Companies are investing heavily in Research &. Development. US, UK, Europe, etc are the biggest automobile markets in the world. But the recent recession has shown the big losses being faced by auto majors in these countries due to the absence of sufficient demand. Companies like Toyota, which had not continuous profits for the past many decades have reported losses during this period. But even at this critical time, it was the Asian market that helped the automobile companies to cushion the big losses. When inventories were piled up in developed countries, Asia was reporting tremendous growth in the sales figures. This shows the potential of the largest continent as the largest automobile market. This essay is intended to analyze the major drivers of the automobile industry. The small car market is one of the most flourishing in the auto sector. This essay will discuss the major drivers of the small car market and its future prospects.
In recent years, it is seen that Asia is emerging as a big market for automobiles, especially small cars. US and UK were the well known small car markets in the world. Now the wind is in the Asian market. China and India, two of the fastest-growing countries in Asia, marks the high growth of small car markets in Asia. The Middle East is also a high potential market. But the recent crisis had cast some shade on the growth of the segment.
This part of the essay makes an analysis of the critical factors by using the Impact Model. The PEST analysis of the Asian car industry has shown that the market is driven by several critical factors. In order to be successful in this market, auto manufacturers will have to consider the impact of these factors properly. The critical factors are GDP, fuel efficiency, lower emissions, value, and safety. The impact of these critical factors on the industry is discussed below.