Global Commercial And Industrial Scenario - Myassignmenthelp.Com

Question: Discuss about the Global Commercial And Industrial Scenario. Answer: Introduction The global commercial and industrial scenario, over the years, has been subjected to considerable changes and dynamics, with the initially developed countries taking backseat and the new economics gaining predominant positions with their impressive economic growth and prospering industrial sectors (Ozawa 2014). One of such countries, which have consistently shown impressive trends in economic and overall growth, in spite of all the turmoil and hurdles in its path of progress, is that of Japan. With one of the highest growth rates, this market oriented economy ranks third globally, in terms of Nominal GDP and fourth in terms of the purchasing power parity. Much of the economic prosperity and increased standard of living of the country can be attributed to the industrial development of the country in the last few decades. The country has been known for their excellent innovations, technological progress and robust investment trends, which have helped the industrial sectors as well as the overall economy of the country, grow impressively. Of the primary industries, which have grown considerably and has made marks in the international markets, a significant one is the automobile industry of the country (Carlsson 2012). Over the last few decades, the automobile industry in Japan has grown impressively, thereby making the country one of the largest car producing nations in the global scenario. Much of the success and expansion of the automobile industry of the country can be attributed to the presence of continuous innovation, technological progress and cost effectiveness in the production process. The industry has emerged as one of the primary competitors in the global automobile market, giving considerable competitions to other global automobile brands. Keeping this into consideration, the concerned report tries to discuss the current dynamics in the automobile industry of the country and with the help of the existing empirical evidences tries to analyze the level of competitiveness the industry has been able to pertain in the international framework, in the contemporary period. Japanese Automobile Industry Japan ranks among the top three global automobile producers, known for their special and innovative technologies, catering to the demands and requirements of the clientele not only in the country itself but also across different parts of the world. The automotive and vehicle manufacturing industries together not only form a major share of the manufacturing sector of the country, but also consists of one of the most famous exports of the country. Figure 1: Global share of sales of cars by countries (2012) (Source: Kawahara 2012) As can be seen from the above figure, the automobile sector of Japan enjoys almost 6% of the global sales of vehicles after the global giants like that of the USA and China. Of the different vehicle manufacturing brands present in the country, the most popular ones, enjoying a considerable share of domestic as well as international clientele are mainly Toyota, Nissan, Honda, Mazda, Lexus, Mitsubishi and others. Apart from vehicles, the industry of manufacturing automotive components is one of the most flourished industries in the country, with the automotive parts manufactured in the country being used in six continents. The automobile sector of the country is also one of the primary sources of employment with nearly 5.5 million people of the country being employed in the vehicle and automotive related industries, which amounts to nearly 8.7% of the total workforce of the country (Sierzchula et al. 2012). Based on the number of sales, both domestically as well as in the international scenario, the leading vehicle companies of the country are as follows: Figure 2: Sales of the top vehicle brands in Japan (Source: Statista.com, 2018) As can be seen from the above figure the primary vehicle companies of the country, over the years, have been, Toyota, Honda, Nissan, Mazda and Daihatsu, with considerable market shares in domestic as well as international domains. There have been several crucial reasons behind the consistent growth of the industry in Japan, few of which are discussed in the following section of the report. Reasons behind success and expansion of Japanese automobile industry The Japanese automobile industry, in the last few years, has been considered to be one of the most competitive and productive one in the international automobile market, much of which can be attributed to the unique characteristics present in the industry as well as in the economic and regulatory trends in the country. This in their turn has helped in helping the industry of the country gain a positive edge over their international rivals. The primary factors being discussed as follows: a) Steady growth of economic prosperity- One of the primary cause of the expansion and prosperity of the automobile industry of Japan has been the steady increase in the GDP growth of the country, which in turn indicates towards the growing economic prosperity of the economy as a whole, as can be seen from the following figure: Figure 3: Growth of the GDP of Japan over the years (Source:Tradingeconomics.com, 2018) As is eviden from the above figure, the economy of the country as a whole has experienced a robust and consistent increase in the GDP over the last few decades, which indicates towards an overall productive production environment and strong demand in the country (Gao, Hensley and Zielke 2014). This in turn, is expected to cater positively to the growth of different industries in the country, which also includes the automobile industry. b) Increase in the domestic demand for automobiles- With the increase in the income of the population of Japan as a whole, the demand for a better life style also was felt, which in turn catered to the increase in the demand of vehicles in the country. The automobile sector of the country not only experienced an increase in the demand for small and domestic vehicles but also experienced a higher demand for industrial vehicles like trucks. This can be seen from the increase in the number of vehicle registrations in the country, which can be seen from the following figure: Figure 4: Car registrations in Japan over the years (Source: Tradingeconomics.com, 2018) The number of registrations of vehicles in Japan has remained considerably consistent with occasional peaks and troughs. This in turn indicates towards an increase in the domestic demand for vehicles in the country, which can also be considered as one of the primary reasons behind the increase in the expansion of the Japanese automobile industry of the country (Kim 2018). c) Technological innovations- One of the primary advantages which the automobile industry of Japan experiences and which contributes significantly to the competitiveness of the same, keeping them privileged among the other global supply side providers in this industry. Japan, especially in the post war periods of 1955, started experiencing expansions and improvements in the overall manufacturing operational framework, especially in the automobile sector. Much of which can be attributed to the extraordinary technological innovations in the country. Japan has been known for their special ability of constant thriving for innovations, which help them to reduce their cost of production in general. In case of the automobile industry, Japan has always remained in the forefront and trendsetter in the aspects of implementations of digital technologies in the production line management. This in turn, has contributed immensely in making their vehicles cost efficient as well as well equipped with facilities, which costs higher in other countries (Wardsauto.com, 2018). d) Catering to customer demands- The automobile manufacturing industry of Japan is known for their innovations, which not only contributes in reducing the cost of production of the same and makes the cars budget friendly, but also for the features in these cars which increases the level of convenience of the customers. Japanese cars known for their technological superiority, utility, cost effectiveness, durability and customer satisfaction, which make them more demanded in comparison of the pricey, ornate but less feature equipped vehicles. Figure 5: Export share of automobile sectors in different countries (Source: McCarthy, 2018) The ability of the Japanese automobile industry to cater to the demands of the customers across the world made it one of the top most exporters of vehicles in the international scenario after Germany in the last decade. e) Supportive infrastructure- The government of Japan has always been supportive to increasing expansion of the activities in the industrial sectors of the country. Along with the presence of infrastructures, facilitating inflow of ideas and innovations, the government regulations and productive investment structure benefits the overall industrial growth in the country, the automobile industry not being any exception. f) Environmental awareness- The automobile industry of Japan has been identified to be one addressing the environmental issues of concern, which includes the issues of high carbon emissions, emission of CFCs, trichloroethane and others from fuel consumption by the automobiles. Keeping these issues in consideration, the automobile manufacturers of the country constantly implements measures and innovations to make their vehicles fuel efficient and to produce new vehicles running on electricity (Yabe et al. 2012). Vehicle recycling and recycling within the manufacturing process are also implemented in the Japanese automobile industry. g) Exports market- Japan, over the last decade has experienced immense expansion in the share of markets outside the domestic boundaries of the country. The cost efficiency, budget friendliness, fuel efficiency and higher utility of their cars have helped the manufacturers to acquire higher market share in the international market, thereby giving them a competitive edge over the rival companies in other countries, which can be seen from the following figure: As can be from the above figure, the demand for global exports of Japanese vehicles, which fell drastically in 2010, owing to the overall crisis period in Japan and global economy at that point of time, however, increased considerably and regained back its strength. Much of which can be attributed to the strong alliance of the automobile industry of the country with the other leading economies in the world like that of the USA and the UK. The industry has experienced rapid increase in demands for their products, over the last few years, in the USA and in the newly emerging markets of the Middle East, much of which can be due to the presence of a weaker local currency, thereby making the Japanese vehicles cheaper for the foreign importers. Recent trends in Japanese automobile industry The growth trends of the automobile industry of Japan, which had been growing in the last decades, owing to increase in the production as well as exports of the same in the international markets, have been seen to be facing stagnation to some extent in the recent period, as can be seen from the following figure: The above figure makes it evident that the global share of motor vehicle production of Japan, which had consistently maintained a standard trend in the past decade (till 2005), has been experiencing a negative dynamics, as can be seen from the falling rate of production, after 2005. The primary reason behind the fall in the competitiveness of the automobile industry of the country can be expected to be the increase in the demand for the automobiles produced by the Chinese manufacturers (Cnbc.com, 2018). In the recent period, with the aspects of environmental pollution and carbon emission becoming global issue of concern, the international automobile industry shifting towards the production of cars driven by electricity and other renewable resources. The automobile industry of Japan has also been seen to shift their production in this aspect (Law 2017). However, the automobile industry of the country is seen to be lagging behind other countries in terms of the exports and productions of vehicles driven by electricity as can be seen from the following figure: Japan lies much below other countries like Norway, China, UK and others in terms of electric vehicle market. The export markets of the top most vehicle brands in Japan has also been seen to be reaching a saturation level, especially in its primary client countries like the USA. Conclusion From the above discussion, it can be concluded that the automobile industry of Japan, which had experienced impressive growth in the last decades, has been facing stagnation to some extent in the current scenario with more competing companies coming in the supply side of the global automobile industry. This has in its turn decreased the competitiveness of the Japanese automobile industry to some extent, especially in terms of the new genre of automobiles and also in terms of saturation in the global markets. Keeping this into consideration, the automobile industry of Japan has to incorporate relevant changes and modifications to suit the recent trends of global demand as well as to keep an edge over the competitors in other countries. References Carlsson, B. ed., 2012.Technological systems and economic performance: the case of factory automation(Vol. 5). Springer Science Business Media. Cnbc.com (2018).Slowing US auto sales prompts Japanese automakers to rethink discounts. 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