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Supply Chain

I. Introduction
The objective of this project is to provide an overview of the major trends taking place in
the automotive industry across the world, with an emphasis on the Indian market
Many influential factors affect decisions made in the automotive world. Consumer
preferences determine the current styles, reliability, and performance standards of vehicles.
Government trade, safety, and environmental regulations establish incentives and requirements
for modernization and change in design or production. Competitive rivalries and corporate
strategies provide equally important impetus for research, design innovations, and changes in
the manufacturing process. All automakers are constantly under pressure to identify consumer
preferences, national biases, and new market segments where they can sell vehicles and gain
market share. Their ability to be flexible enough to quickly respond to all these pressures is
determining their future in the industry. The implications of these factors are vast and propagate
along the supply chain of the automakers. In the following paragraphs, we review some of these
critical issues and how they might affect the industry.
One of the major competitive factors is the pattern of demand for new cars. In any of the
Triad regions (Western Europe, Japan, and United States [US]) original equipment manufacturers
(OEMs) have been facing a mature market for the past 10 years, with stagnant demand, product
proliferation, and stiff price competition. The demand for new cars has been growing on average
less than 1 percent percent a year during the past 10 years and this trend is forecast to continue.
This situation is particularly sensitive in the US market, where growth in the number of new
cars sold has been virtually zero, and it has not been more acute because of the growing market
share of the high-margin sport utility vehicles (SUVs).
A flat demand is aggravated by increased competition in the product market. During the...