The document discusses the global automobile industry and the impact of global distribution of production facilities. It notes that automobile production began in the late 1800s in Western Europe and the US. Global leaders in automobile sales in 2013 included Volkswagen, Toyota, Daimler, GM and Ford. The automobile industry contributes significantly to the global economy, employing over 8 million people directly and 50 million indirectly. The industry has seen a 30% increase in global production over the past decade, driving economic growth worldwide.

1. Global Automobile Industry
- An impact of global distribution of production facilities on costs and market shares

2.  INTRODUCTION
 Automobile industry is a symbol of technical marvel by human kind. Being one of the fastest growing sectors in
the world its dynamic growth phases are explained by nature of competition, product life cycle and consumer
demand
 The production of automobiles in volume began in the early 1890s, in Western Europe.
 The USA started the production of both electric and gas automobiles by 1896 and in 1903, Ford stepped in. The
price of cars reduced from USD 850 in 1908 to USD 360 in 1916. The great depression and the World Wars saw a
drop in sale; but the 1950s and 1960s were the glorious era for automobiles (driven by Ford, GM and Chrysler)
producing 11 million units in 1970
 Ford Motor Company's mass-production model from the U.S. to Western Europe and Japan followed both World
Wars I and II. This gives rise to two important trends
1. The advancements in industrialization led to significant increase in the growth and production of the Japanese and
German automotive markets.
2. Due to the oil embargo from 1973 to 1974, the export of fuel efficient cars started from Japan to the U.S.
 The world automobile industry is witnessing an unprecedented scale of change from the 1990

3.  Leaders in Automobile Industry
 According to revenue in FY 2013, the global market leader in
automobile industry are
I. Volkswagen AG (16%)
II. Toyota (13%)
III. Daimler (10%)
IV. GM (9%)
V. Ford (9%)
VI. BMW (6%)
VII. Nissan (6%)
VIII. Honda (6%)
IX. Hyundai (5%)
X. SAIC (5%)
XI. Peugeot SA (4%)
Volkswagen AG
16%
Toyota
13%
Daimler
10%
GM
9%
Ford
9%
BMW
6%
Hyundai
Honda
6%
Nissan
6%
5%
SAIC
5%
PAS
4%
Others
11%
SOURCE: STATISTA 2014

4.  Market shares of Automobile Companies
 According to Market shares of FY 2013, the global market
leader in automobile industry are
I. Toyota Motor Corporation (TM-12%)
II. General Motors Company (GM-12%)
III. Volkswagen AG (VOW-12%)
IV. Hyundai–Kia Group(9%)
V. Renault-Nissan Group(9%)
VI. Ford Motor Company (F-6%)
VII. SAIC Motor Corporation(6%)
VIII. Fiat Chrysler Group(5%)
IX. Honda(4%)
X. Peugeot SA(3%)
Global Automobile Manufacturer Market Shares 2013
Toyota
GM
12%
Volkswagen AG
12%
Hyundai-Kia
9%
Renault-Nissan
9%
Ford
6%
SAIC
6%
Peugeot SA
Honda
Fiat-Chrtsler
5%
3%
Others
Source: Bloomberg

5.  Volkswagen (Sales)
 To study the impact of global distribution of
production facilities we need to understand its effect
on particular region and compare it with the whole
scenario
 The comparison of sales of Volkswagen is shown in
the graph
 The Global sales of Volkswagen is relatively high as
compared to sales in other countries
 The sales in china is the highest as compared to other
two countries
 Analyzing the graph, it can be seen that the Global
sales of Volkswagen has gone double compared to
the total sales of leading countries
Sales 2013
Globally US Japan China
12000000
10000000
8000000
6000000
4000000
2000000
0
Sales 9700000 611700 67282 3270000
Source: Wall street Journal & JADA

6.  Volkswagen (Revenue)
 The revenue of Volkswagen for the FY 2013 is shown
in the graph
 The total revenue for FY 2013 is € 197 billion
 The total is revenue divided into 4 regions from
which the Europe and other regions Volkswagen has
gained maximum revenue
 For Volkswagen going globally has just not
benefited the sales but has also increased the
revenue
 As Volkswagen being a German company, the
revenue earned contributes a larger portion to
Germany’s national income
197
117.06
27.43
35.02
17.5
0 50 100 150 200 250
South America
North America
Asia-Pacific
Europe/other
Globally
Revenue (in billion euros)
Region
Revenue in FY 2013
Sales
Source: STATISTA

7.  Contribution of Automobile industry in
Economy
o Automobiles are a liberating technology for people around the world. The personal automobile allows people to live, work
and play in ways that were unimaginable a century ago.
Automobiles provide access to markets, to doctors, to jobs.
Nearly every car trip ends with either an economic transaction
or some other benefit to our quality of life.
o Automobiles represent freedom and economic growth
o It has been a representation of a nation’s manufacturing industry
serving the best interests of the nation
o If auto manufacturing were a country, it would be the sixth largest
economy
o In 2011-2012, automobile industry contributed about 0.5% to the
Australian economy including auto parts manufacturing which is $5.4
billion

8.  Automobile Industry- An employer
o The world’s automotive industry made over 66 million cars, vans,
trucks and buses in 2005. These vehicles are essential to the working
of the global economy and to the wellbeing of the world’s citizens.
This level of output is equivalent to a global turnover (gross
revenue) of almost €2 trillion.
o Building sixty-six million vehicles requires the employment of more
than eight million people directly in making the vehicles and the
parts that go into them. This is over five percent of the world’s total
manufacturing employment. In addition to these direct employees,
about five times more are employed indirectly in related
manufacturing and service provision, such that an estimated more
than 50 million people earn their living from cars, trucks, buses and
coaches.
o Automobile industry create jobs, jobs and jobs
Source: OICA

9.  Conclusion
o The global auto industry is a key sector of the economy
for every major country in the world. The industry
continues to grow, registering a 30 percent increase
over the past decade (1995-2005) Source: OICA
o There is also an increase in 30% in the production of
automobile over a decade (2003-2013), which in turn
has not only increased employment but has also
increased the revenue of automobile company
contributing to the economy of various countries
o Thus the automobile industry is the single greatest
engine of economic growth in the world
AUTOMOBILE PRODUCTION
Production Linear (Production)
60663225
87299993
100000000
80000000
60000000
40000000
20000000
0
2003 2013
Source: OICA

10. THANK YOU