With a few manufacturers of automobiles already being in function in Australia, the competition in the automotive industry has rapidly increased over the years. Manufacturers like Ford, GM, Mitsubishi and Toyota have been spending heavily on research & development to come up with newer models in the market which has resulted in competitive rivalry. Furthermore the prices of the automobiles have been so competitive in the market due to which customers are left in middle of making choices of which automobile maker they should consider in purchasing a vehicle (Levine, 2001, p.210).
The competitive environment prevailing in Australian vehicle manufacturing has altered significantly. Numerous factors stand out as having contributed to a major shift in the competitive balance between imported and locally manufactured vehicles and the competitiveness of Australian automotive exports:
- Exchange rate appreciation: The continuous appreciation of the Australian dollar against other key currencies, in particular the United States dollar and the Japanese yen, in response to strong international demand for Australian resources, has increased the competitive pressure on other sectors, including automotive manufacturing.
- Changing market segmentation: Consumer buying patterns have undergone significant changes, reflecting the impact of rising fuel prices, the introduction of new brands and products across a range of market segments and changing patterns of vehicle specification and affordability.
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