What Are the Critical Success Factors in the Automobile Industry?

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What are the critical success factors in the automobile industry?

Critical success factors (CSF) refer to an element of organizational activity which is important for future success. They can be factors identified in areas such as production processes, techniques, technologies.

The automobile industry was affected by the 2008 financial crisis, in the US sale of cars fell from 15 million in 2000 to 9 million in 2009 resulting in corporate restructuring and financial assistance.

Within this industry there are 20 million people employed from production through to the servicing of vehicles. The industry consumes half of the world’s oil and rubber, twenty-five percent of its glass and fifteen percent of steel. It is a competitive, producer driven industry, and there are new and emerging industries such as China, India and South Korea. Production is strongest in Japan, China, Germany, the US, South Korea, Brazil and France.

Growth in the Japanese and Chinese industries was cause for concern in Europe and North America where production has declined. In addition production is also increasing in developing countries such as Brazil, Russia, India, Mexico.

During the 1970s and 80s Japan emerged as the leading producer of automobiles severely affecting production in the US and Europe. Presently automobile sales in China are now the ‘largest automobile market in the world’.

The decline is a cause for concern in mature markets, as there are ‘structural characteristics’ that limit future growth in sales, also the market is more ‘fragmented’ and ‘segmented’. Demand and consumption is what drive automobile sales, and there have been major changes in how and where vehicles are manufactured.

In order to survive several CSF has been highlighted by Dicken (2011).

Technological Success Factors

Change resulting in a shift from mass production to lean production saw changes in the ‘architecture of vehicles’ and the use of ‘shared platforms between different...