IRS Logo
Print - Click this link to Print this page

Motor Vehicle Industry Overview - Trends - June 2004

LMSB-04-0507-043
Affected IRM: X.XX.X

"This document is not an official pronouncement of the law or the position of the Service and cannot be used, or cited, or relied upon as such."

Trends

Manufacturers/Distributors

Globalization is key to the continued success of the industry.

  • Manufacturers will continue to partner with suppliers and increasingly require suppliers to finance and engineer new products.
  • Manufacturers will focus on innovation and increase emphasis on swift transitions from idea to completion.
    • Computer assisted design facilitates this process.
  • The growing use of the Internet will speed up the production cycle and bring new products to market faster.
  • Manufacturers and distributors will provide an Internet based system to allow customers to custom order vehicles directly from the manufacturer.
  • Manufacturers are experimenting selling cars directly to customers using the internet and ebay, the internet auction company.
  • Manufacturers are expanding operations and sales in China.

Suppliers

  • Mergers, consolidations, global competition, and severe price pressures from customers will continue to drive the industry. 
  • Record production and declining profitability is expected as manufacturers continue to push suppliers for price reductions.
  • Restructuring of the supplier base is expected to continue as companies seek optimum size to meet customers increasing demands. 
  • Original equipment manufacturers (OEM) will continue to shift design and warranty responsibilities to suppliers.
  • “Business to Business” (BtoB) e-commerce will change the way components and materials are bought and sold.

Dealerships

  • Manufacturers and distributors will continue to redefine, reduce, and relocate their dealership body.
  • Manufacturers and distributors will continue to test direct sales to consumers with delivery at a local dealership.
  • Superstores and publicly traded dealership groups will continue to be a factor in the industry.
  • Buyers will increasingly use the Internet to gather information prior to contacting a dealership.
  • Internet vehicle purchases will become a substitute to the traditional dealership purchase for some buyers.
  • The Internet will continue to influence the way parts are bought and sold at the dealership level.

Chapter 2 | Table of Contents | Chapter 4

Page Last Reviewed or Updated: 27-Nov-2013