Globalization and localization in the automotive industry
Profit margins in car making are increasingly being eroded and now are rarely more than three per cent. The cyclical nature of the car business means that producers save up profits from the fat years in order to see them through the lean years, which invariably follow. With competition increasing, product cycles have become shorter and many firms are still trying to emulate the Japanese four year product replacement cycle. As a result, competing models are often launched within months of each other. This means each firm's model spends less time than in the past being new and desirable and this affects sales.
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