Executive Summary
The automobile industry has faced many transformations for the last fifty years and this transformation has led to the change of supply chain used. This evolution has produced stylish and expensive motor vehicles like the sedan. One of the characteristic of sedan is the ability of transformations and agility that has made the vehicle among the most luxurious vehicles in the world. A number of factors are considered to affect the supply and demand of the vehicle in the market. Some of the factors that are considered influential in the supply and demand is the economic purchasing power of the people of the world, the massive economic growth being experienced worldwide, consumer preferences such as styles, reliability, performance and brand name, government policy such as tax and environmental regulations.
The vehicle has had many changes for the last twenty years which has made it among the most luxurious vehicle in the world. This car is having a lot of changes in the form of transformation, technological changes which includes intercooler system. These technological changes have helped this company become among the best companies in the world.
The new technologies that have been adopted in the sedan car have been due to the demand for improved sedan in terms of fuel use, safety and road worthiness. Environmentalists have also contributed to improved car due to their pressure on the reduction of carbon dioxide and lead. Early 1980’s, this vehicle experienced enormous change in their physical appearance. The vehicle manufactured has been designed in a manner that it relies mostly on electronics rather than the mechanical system that were there earlier. It is a vehicle which has electrical system installed in it. It has electronic sensors and it has sensors that actually monitor the car’s performances.
The personal navigation assistance is used in this vehicle to give direction for the road user to know which road they are on and where they will end to next.
Sales for the motor vehicle have grown drastically after the use of online shopping. The company manufacturing these and joined the e-commerce incentives which have increased their supply chain management. This has led to the growth of the market place to the 6 billion plus people living on earth. Although they are few who can access online shopping, the e- market adapted has made the vehicle supply chain structure change.
Introduction
This report is to provide the supply chain management for the sedan car, a vehicle that operates in the automotive industry worldwide. The report does not cover the whole industry but is considers some informed view of economic issues affecting supply and demand for the car. The report will also further look at the characteristics and strategies used by the car manufacturer in the supply chain management.
Characteristics of Sedan car
The sedan car is one of the few vehicles that are luxurious in the world today. The vehicle has improved in the supply chain because of their characteristics. It is a sport luxury car and it gives the customers a very thrilling experience. “It has TSX of high refinement and it’s reliable. It carries five passengers with 17inch alloy wheels, HID headlights; heated; power adjustable driver and passenger seats with driver memory, leather upholstery, an eight speaker, 360-watt audio system with XM satellite radio and in-dash CD changer, dual – zone automatic climate control; and a sunroof. Antilock brakes, stability control, front-side – impact airbags and side curtain airbags for all out board passengers are also standard. An impressive DVD – based navigation system with voice – activated software is the only option” www.edmunds.com
The vehicle has front wheel drive which relies on 2.4 liter, six cylinder engine and has a high output.
The car has engines with MA5 manual 5- speed gearbox and is a four wheel. It runs on low fuel and has low consumption rate. This makes the vehicle capable of navigating in sports and during snow times. It has a snow controlled mechanics which enables it to navigate the snow period. The vehicle benefits from the characteristics of the Peugeot since most of the features are based on the characteristics of the Peugeot (www.edmunds.com )
Changes In the market
The market for automobile industry has changed drastically for the past ten years. There has been growth in the sales of the car and there is an emerging market for the car. The demand and supply has been on and off but the growth has been increasing due to the changes in innovation and creativity in the motor vehicle. It is common knowledge that the motor vehicle is constantly growing and never before in the world’s history there has been growth in the industry as it is today.
The changes that have been experience din this market in terms of sales growth, introduction of technology and online shops have made the production and marketing of the car interesting. The growth that has been experienced all over the world is of 10% which is quite a substantial increase in sales considering the number of competitors in the market for the similar products. Although there has been economic growth worldwide, the growth in sales cannot be attributed to the economic growth because each region from south Africa, south Korea, south America are coming up with home made cars, meaning that we are expecting the market or the sales to come down but this is not the case.
There is an upward trend, meaning that the trend in revenues and profits for this products in various segments is due to some forces which are beyond the economic growth and these forces can be described as technological embracement of the company is manufacturing and distributing an ultra modern vehicle which withstands changes from other companies. Secondly it can also be attributed to the ability of the company to embrace e-commerce in marketing the car.
The ability of the company to produce and respond to an increasing diverse market segments in short has contributed in the increase in revenues of the company. The vehicle has come in various models which is admirable with different features such as power steering, power seats, cruise control and many other features which has increased efficiency of the car and this is in line with the customers expectations.
Despite adoption of various technologies in the production of this car, there are those factors that assist the company in adopting technological changes that assist in the production of a reliable and high performing vehicle. Such factors are external and cannot be controlled by the company. The only role the company can do is to try to mitigate those factors. These factors include safety of the car and degradation of the environment. The two factors worked towards technological innovation by the company in producing a car that is environmental friendly and has high safety measures.
Changes in supply and demand forces
There have been changes in the supply and demand of this vehicle because of the following factors.
The supply and demand for this car is also affected by the innovation and efficiency of the manufacturer. The manufacturer for the sedan car has become innovative and creative through incorporating various features into the car and it has minimized losses and increased efficiencies. The technology used has become a key role in increasing the profit and reduce several problems which are associated with the company. This means research and development department of the car have been involved mostly in the success of this car.
Manufacturing and distribution of the car in the market would have not been possible had it not been for the design, reengineering and remarketing of the car as a brand product.
The supplier has been able to design and integrate a number of components which has enabled the vehicle to be easily assembled in various parts of the world. The suppliers have also reduced the cost of supply through the integration of the supply chain where they are integrated with the supplier of materials. The raw materials supplier for the manufacture of the vehicle has been localized thus reducing the cost of production for this vehicle.
The other factor that has led to the low cost and high supply of the vehicle is the availability of cheap labor from the Asian market and Africa and this has made the cost of producing the vehicle come down. Unlike early times where manufacturing was expensive due to the cost of labor, it is now cheaper.
Fuel and power have also contributed to the supply of the motor vehicle. Environmentalists have from time to time argued against the use of toxic fuel which destroys the environment and this has led to the company manufacturing the vehicle rethink and produce a vehicle which is environmental friendly thus an ultra modern vehicle.
The other issue is the market. The growing population in the world has led to an increase in the production in the production of the number of vehicles required. However the young energetic generation with an extra disposable income has contributed to the improvement of the motor vehicle so as to cater for their needs. Unlike before, earlier ages, the current youth is interested in the changes in technology. Any vehicle that comes up with technological advancements but with a reasonable price, they will find the market for their motor vehicle.
Another influencer for the sedan car is the government influence. Various governments have imposed taxes on motor vehicles but the sedan car has not been affected by this because of the ability to adhere to the government’s regulations in their areas of operation. This policies have succeeded in kicking out some industry players from the market but the manufacturer of the sedan car is finding it enjoyable to negotiate and work anywhere in the world.
The company that manufactures the sedan car is practicing economies of scale which ahs contributed to the growth in supply. Everywhere they go, they localize through creating assembly functions and instead of a whole vehicle being delivered to a specific country, parts are delivered. That is to reduce the cost of the vehicle. These acquired advantages which are as a result in external economies of scale exerts a major influence in supply. They are attracted to various markets and create up an assembling industry due to the following reasons; availability of cheap labor like Indonesia, availability of trained manpower e.g. India and Indonesia, and availability of the market for the goods in the economy and the surrounding.
There are many factors that influence the demand for the motor vehicle. These factors include customer preferences. Customer preferences determine the type of vehicle that will be sold in the market, e.g. the customer may need a stylish reliable and high performing vehicle which is easily usable.
Another factor which contributes to the demand for vehicle is the durability and sleekness of the vehicle. A vehicle which is sleek and has original equipments is getting large demand from the market. It does not matter the price the sedan vehicle has surpassed other vehicle sin terms of demand. And this demand has been growing at a very fast rate in the last 10-20 years. Being a sports car and very few companies are giving competition to the manufacturer the demand has been growing. To keep with pace of competition, the car has managed to beat competition by manufacturing a light car that navigates the road easily.
Never before in the world’s history has wealth increased at a higher rate than today. There is too much wealth in the hands of the world’s population and this wealth has influenced the demand for motor vehicles. Specifically, the sports car, which is associated with young and energetic population.
There is also the availability of substitutes for the motor vehicle. There are many vehicles performing many functions as those of the sedan vehicle and changes in their prices always affect the price of sedan. If the price does not change when things change, then the motor vehicle will lose the market.
Economic performance of the market is another factor that determines the demand for the sedan car. At the moment the United States is facing a downturn in the economy which reduces the demand for the sedan car. United States being the largest market, the performance of the vehicle is affected.
The demand curve shows the changes in prices and demand of the car when there is a change in the factor of production. If the price of a substitute comes down, the demand for the sedan car will come down. This is because the other car will be on high demand as compared to sedan. If the cost of production goes up, the price of the car will go up thus reducing demand for the same. In this case, we can say the demand for the sedan car is relatively inelastic and the changes in the demand for the same will be a response to a change in price. If the price of the car is changed, there will be a less proportionate change in the quantity demanded. This is because the car is a luxury.
Uses of the sedan car
There are many uses that are made for the car, among them are sports. Sports i.e. car rally is a popular sport for motor vehicle manufacturers and other sport lovers. The sedan vehicle has participated in the motor vehicle rallies for a number of years and is one of the best rally cars that are loved by rally drivers. The vehicle has been used in various rallies including the Dakar rally, the Argentina rally and many others in Europe. It has been performing well and most drivers in rally love the vehicle naturally.
This has been possible due to the innovation adapted by the company. Most rally drivers have liked the features of the car and there is a term in most rallies those cars with similar features to those exhibited by the car.
Another use that is made use of in the sedan car is family outings. A sedan car like an ordinary car is made use by families, businessmen and other business executives for the purposes of executing businesses within their places of work. It is a common phenomenon to find business executives using the sedan car to go to places of work.
It is also used for travelling long distances for family members those wishing to travel. It is a stable car that withstands long distances and is able to be maintained easily. Apart from being used for family travelling and sports, it is also used for regular normal business transactions where the owner of the vehicle goes to business meetings using the car.
Also, it is made use in business area as taxis. There are customers who value the type of car that moves them from one area to another. Such customers find it fun and good to use services of a taxi that operates sedan. In countries like Spain, Kenya, and Indonesia, it is easier to come across the sedan car being used as taxi. This is the nature of business in those areas.
Conclusion
With the advent of e-commerce, the construction of online shops has made the manufacturer and distribution of the sedan car easy and cheap. The vehicle is delivered to the customer in need of it in some parts of the world. If the customer is based in Indonesia, then he will only need to communicate through the web, pay using PayPal or any other means and the vehicle will be delivered within a reasonable period.
With the features that are exhibited by the car, it has become common for the car, i.e. sedan car to be a love for many.
References
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Stephenson, J. W. (2007). Operations Management: International Student Edition with Global Reading (9th edition). Irwin: McGraw-Hill. Web.
William J. O’Brien,1 Kerry London2 and Ruben Vrijhoef (2002) construction supply chain modeling: a research review and interdisciplinary research agenda.