Industry Analysis & Industry Trends
Soaring fuel prices sent Britons away from fuel-inefficient, petrol-run cars and towards smaller diesel-run vehicles. The consumer shift damaged manufacturers, as the majority of cars produced are the more traditional and less fuel-efficient vehicles. However, this trend alone does not explain the 23.6% fall in industry revenue over 2009-10. The main culprit for this disastrous performance was the recession. When the financial crisis hit, business and consumer confidence plummeted. Sales to businesses and individuals plunged as customers became more wary of unnecessary spending. The government's scrappage incentive scheme encouraged some new car sales, but it was not enough to offset the severe demand decline... purchase to read more
Industry Report - Industry Investment Chapter
Motor vehicles are produced at large manufacturing plants, which require a significant amount of capital to set up and carry substantial depreciation costs. The production process is highly automated and on a large scale so that companies can benefit from lower average costs. As a result, labour is relatively less significant in the industry. Employees are still needed at some stages of assembly though. Some segments, such as engine rebuilding, are more labour-intensive than other segments.
The industry is capital intensive with companies needing to employ just £1.7 of labour for every £1.0 invested in new capital... purchase to read more