Electric Vehicle Market Analysis

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This assignment requires you to conduct a comprehensive analysis of the electric vehicle (EV) market globally. You need to investigate current market trends, including sales figures, popular models, and geographic distribution. Identify the key challenges facing the EV industry, such as battery technology limitations, charging infrastructure availability, and consumer perceptions. Furthermore, explore government policies and incentives promoting EV adoption, and discuss the impact of technological advancements on the future of EVs.
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Running head: AVass electric buses and coaches for germany 1
Global Marketing
1.0 Introduction
Name:
Institution
Exporting the Australian AVASS Electric Car for the German market
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AVass electric buses and coaches for germany 2
Executive Summary
The reduction of tax on electric buses in Germany is a motivation to investors seeking to do
business in Germany. Among Germany’s safety laws is proof of safety and free emissions car.
This law applies across the EU and UK region. In fact, most countries in the world advocate for
production of vehicles with clean air. This sustainability initiative is in line with the modern
consumer needs, industry changes as well as government initiatives. The existing gap in public
transport provides a business opportunity for AVASS an Australian electric bus manufacturer. It
would be unfavorable for the brand to venture into the car business because the German
consumer has an attachment with traditional car brands like BMW Mercedes and Volkswagen.
This gives AVASS a reason to do engage in a unique business focus. The brand has years of
experience in exclusive high quality buses in the Australian region. Supplying electric buses for
Germany and its environs stirs up the industry with innovation of new brands.
.
Contents
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AVass electric buses and coaches for germany 3
Executive Summary.............................................................................................................2
1.0 Introduction....................................................................................................................4
2.0 Market Analysis.............................................................................................................4
2.1 Size of the market and growth rates..........................................................................6
2.2 Population..............................................................................................................8
3.0 Organizational Analysis...............................................................................................10
3.1 Customer Audit and Buyer Behavior.......................................................................12
3.2 AVASS 4 Ps..............................................................................................................13
3.3 Competitor Analysis................................................................................................14
3.4 Competitor Advantage of your product...................................................................15
3.5 Positioning...............................................................................................................15
4.0 Macro environment......................................................................................................17
4.1 Porter five forces model...........................................................................................18
4.2 Value Chain..............................................................................................................18
4.3 BCG Matrix.............................................................................................................19
5. SWOT Analysis (table with summary in main body)....................................................20
6.0 Conclusion...................................................................................................................22
References..........................................................................................................................23
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AVass electric buses and coaches for germany 4
Global Marketing
1.0 Introduction
The introduction of an Australian brand in the market is poised to bring opportunities and
challenges. The German government has a new plan called Energiewende, which seeks to
replace, reduce the use of coal and nuclear products (Dvd, 2017). Its annual release of 906
million tonnes of Co2 keeps increasing and vehicle emissions produce the highest carbon release.
The international markets have opportunities and challenges for businesses today because of
globalization. The development of technology within the global market is a major stimulant for
organizational development. As brands search for opportunities in new regions, market entry
strategies for new products and services emerge. The change in the business models redefines
business undertakings. Most global markets have a major challenge of dealing with
environmental issues (Konrad, 2012). Although German technology has found a place in global
markets as vehicle manufacturers in luxury vehicles namely BMW, Volkswagen and Mercedes,
there is a gap in bus companies. In fact, one of Germany’s brand, BMW is penetrating the Asian
markets successfully through the electric car model. Germany is a leading exporter of luxury
vehicles but its production of electric cars is still lagging behind. Taking advantage of this gap,
AVASS an Australian brand steps in with its electric car model set for the Germany market.
2.0 Market Analysis
The business opportunity in the bus industry has benefits as well as challenges. Among these are
the customer perception of the brand and brand identity. It also has challenges with its brand
equity. A reduction of 50% on tax gives AVASS a cost reduction incentive for business
(Bohnsack, Pinkse, & Kolt, 2014). Although the company is strong in Australia, venturing into a
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AVass electric buses and coaches for germany 5
market where there are giants in the industry has its challenge. In order to gain popularity and
acceptance in Germany AVASS may need partnerships for the whole production process or
vehicle parts. It takes multiple strategies to analyze its capability for this new venture. In
international business, there are different modes of market entry including partnership with
manufacturers in the region.
Industry statistics reveal the promising market potential in the market. The decision to enter the
European market starts with success at home (Vorrath, 2016). Recent moves by Germany to
import buses from Solaris Bus & Coach for parts of Germany is an indication of demand
(Eurotransport, 2017). AVASS plans to manufacture all electric vehicles in segments of busses,
cars, vans motorcycles and trucks. The brand has its battery-manufacturing unit, which makes its
production of parts more affordable. In Europe, the brand already has a production plant in
Turkey. Like its competitors BMW and Mercedes, AVASS has plants in China where the
emerging market shows huge demand for sustainable brands. The brand targets government
orders for large-scale supplies.
Although the global market seems ready for the electric vehicle, consumer trends in
Germany speak a different language (Petzinger, 2016). Germans have a connection with
environment friendly brands. Although keen on recycling, most of its consumers in the vehicle
industry prefer the high performing cars. These are fuel guzzlers whose maintenance is high.
Electricity in the country is cheap compared to coal products. In contrast to China’s public
charging systems, Germany has home charging units therefore; it gives AVASS confidence of
infrastructural development. AVASS has a reputation of producing quality unlike its competitor
Volkswagen that has had to deal with ethical issues about accountability in greenhouse emission
(Ewing, 2016).
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AVass electric buses and coaches for germany 6
The fact that AVASS has six years’ experience in lithium-ion battery gives it an edge.
Environment friendly products is one of the reasons for this adoption (Perkowski, 2017). Since
the brand is new in the market, partnership with reputable brands is appropriate. BMW chose to
collaborate with Samsung as an entry plan into China (BMW., 2016). . This is also the reason for
other brands like Apple having production plants in regions outside their home. AVASS needs to
look at advantages such as the low cost of operations because electrically charged vehicles do not
need fuel services. Technology on overage costs less and electric vehicles provide a sustainable
resource. Learning from successful experiences in regions like China, AVASS is able to make
estimates of its production process (Shrouzu, 2017). Industry stakeholders in the automobile
sector also agree to the green vehicles idea.
Market intelligence point towards partnerships with local brands in order to succeed in
the quest to create solutions (DeMorro, 2014). The BMW/Samsung deal is a perfect example of
how AVASS can reduce on the supply chain costs. Market share statistics also bring out
Mercedes as a successful global brand that AVASS needs to watch (Winton, 2017). The target
market is medium income earners. Carmakers rush to take advantage of this growing demand
proves the potential of this strategic move (Harvey, 2011). Consumer interests often translate to
sales but when it comes to disruptive technology, the innovator takes risks. Consumers drive
technological changes in the global markets. The demand for energy efficient products in the
region has support from government, NGO and the business community.
2.1 Size of the market and growth rates
AVASS is not a brand within the luxury car market. Instead, it falls in the same category
as Toyota and Ford and it is popular for bus models. Located at the heart of Europe, Germany is
the best access point for all of Europe. Besides the strategic geographic location, it is also
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AVass electric buses and coaches for germany 7
economically strategic because it is the largest in automotive market production and sales
(McCarthy, 2013). The country manufactures more than 15 million cars, which account for 19%
of global production. Its suppliers are globally recognized and its 20% contribution to GDP
makes it the biggest industry in the industry. Vehicles that come from Germany have a global
reputation of quality. The country also invests hugely in Research and Development (RD) for
innovative products.
Figure 1: German’s automobile exports surpass all other regions of the world (McCarthy, 2013)
It is hard to overlook the influence of technology because it improves efficiency, and
provides alternative modes of production. Technology production also enhances connectivity
between the automobile industry and technology. The electric vehicle provides a solution with
hybrid vehicles that is light in weight, and high in safety and fuel consumption (Bullis, 2013). In
Germany, investment in automotive is higher than the electronics and telecommunication
industries. This is a stable economy with a high rate of investment. Its legal system is friendly
with lower tax rates and it has quality infrastructural development. AVASS has access to
business partners for business financing and public grants. The German market is highly
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competitive and organizations embrace best practice in a population with a highly skilled
workforce. The main hindrance to the electric vehicles business in the EU is the battery-charging
infrastructure and vehicle supply range (Winton, 2017). AVASS is a renowned battery
manufacturer with years of experience.
Figure 2: The German consumer spending is a good sign of income growth (Destatis, 2017)
2.2 Population
Germany plans to have more than 1 million electric cars by 2020 and government
institutions are the leading customers in the EV segment. . This is an opportunity for AVASS
since the EU population is largely unaware of the benefits of EV. This means AVASS needs to
invest in target marketing and PR communication (Shahan, 2017). It needs to target buyers who
need:
ï‚· Affordable vehicles
ï‚· Great interior and exterior design
ï‚· Quality battery mechanism
ï‚· Variety in style
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AVass electric buses and coaches for germany 9
AVASS is the premium Electric Vehicle (EV) manufacturer situated in Melbourne
Australia. This privately owned brand is popular in AU because of its innovation and quality. It
combines safety, high quality and environment friendly attributes. The region has 81 million
consumers forming 16% of the EU population (GTAI, 2017). Over 60% of this population
comprises of a productive population between 25-69 years. Consumers in the transport segment
is the public industry (Morris, 2017).
Figure 3: Alarming greenhouse emisions in transport industry (Morris, 2017)
2.3 Market Barriers and Market Drivers
German laws favor the introduction of EV brands (GTAI, 2017). Compliance is
important for the development of the brand image and it protects the brand from exploitation and
legal suits. A complete market analysis captures the consumer trends and its influencing factors
such as environmental sustainability (Ruoff, 2016). These become the basis for present and
future strategies. AVASS marketing mix strategies must cater for cultural barrier and
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AVass electric buses and coaches for germany 10
environmental concerns. These are common hindrances to market entry strategies (Moran,
Abrason, & Moran, 2014). Learning ways to overcome such barriers is part of the strategic
management processes. Language barrier is also an issue because AVASS’s origin is in English
speaking Australia, which is different from German. Germans are loyal to local brands and
convincing them otherwise possess a major challenges.
3.0 Organizational Analysis
AVASS more than 100 years in the automotive industry. Its business focus is on
innovation and advanced technology. Its agenda is to use breakthrough technology for improved
transformation and capabilities. Its business model is collaboration in product delivery, business
processes and management style. Its head office is in Australia’s Melbourne, Victoria. It has
manufacturing units across the globe including China, India, South America and South Africa. It
has plans to have a manufacturing plant in Europe by 2018 (AVASS, 2017).
Expertise: Popular for its electric bus, AVASS intends to use the EV technology for
improved manufacturing of other vehicles. The brand is the Guinness World record holder for
high capacity and density, which surpasses the competitor four times. Its low cost battery also
lasts longer and it comes with 8 years warranty. The brand seeks to capitalize on these
advantages. The e-vehicle also has certifications in safety and reduced emissions. Its definition of
innovation features, new methods, advanced, new ideas, creative and unique ideas (Nzta, 2017).
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Figure 4: Avass electrical bus innovation Excellence (Payne, 2017)
Management: Leadership is also a significant factor because it influences the direction taken by
the brand. The inspiration to introduce the electric car was because of a number of global factors
including the need for alternative, convenient operations and low cost energy efficient vehicles
(Garage, 2017) multitier products. The brand hires the best skills in the region and it has more
than 500 employees in the EV department (Lannen, 2016). Headed by Allen Saylav its CEO, the
brand has employees across Europe, Asia and South America. It has employees in the
manufacturing unit, engineering, supply chain and management. The brand has top engineers and
designers with credentials in the automotive industry.
Current strategies: The brands management strategy has a focus on innovation and sustainability
for buses and coaches. This conservative brand accommodates for the development of the
electric car vehicles using advanced technology. The brand plans to take advantage of the global
market in different regions. The electric bus segment is a unique specialty that is still unexplored
(Ruoff, 2016). However, it needs to upgrade with additional features in order to meet the high
consumer tastes in Germany and Europe. The market is highly volatile yet it presents
opportunities. A closer look at some of the reasons why consumers would resist the electric
vehicle reveals concerns about the battery run in while in traffic and consumer loyalty to specific
car designs (Dowling, 2017). AVASS has a responsibility of transforming this consumer
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AVass electric buses and coaches for germany 12
perception. This is possible through integrated advertising strategies. The brand needs to take
advantage of the government support in Australia and Germany.
3.1 Customer Audit and Buyer Behavior
AVASS has a vision to enrich its customers, stakeholders, employees and distributors. The
electric vehicle offers solutions in the transport sector is for both private and public means. Oil is
a scarce resource globally and there are concerns about global warming and pollution through
gas emissions (Wee, Molin, & Liao, 2016). The table below summarizes some of its customer
reviews about electric vehicles.
Segment Customer perception
Electric bus Reduced emissions, less vibrations, excellent
performance, easy mobility, single charge per
day
Electric cars Cost effective, reduced vibration, battery
durability, excellent performance, safety
standards, zero emissions, advanced
technology, clean energy
Fuel vehicles Sleek design, high performance, variety, horse
power, value for money
Table 1: Customer perception of electric vehicles verses fuel combustion
Focusing on the electric bus consumer modern consumer, AVASS group needs strategies
in sales, service, spare parts, survey and sustainability to define its integration of suppliers in the
business agenda (Bohnsack, Pinkse, & Kolt, 2014).
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AVass electric buses and coaches for germany 13
3.2 AVASS 4 Ps
The 4Ps strategy for electric vehicles products is dynamic (Song, Hofman, Li, Han, &
Ouyag, 2015). The price, place, product, and promotion plan changes by location and market
trends.
ï‚· Pricing factors consider the cost of production in terms of the availability of
automobile parts, human capital and raw materials required to make a bus or
coach. A closer look at the electric version shows cheaper products and
maintenance.
ï‚· Product: A new entry of the electric bus brand into the German markets has to
devise ways in which to produce according to the consumer needs. The brand also
has customized productions for niche classification with style, comfort, safety and
status details (Dobson, 2017). Finding the right market in Germany is crucial for
target marketing.
ï‚· Promotions are important in shaping the brand name. Unknown products at
discount offers may sell or fail to sell depending on the customer review, brand
marketing and PR strategies. AVASS needs a CSR plan that makes it part of
German culture and consumer needs.
ï‚· Place: Stable brands like Toyota survive because of the availability of spares parts
in their areas of business (Derek, 2015). AVASS has a challenge of making battery
recharge infrastructure accessible because it is the role of the government to
develop the infrastructure.
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3.3 Competitor Analysis
The bus industry is unique because most EV producers focus on cars and motorbikes
(Yang, 2016). Germany is a developed country hence AVASS may need competitive plans for
market entry and penetration (Debord, 2016). Unlike the electric car, which needs style and
performance, public transport vehicles are keen on safety, comfort and functions (Team, 2015).
Bus manufacturers in Europe are:
ï‚· Solaris
ï‚· Volvo
ï‚· Irizar and
ï‚· VDL
AVASS needs to work on its brand elements for higher equity, a good reputation and
recognition. This applies to both local and global branding strategies. Research proves that
quality and self-identity are critical elements in global branding and marketing (Strizhakova,
Coulter, & Price, 2011).
Figure 5: Global EV trends for 2015 (Yang, 2016)
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AVass electric buses and coaches for germany 15
3.4 Competitor Advantage of your product
As future projections point toward the adoption of electric cars, Europe and Asia seem
promising (Campbell, 2017). The electric bus and coaches segment continues to experience
constant growth over the years. Avass has been in the business for over 6 years (AVASS, 2017).
Its 100 years’ experience in Australia’s automotive is an advantage. The brand also has a
reputation for quality battery production. The brand stands a high chance with larger
multinational partnerships from Germany (Lasserre, 2012).
Figure 6: EV market projections (RNCOS., 2016)
3.5 Positioning
Avass target marketing plan starts with the segmentation of its products to align it with
the local sustainability agenda. This breaks down its positioning in accordance to the specific
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AVass electric buses and coaches for germany 16
customers. Designed for the low-income customer segment, Avass customers are often middle
level earners. Its customers are within the middle class. The consumer perception on a scale of 1-
5 varies depending on the car brand. This is shown below
Brand Benefits Solaris Volvo AVASS Irizar VDL
Safety 2 1 2 1 4
Comfort 1 1 3 2 3
Battery pack 1 2 1 2 3
New energy 2 3 2 1 4
Design 1 3 3 3 2
Cost 3 2 2 2 3
Table 2: Customer perception of the AVASS
The following is the brand positioning data for 2015/2016 revenues in the region.
Brands
Comfor
t Safety Market Share
Solaris 1 4 10.4
AVASS 3 1 0.9
Volvo 4 2 17.6
VDL 3 4 3.2
Irizar 1 1 24.1
Table 3 Market share for brand position in Europe (Abb, 2016)
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Solaris; 10.4
AVASS; 0.9
Volvo; 17.6
VDL; 3.2
Ilrizar
Axis Title
Comfort
Safety
Figure 7: Avass bus competitors in Europe
4.0 Macro environment
Germany is a mature economy in which bus and coach manufacturers have a higher
bargaining power because of the market demand and less competition (Ljungqvist, Sargent, & J,
2012). This gives suppliers a higher advantage because there are fewer electric bus suppliers.
Australia is also a strong economy and AVASS has an advantage of providing low cost but
quality products. The customers bargaining power in Germany is the public transport sector.
Avass needs high quality, advanced technology, design and safety busses. Through partnerships,
the brand is able to establish its image within the EU. AVASS needs strategies that favor its lower
cost attributes without compromising its quality. The threat of substitutes is high in the luxury car
segment but not in affordable electric vehicles. These are efficient and reliable in the recession.
Besides the bus and coaches, AVASS also has motorbikes and coaches. This makes the threat of
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AVass electric buses and coaches for germany 18
new entrants in the market low because of segmentation. The electric car also has low threats
because the market is slow to accept the energy saving mode.
4.1 Porter five forces model
Rivalry in
electric bus
Threat of new
entrants
Bargaining
power of buyers
Bargaining
power of
suppliers
Threat of
substitutes
AVASS low medium high low
Solaris low high high High
Volvo low high high high
VDL low medium high High
Irizar low high high low
Table 4: Porter’s analysis of luxury brands in competition with BMW
In order to understand the competition and its environment, the Porter’s five forces
identifies the industry’s challenges (Porter, 2011).
4.2 Value Chain
Reports indicate that the overall production of electric vehicles has grown considerably
(Marklines, 2016). The fact that AVAS has a production unit in Asia is a plus because of reduced
costs of production. The primary activities that the production unit engages in are in form of
logistics, operational management, marketing and service. Changes in value chain affects the
support activities featuring technology, procurement, and firm infrastructure. Its main competitor
Ilrizar and Solaris continues to depict exponential growth in the market.
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AVass electric buses and coaches for germany 19
Figure 8: (handwerger, 2014)
Although most of the brand’s Europe production is planned for Germany, its home
country Australia and Asia have a considerable share. This caters for the automobile, motorcycles
and parts. The complexities of this value chain determines the changes in distribution networks.
It sells products to customers, businesses and distributors. The introduction of an electronic
vehicle implies changes in these system as well as marketing plans (handwerger, 2014).
4.3 BCG Matrix
In the BCG Matrix analysis the product with the most market share has higher returns. More
productions lead to higher efficiency hence the economies of scale lead to more profits. This is
what the reputable brands invest when there is high demand (Debord, 2016). However, the bus
market slower growth rate shows lower revenue and limited growth. From the BCG chart, the
electric car is in the dog’s market share showing an average of fewer returns on investment. The
AVASS electric bus has potential for future profits. A SWOT analysis shows that the electric
buses and coaches have highest profits within the corporates (Musk, 2017). Avass gains an
advantage because of its low cost within the electric bus and coaches segment. If the brand gains
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an innovative design in its electric bus product development, it stands an even higher chance. In
the region, other car brands are within the stars depicting high growth products with a higher
market share. These generate revenue and invest too. AVASS needs to capitalize on market
penetration, and integration for innovative brands.
Table 5: Example of BCG matrix for the electric car (Amcthebest, 2015).
The question mark brands (trucks) are at risk because it invests a lot yet goes through loses.
These are struggling brands leading to the dogs attributes. It needs market penetration strategies
and diversification.
5. SWOT Analysis (table with summary in main body)
During the global economic recession, economic challenges affect most brands. AVASS
becomes an ideal brand for low-income seasons (Piketty & Saez, 2013). As a public service
brand, it needs advanced technology and safety installations. The brand has a chance for growth
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AVass electric buses and coaches for germany 21
within an environment of high competition. It is impossible to ignore culture and language
barriers during the marketing activities.
Strength
ï‚· Acceptance in Australia and New
Zealand markets
ï‚· Government and corporate demand for
EV coaches and buses
ï‚· Focus on green products
ï‚· Quality brand
ï‚· Instability in fuel costs and economic
recessions
ï‚· Low costs
Weaknesses
ï‚· Consumer preference for German
origin brands
ï‚· Employee management challenges
ï‚· Limited variety in choices
ï‚· High cost of labour
Opportunities
ï‚· Partnership with giants in the region
ï‚· Advanced technology applications
ï‚· EU and global public systems
ï‚· Regional and national laws favoring
sustainable products for government
institutions
Threats
ï‚· Competitive environment of a
developed economy
ï‚· Preference for local brands
ï‚· Culture and language barriers
ï‚· Global economic recession
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AVass electric buses and coaches for germany 22
6.0 Conclusion
AVASS has a strong background in Australia and New Zealand. It is a quality brand with a
reputation in automobile battery manufacturing and electric vehicle products. Its entry into
Germany presents opportunities and challenges in the public service sector. Different theories of
international business explain its transition from national to regional and a global brand. As a
brand seeking to introduce a new product in an established market, it needs to look at its
strengths and weaknesses. A comparative analysis of its internal abilities against the external
market factors provides evidence based data to support its penetration. Entry strategies have to
analyze the new industry of Germany without ignoring the demand for EV buses and coaches.
The brand also has motorbikes, which are also in demand within the EU. Technology is also a
crucial influencer, which defines the target customer and brand positioning strategies. In modern
economies sustainability and fuel, efficiency gives the electric public transport products an edge.
AVASS needs to invest heavily in marketing strategies for success in Germanys and Europe. Its
competitors are old in the market and have decades of experience.
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