A look into the future of the global automobile industry with an emphasis on emerging fuel technologies: Rivalry strategy impact

Najm-Us-Saqib Mushtaq & Jalal Sarwar

Student thesis: Master thesis


An increased focus on CO2 emission level from the road transport sector has over the years put immense pressure on the global automobile industry to lower its carbon footprint. Today, the global automobile industry is standing in front of a major technological change, as there are several competing technologies which can possibly become the mainstream in the future. Not to miss out on a potential competitive edge, represented by this technological change, automobile manufacturers have presently undertaken a multi path strategy. In addition to comply with the strict environmental regulations, like EU’s 20-20-20 carbon footprint reducing policy. These factors are creating uncertainty in the evolving future of the automobile industry. Which path will the industry take? Questions like the former are increasingly demanding a plausible look into the future of the global automobile industry in this context. Among the technologies in emergence, hybrids, plug-in hybrids and electric vehicles are identified to have the highest impact on the future of the automobile industry. How will that affect the internal rivalry among automobile manufacturers is the essential research area of this thesis. This paper follows M.E. Porter’s (1979) model of competition coupled with scenario thinking to provide a look into the future of the global automobile industry, given the impact of the fuel technologies in emergence. Key findings in the paper are that the extent of consumer acceptance of these technologies mainly depends on the volatility in the oil price. Since consumers are primarily driven by their personal economy. Automobile manufacturers, on the opposite, are pushed through the shift by the strict environmental regulations. Whether manufacturers are able to produce the desired quality or not, and to what extent are the consumers going to accept these technologies lays the basis for the industry scenario interpretation in this paper. This industry study has revealed several major implications for the automobile manufacturers in a given future industry scenario. Firstly, different firms have to strategize differently, according to their resource strengths and capabilities to take advantage of the opportunities and defend against the threats arising in a plausible future. Secondly, there is an increasing focus on electrification of vehicles in the coming years, with many manufacturers already investing millions of Euros into these technologies. Finally, in the future a vast number of changes will be evident in the global automobile industry. New players like start-up firms, third parties and even suppliers are likely to form a part of the new era of the automobile industry.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
Publication date2011
Number of pages142