Autonomous Cars Inc.
Introduction
Autonomous Cars Inc. is a startup motor vehicle manufacturing firm that specializes in automated or driverless cars. The firm intends to be the first to launch this type of vehicle and will, therefore, need to invest heavily in awareness creation and advertisement. In an industry characterized by renowned firms and established brands, it will be crucial to convince potential buyers to try out the novel vehicle. Moreover, the firm’s pricing mechanism must emphasize recouping of profits before other players introduce similar products, with the firm distributing its products from the manufacturing unit.
Organizations’ Background
Autonomous Cars Inc. was launched in the year 2015 in the City of Boston, Massachusetts. The rationale behind this company was the increasing demand in automated vehicles. Autonomous cars are the latest innovation in the motor vehicle industry. As expected, they face stiff competition from conventional cars. However, the company is encouraged by the fact that nations such as the USA, the UK, France and Switzerland have allowed research, manufacturing and testing of these vehicles.
Autonomous Cars’ will manufacture respective vehicles for the domestic market. This is because these cars are believed to be safer to drive. The increasing global awareness on the need to reduce environmental pollution and curtail the use of fossil fuels will work to the advantage of this firm.
The Industry
The automotive industry is lucrative considering cars are no longer luxury items for most people; they are necessities. According to Satista.com (2016), the key global players in order of market dominance are Toyota Motor Inc. (11.6%), Volkswagen AG (11.1%), General Motors Inc., (8.2%) and Ford Motor Inc. (7.6%). Others are Honda (5.9%), Fiat (5.9%), Nissan (5.3%), Daimler (5.1%), BMW (4.2%) and SAIC (4%). This is evidently a competitive market with players using various marketing tactics to outdo one another.
A key driver of competition in the automotive industry is globalization. The opening of markets overseas has seen manufacturers venturing abroad to market their cars. Similarly, manufacturers who were strong in their traditional markets have to contend with growing competition from overseas players. Car producers are forced to outsource manufacturing procedures and to put greater emphasis on productivity and cost measures in order to remain afloat.
Autonomous cars are primarily supposed to curtail fuel consumption, carbon emissions and road accidents, which places them at an advantage over conventional vehicles. However, resistance to change means Autonomous Cars will need to invest heavily in consumer education and advertising. The management, therefore, does not expect to make profits during the introduction stage of the vehicles, but will instead invest in awareness creation and stimulation of the desire to try out the car (Kerin, Hartley, & Rudelius, 2015).
Products
Autonomous Cars will manufacture one brand of the vehicle, especially because there are no competitors with similar products. Moreover, this being the introductory stage of a product that is relatively new, the company will focus on encouraging demand for the vehicle and not marketing an exact brand. Manufactured units will be sold from the firm’s premises because it will be difficult to find willing distributors in the infantile stages of marketing. On pricing, Autonomous Cars will be priced highly at the beginning, partly because the firm would like to recoup its investment, and also due to price insensitivity among the initial buyers of the cars (Kerin, et al., 2015).
References
Statista (2016). Global market share of the world's largest automobile OEMs as of August 30,
2014. Retrieved from http://www.statista.com/statistics/316786/global-market-share-of-the-leading-automakers/
Kerin, R. A., Hartley, S. W., & Rudelius, W. (2015). Marketing (12th ed.). Columbus, OH:
McGraw Hill Higher Education.
