Car Manufacturing Costs Rise as Players Continue to Consolidate: Apple and Google Now Pose a Serious Threat to Manufacturers

The cost of manufacturing cars has been on the rise in recent years as rising commodity prices coupled with increased protectionism is making the acquisition of key raw materials more expensive. On top of this the impending arrival of Google and Apple will further strengthen rivalry in the industry.

Scope

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Table of Contents

Table of Contents

Overview 2

Catalyst 2

Summary 2

Rising commodity costs and protectionism make car manufacturing more expensive 6

Eco-Friendly legislation boosting demand for pricier aluminum as players bid to reduce car weight and emissions 6

Growth in electric cars strengthens demand for increasingly expensive commodities like Cobalt and Lithium 7

Protectionism resulting in players paying more for key manufacturing components like steel 8

Players responding to rising costs by entering partnerships and introducing robots 10

Consolidation in the industry intensifies as manufacturing costs continue to rise 10

Joint ventures with Asian partners will intensify as demand for cars in West stagnates 11

Robots taking over as labor becomes increasingly scarce 12

Cooperation between car manufacturers and tech companies will grow 13

Threat of tech giants Apple and Google forces players to adapt 13

Strong financial power of tech giants will result in further consolidation 14

Conclusions 15

Consolidation in the car manufacturing industry to continue 15

Arrival of tech giants coupled with rising manufacturing costs intensifies rivalry in the industry 15

Appendix 16

Sources 16

Further Reading 17

Ask the analyst 18

About MarketLine 18

Disclaimer 18

List of Tables

List of Tables

Table 1: Car manufacturers and tech giants ranked in terms of Cash from Operating Activities, $ millions, 2017 14

List of Figures

List of Figures

Figure 1: Global price of aluminum and price of hard rolled steel bands in the USA and Western Europe, $ per metric ton, 2013-2018 7

Figure 2: Global price of Cobalt and Lithium in $ per metric ton, 2013-2018 8

Figure 3: US steel imports percentage by country, 2017 9

Figure 4: Saic-GM an example of a successful joint venture between a global and local player 11

Figure 5: One of the potential designs of Apple”˜s iCar 13

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