Automotive Industry Analysis
The five forces model helps determine the competitive nature of an industry, including its quality and the level of competition. The automotive industry is highly competitive, with companies constantly striving to create better automobiles than competitors. In fact, companies in the automotive industry spent $99.8 billion on research and development (R&D) in 2018. This means that new entrants would have a difficult time gaining market share in this highly competitive industry. Another factor that makes this industry so competitive is customer loyalty.
Growth stage
The automotive industry is experiencing transformations that have not been seen since the early Model T Ford. As new technologies and regulations take hold, traditional automotive OEMs are spending more money to address these trends. Interested investors have already spent between $115 and $200 billion on electric vehicles and automotive hardware since 2010.
A key driver of this change is the increase in vehicle connectivity. As …
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