It identifies all the key strengths, weaknesses, opportunities and threats that affect the company the most. Latest Updates China category Hong Kong police As more countries are open to the automobile industry the market will keep on expanding and developing. Despite the rapid growth in its market capitalization, Tesla is not as profitable as the other automobile brands, It has been running its business in losses for the past several years. Emerging markets will be the primary growth drivers for a long time to come, and hence fuel-efficient cars are the need of the hour. These cars' maintenance costs are very low because of the lower number of parts used inside them, which more than makes up for the one-time purchasing costs. Toyotas brand and recognition provides the company with a competitive edge over competitors as few other automotive brands are so well-known and reputable. Furthermore, attracting and retaining employees in the automotive industry can be very challenging, especially in the case where competitors are doing what they can to lure the best talent. Apart from these things, Tesla cars are loaded with technology. The external factors that limit or reduce Teslas organizational performance are covered in this aspect of the SWOT analysis. Corporate executives have strong influence and control on various aspects of the multinational business, including the sales and distribution of electric vehicles. Emerging markets will be the primary growth drivers for a long time to come, and hence fuel-efficient cars are the need of the hour. [7], In 2018 alone, the company has received 7 IIHS (Insurance Institute for Highway Safety) Top Safety Picks 2018 awards (more than any other automotive company) for its Toyota Corolla, Prius, Camry, Avalon, Highlander and RAV4 vehicle models as well as 4 other Top Safety awards for Lexus models. This simply doesnt mean outsourcing risks - or that a company's responsibility ends once the product is sold. Furthermore, other markets are also likely to emerge soon. But as electronic content is increasing companies need to think out of their traditional way to make more profit out of it. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats . Now, a customer has got a lot of options to choose from, and it has given the power to the customers to purchase whatever they like. Such insights can inform and guide corporate governance and management to ensure the growth of the automotive business. The future is full of opportunities for Tesla, and the company must see a sharp growth in profitability in the coming years. Many customers often contact us with requests for custom business/market specific SWOTs, because they trust us. Its shares climbed very fast in August 2020, making Tesla the seventh-largest US-based company for a short period. In terms of pricing, the companys electric vehicles are relatively more expensive than competing cars, especially those that have internal combustion engines. The pandemic has led to a sharp decline in automobile sales worldwide. High employee turnover: The employee turnover in the automobile industry is found to be higher when compared to several other sectors. The March 2020 numbers show the effect of lockdown due to the COVID-19 pandemic. It makes only Electrical vehicles and that too for the higher end market. If Tesla can grow its supercharger infrastructure simultaneously in the other regions, its sales will grow even faster. While it sold fewer cars in the first and second quarters of 2020 compared to the previous year, sales surged again in the third quarter of 2020 compared to the same period in the previous year. Several leading brands have felt a bitter impact of the pandemic on automobiles' sales throughout the world. Yet it is undoubtedly a symbol of progress and innovation, despite the negative factors. Some of the main brands in the automobile industry are; Today, well discuss the swot analysis of the automobile industry. Availability of a considerable number of variants, stiff competition between them, and a long list of alternatives to choose from has given power to customers to decide whatever they like. The SWOT analysis model views this internal strategic factor a strength that empowers the company to develop competitive and profitable products for the electric car market. One of the main factors driving fast growth in popularity and sales of Tesla cars is the companys focus on technological innovation. For example, in 2019 India became the 4th largest automobile market in the world, surpassing Germany in terms of sales. The following opportunities are notable in this SWOT analysis of Tesla Inc.: Tesla has the opportunity for global sales expansion. Apart from zero-emission of their vehicles and their superior battery range, they are also among the safest and require nearly no maintenance than the other vehicles. But with the uncertain world and future, it can be thought of as a potential threat. You can find more information about the business in Toyotas official website or Wikipedias article. The company withstands pressure from competing automakers like General Motors, Toyota, Ford, Nissan, Honda, Bavarian Motor Works (BMW), and Volkswagen. Tesla cars are also enjoying superior safety ratings overall. Automotive companies still have a long way to become fully sustainable and efficient modes of transportation. Recalled cars: Because of many domestic reasons such as technical dysfunctionality or non-abidance to government-led rules many vehicles are being recalled. Were the No.1 source for both free and paid SWOT analyses on the web. Tesla also has the opportunity to expand its supply chain to support the global expansion of production and sales operations. Brand recognition helps the company to introduce new products to the market more easily and with fewer costs. Its model S can drive roughly 370 miles without stopping for a charge. Government regulations: Regulations like excise duty, no entry of outside vehicles in the state, decreasing number of validity of registration period, and volatility in the fuel prices pose considerable challenges to automobile companies. Constant product innovation & technological advancement: With the advent of E-vehicles & alternative fuel such as Shell gas, CNG, and others, automobile companies are increasing R&D expenditure to drive the next phase of growth through the use of renewable sources of energy which may be solar, wind, etc. Automotive Sunroof Market Growth & Overview: The Automotive Sunroof Market Growth research includes a comprehensive analysis of the worldwide market as well as a SWOT analysis of the industry's top competitors. Korean automakers Hyundai and Kia are both present in the US, Europe, and Asia. The car industry has been a roller coaster of highs and lows over the last forty years. These factors are weaknesses that can reduce competitiveness and slow the growth of the automotive firm. Privacy & Cookie Notice. See our Privacy Policy page to find out more about cookies or to switch them off. R & D has become a necessity for them because they cant launch new features and models without it. 2020: Tesla became the most valuable automotive company in the world by surpassing its competitors. Tesla cars are great in terms of product quality, design, performance, and passenger safety. Unlike the other cars on the roads, these cars rely on Teslas own charging infrastructure, without which they cannot play on the roads. The largest US automaker, General Motors, has been having financial difficulties lately. Public transport, bikes, vehicles, and cars fall under the category of automobiles, and they play a significant role in the development of any society along with the transport infrastructure. This external factor involves establishing or acquiring new businesses with operations outside the companys current business of electric automobiles, batteries, and solar energy products. Growth through diversification is another opportunity relevant to this SWOT analysis of Tesla Inc. Slow Economy: Many economic situations such as sudden unemployment, the pandemic (recent covid-19 situation), etc. The dependent growth rate: As many derivatives such as the validity of the registration period, no entrance for outside vehicles, and fuel prices are in the hand of the government, it always affects the growth of the industry. Also, big companies like Harley, Volvo, Bharat Benz, etc are making manufacturing facilities in Asian countries because of their high resource and cheap workforce which is also one of the reasons for the growing Asian market. All Rights Reserved. Volkswagen is a well-known brand with a strong presence in Europe. The analytical technique of SWOT analysis helps companies to determine and define several critical characteristics:Strengths, Weaknesses, Opportunities, and Threats SWOT analysis. The method is often used at the start of or as part of a strategic planning exercise. The company will need to expand its production capacity to meet popular demand. It allows people an unimaginable lifestyle with luxury, freedom, and travel. Innovation and advancement: R&D investment by automakers is driven by consumer demands. These procurement trends include technology changes, novel strategic approaches, new processes, and necessary adaptations to change. Two limitations of the PESTEL tool acknowledged by Krol (2020) were that it is mainly a qualitative process that does not have underlying quantitative support and, as The strategic alliance in the form of acquisitions and mergers among automotive companies would create a favorable business environment. Teslas strategic management must overcome the following weaknesses relevant to this SWOT analysis: Tesla Inc. suffers from limited market presence. It has also increased the sales of cars and vehicles and the growth in the industry is good for the business. Due to that, it has some additional advantages compared to the other car brands in the world. High fixed cost and investment in R&D: Because of an overly competitive market, companies are trying to invest more in R & D centers. With this SWOT analysis, each of the Automobile Industrys strengths, weaknesses, possibilities, and threats on the market was emphasized by their company. Our May and November analyses are below. Over the last few months, the auto industry has shown tremendous resilience. From the economic depths experienced in spring 2020, it has rebounded to deliver year-over-year growth in new-vehicle sales over the last few months across China, Europe, and the US. Rising competition: Presence of a large number of players in the automobile industry results in intense competition and companies eating into others share, leaving little scope for new players. Automobile Industry needs to take vigorous action in order to increase its market share and financial stability. 2. Since Tesla introduced the Model 3 in the third quarter of 2017, its sales have continued to soar. On the other hand, strong control on business processes is an internal factor that functions as one of Teslas strengths, based on the SWOT analysis framework. The automobile industry includes two-wheeler, four-wheeler, passenger vehicle and commercial vehicles. However, the subsidies on Teslas Model 3 could be expiring soon, and that could cause a decline in sales. Toyotas R&D initiatives, especially in producing environmentally friendly vehicle technologies, vehicle safety and information technology, provide it with some of the best strategic advantages. OEM (original equipment manufacturer) should consider working with experts and manufacturers of the other industries. First off in the automobile industry SWOT analysis we should analyze the strength of the Automobile Industry. In evaluating Tesla, an analysis of SWOT factors (strengths, weaknesses, opportunities, threats) provides insights on how the business can approach challenges in the industry. Expand or add to existing operations in foreign markets to exploit the growth of global demand for electric vehicles and renewable energy solutions. Despite Teslas advantage because of its sustainable business model, taxes, and other regulatory threats like those related to self-driving car models will continue to trouble the brand. It achieved a good performance in all six IIHS crash tests. are the economic factors which will daunt the automobile industry for an extended period. Full-year sales in the world's biggest auto market fell 1.9% to 25.3 million vehicles in 2020, the data showed. In this business analysis context, weaknesses are issues that the company must overcome through strategies, reforms, and initiatives that employ its strengths and make use of the opportunities in the transportation sector. The company also provides regular software updates for its cars. For the past several years, these countries have seen impressive economic growth. This aspect of the SWOT analysis of Tesla Inc. deals with the business strengths that contribute to organizational growth and improvement. After an in-depth study of the swot analysis of the automobile industry, weve concluded that the automobile industry is indeed the worlds most profitable industry. However, the demands of the emerging markets are a bit different, and they want VFM (value for money) vehicle. Benzaghta, M. A., Elwalda, A., Mousa, M. M., Erkan, I., & Rahman, M. (2021). Teslas management can expect better performance and resilience in the global market for electric automobiles and energy solutions upon addressing the SWOT factors identified in this analysis. Its supercharger network supports its sales of cars in all the leading markets. As the world enters the challenging post-COVID era, and companies struggle to recover from the massive fluctuations within the market, industries continue to grow and change as time passes. For any company, it is crucial to focus on its shortcomings. Alliances: With emerging competition among companies this could bring out a better solution to grow mutually. Not since Henry Ford perfected his first production line in search of a faster horse has the automotive industry faced such sweeping change. Ultimately it impacts the sale of the company. This SWOT analysis shows that Tesla has the potential to grow in the global automotive market despite aggressive competition. Tesla has also partnered with various other businesses including Hilton Hotels to establish its destination charger network throughout the United States and other markets. According to Counterpoint Research, Tesla accounted for around 23% of EV sales in China in June 2020. 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