| dc.description.abstract | The car and housing markets have always been the leading economic indicators in Taiwan. In particularly, the automotive industry has always played an important role in the national economy, as both its upstream suppliers and downstream sellers make significant contributions to the country’s economic growth and employment. However, as the global automotive industry starts to experience the dramatic changes in recent years, various well-known car manufacturers are now entering strategic alliance, or merging or restructuring to reduce their cost and increase their competitiveness. Taiwan, with the joining of WTO and the opening up of the cross-strait policies, has faced more and more intense competition environment, which expedites the operation of automotive industry to also change. In light of this, how Taiwanese automobile companies should redefine its value chain, and propose a suitable operation strategy to gain a competitive advantage is going to be the purpose of this paper.
Owing to the worldwide economic impact, the sales trend of Taiwan automotive industry is basically the same as the global market. It reached a peak in 2007, but with the Lehman Brothers financial crisis in 2008, it slumped dramatically. Every economic body did attempt to improve the situation from 2009 to 2010, however, the Eurozone crisis in 2010 further worsen the world economy and led the automotive industry into a plight. The automakers are now facing up to the new changing environment, and as a result of these, come about the formation of new value chain of car sales.
This paper, through the case study of Y company on the changing of the automotive industry value chain, has come to the following conclusions: (1) Dropping gross profit on car sales: car dealers cannot make a profit or break even just by selling cars anymore. (2) Changing car buying preferences: buyers are now looking for fuel-efficient and compact cars. The market trend is now towards either low-priced fuel-efficient cars or high-priced luxury cars. (3) The income on car insurance under rate deregulation has not been affected by the downturn in the car market, instead, it has grown. (4) Growing level of awareness on car insurance. (5) The slowdown in economic growth has brought about increasing demand for car loans. (6) As automakers are offering extended warranties and increasing insurance coverage, more customers are willing to return to the service centers. Making the revenue made in this area to be higher than car sales. (7) Rising level of customers satisfaction standards on services. (8) Used car market has grown big enough to supply the demand for operating profit of the car manufacturers.
These results show that the profit-making point of the old value chain is shifting. How to increase sales from other business units is where the automotive industry should focus on. For the future development of Taiwan automotive industry, this paper suggests the followings: (1) Combine marketing strategies for both selling and servicing. (2) Provide a complete sales service (total solution). (3) Actively develop push marketing strategies for trade-ins. (4) Actively promote Toyota hybrid cars to ensure the implementation of environmentally friendly practices. (5) Increase insurance sales by establishing customer relationships through network system. (6) Take a proactive approach to after-sales service. (7) Create a benefit cycle of used car value chain. | en_US |