to become eco-friendly. The company has excelled in production of hybrid-powered (gas and electric) cars. Their flagship for this endeavor is held by the car model the Prius and the newly introduced Camry. Its gas-powered cars, pickups, minivans, and SUVs include such models as Corolla, 4Runner, Land Cruiser, Sienna, the luxury Lexus line, the Scion brand, and a full-sized pickup truck, the V-8 Tundra. Besides consumer based, on road vehicles, Toyota also makes forklifts and manufactures housing, and offers consumer financial services. Setup in 1937, Toyota was once considered an under dog in the global automotive game, but now, Toyota has already passed Chrysler and Ford and is closing in on General Motors.
Toyota has already mastered the art of efficiently manufacturing an automobile. Its R&D now focuses on 3 key efforts- environment, safety and energy. A perfect example would be the manufacturing facility in Kentucky. Behind Toyota's car assembly line are sophisticated information systems supporting. This enables the company to execute a business processes that helps eliminate waste, limit inventory buildup and continually improve production. Robots weld and put together parts onto car body frames, which are then hung on an overhead conveyor system to begin a ride through 7.5 million square feet of factory floor. This leads to cars like the Camry and the Solara to be rolled off the assembly line every 55 seconds. Toyota has consistently produced higher-quality cars, with fewer worker-hours, lower inventory and fewer defects, than any...
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