Task: Give an overview of the automobile industry of Australian Market
The automotive industry comprises manufacturers of cars as well as dealers specializing in various cars and motor vehicles. This sector is encircled by dynamic investors such as car makers, automobile dealers, component vendors, and mechanics. Automotive industry's leading players are generally involved in manufacturing, exploring, developing, marketing and repairing motorized vehicles and its replacement parts. Furthermore, the international automotive industry is growing at a higher pace and Australia has the same record of progress. (Adari and Lakshmipathy, 2015)
Review of the Australian automotive industry
The automotive sector is strategically important for the economy of Australia as the automotive industry is its biggest manufacturing base. This sector funds several other sectors including copper, iron, glass, leather, cement, plastics, electronics, as well as contributing to the country's exports. The Australian Automotive Industry's annual revenue tops $160 billion and is one of Australia's leading sources of taxes. The Australian automotive industry supports around 4 lakh people and serves the local community by providing state-of-the-art automotive technology (Conlon and Perkins, 2018). The Australian automotive industry also offers cutting-edge green engineering for reducing carbon footprint and thus leading to the preservation of the ecosystem. Throughout Australia, road traffic is by far the most favoured public transport as well as cargo transportation surpassing air, marine and rail modes (Thite et al., 2016). Motor vehicle are considered by the local people to be the easiest and most accessible mode of transportation and is therefore a notable sector that belongs to the Australian economy.
Assessment of the competitive nature of the industry with respect to TATA Motors
Tata Motors is an Indian Automobile company, has tried to establish a variety of lightweight passenger vehicles in the Australian Motor vehicle markets with the collaboration of the existing Australian Car dealer, Fusion Automotive (partnership agreement). This collaboration will allow Tata motors to reach the dynamic Australian markets, allowing Fusion Automotive exclusive distribution rights. (Ray and Das, 2009).
Let's look at and assess the Australian Automotive industry competitiveness by analysing TATA motors position using the five-force model of porter.
Figure 1: Porters Five- Force Model
(Source: Created by Author)
Rivalry among existing competitorsIn the Australian automotive sector, there has been intense competition for Tata motors Australia. General Motors, Audi, Mazda Automobiles, Nissan Australia, ATECO Automobiles, Lexus Motor Company, Volks Wagon Australia, Mercedes Benz, Toyota Automobile Australia, etc. would be some of Tata motors Australia's national and international rivals in Australia.
Threat of the New Entrants
The introduction expense to establish a manufacturing facility for automobiles is quite high. It would also take a long time to earn consumer trust in the automotive portion. Buyers tend to buy cars as premium commodities from well-established manufacturers. The new entrant's threat would, therefore, be significantly low.
Threat of the Substitutes
Instances of alternatives would be the use of public transport or bikes by Tata's potential consumers in the Australian market. Nevertheless, the use of cars is by far the most favoured transport of the Australian people. This implies a lower risk of the business's replacement threat.
Bargaining power of suppliers
Tata motors have more than 128 vendors providing the business with raw material for automotive manufacturing. As a direct consequence, vast numbers of vendors lead to lower negotiating power of vendors, which is financially beneficial for the business. (Bruche, 2010).
Bargaining power of Buyers
The presence of a number of car manufacturers in the Australian market allows Buyers' bargaining position to be exceptionally high. Plentiful options available to the firm's core customers require a need to draw its key customers effectively. This would be exemplified by the list of suggestions listed in the following lines:
Tata motors Australia’s endeavour towards global expansion could undoubtedly be the task that would also affect the regional cultures, trends, and expectations of vehicles, and the strategies of trading and product interactions. The following are just a few of the suggestions to the firm that would support its effective extension in Australia (Cavanagh and Freeman, 2012)
In Australia, the automotive industry as a whole, including the Tata Motor Company, is currently experiencing the pressures of high raw material costs and fuel prices, strict government legislation and intense competition across the market nationwide. Tata motors Australia are aimed at bringing innovation and new technologies to Australia's automotive industry, beginning with the division of light commercial automobiles. Tata motors marketing strategy assignments are being prepared by our marketing assignment help experts from top universities which let us to provide you a reliable assignment help online service.
Adari, P. and Lakshmipathy, G. (2015) 'How do smaller firms in theWest use Frugal Innovationwhich in its nature best suitedfor emerging markets, havingno subsidiaries in the localmarkets essential to developfrugal solutions for those emerging markets?', Frugal Innovation in Smaller Firms in the West.
Bruche, G. (2010) 'Tata Motor's transformational resource acquisition path: A case study of latecomer catch-up in a business group context', Working papers of the institute of management berlin at the berlin school of economics and law (HWR Berlin).
Cavanagh, A. and Freeman, S. (2012) 'The development of subsidiary roles in the motor vehicle manufacturing industry', International Business Review, vol. 21, no. 4, pp. 602-617.
Conlon, R. and Perkins, J. (2018) 'Wheels and deals: The automotive industry in twentieth-century Australia', Routledge.
Ray, S. and Das, S. (2009) 'Corporate Reporting Framework (CRF): Benchmarking Tata Motors against AB Volvo and Exploring Future Challenges.', Decision (0304-0941), vol. 36, no. 1.
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