Iundustrie Pininfarina: The New Customer Decision

Competitive Environment

In the near term, the environment in the European automobile commercialise faces bleak and may result in a shakeout that increases pinch for change on European manufacturers. Many of the changed environmental factors be the direct or indirect result of the capital manufacturing capabilities of Nipponese and other non-European firms.

Competitive Environment Bleak

1. The market has grown only behind in the past two years and is more(prenominal) than 10 per cent below the 1991 high sales. (Exhibit 3).

2. Profit levels argon at cyclical lows.

3. Manufacturing capacity utilization is low - around 75 per cent.

European Manufacturer under Pressure

1. Asian competitors incur been gaining share at the expense of European producers (Exhibit 3).

2. Japanese voluntary export restraints are scheduled to expire soon. In European markets without restraints, Japanese producers have significantly higher share than in markets with restraints.

3. Customer happiness levels are generally disgrace for European manufacturers (Exhibit 4).

4. European producers appear to seriously lag Japanese and American quality and ram efficiency levels (Exhibit 5).

Impact of Manufacturing Capability

1. Improved manufacturing techniques have been responsible for the simultaneously superior quality (internal and external) and superior manufacturing efficiency and costs of non-European producers.

2. ;Increased establish cropivity made possible by improved manufacturing contributes to over-capacity problems by getting more production from fewer inputs.

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Pininfarina and Niche maker Position

Niche Producer Advantages

1. Lower fixed costs provide lower overall costs, when volumes are low.

2. Niche producers can respond more effectively to volume fluctuations.

3. Niche producers often bring product and design skills and superior reputations.

Potential Threats to Niche Producers

The spread of more effectual production and producers has raised at least two potentially serious problems for niche producers.

1. Traditional niche manufacturer customers (e.g., Peugeot & adenine; Fiat for Pininfarina), who themselves...

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