This competition makes car pricing very competitive. Manufacturers now only receive slim profits per vehicle whereas before, they were able to gain high profits. The life cycle of the car also has been shortened due to Japanese manufacturers, who only allow around 4 years of life cycle for each model. European and US manufacturers have followed this trend. They have reduced their product's life cycle from around 10 years to 5 years on average.
Automobile manufacturers face risk that is related to the automobile.
They should consider the risk they will face in order to be very competitive. In the next pages, we will discuss several aspects of risk in the automobile industry. Risk In Selling Automobiles. Automobile Industry's Workers. Back to the College of Business.