Risk Management in Automotive Vehicle Industry: A Project Analysis

This project delves into risk management within the automotive vehicle industry in Australia. It begins with an introduction highlighting the industry's vulnerability to exchange rate fluctuations and economic conditions, emphasizing the importance of risk control for the country's economy. The project explores the strategic role of Australia in the global market, discussing the challenges faced by automotive manufacturers in maintaining profitability amidst intense competition and exchange rate risks. It then examines risk identification processes, emphasizing the iterative nature of this process and focusing on risks within the System Engineering Program, including management risks, human capital risks, and supply chain risks. The project further analyzes risk assessment and evaluation processes, highlighting the importance of prioritizing and mitigating risks. The project then discusses the automotive industry's contribution to the Australian economy, including its multiplier effects and the benefits of government assistance. The methodology section explains the use of secondary data from various sources, such as research papers and governmental statistics. The aim is to identify and analyze the different types of risks associated with the automotive vehicle industry in Australia and to find suitable ways to reduce these risks. The project concludes with research questions that address the different types of risk factors, the challenges, and the strategies to overcome them.

Running head: RISK MANAGEMENT IN AUTOMOTIVE VEHICLE INDUSTRY
Project on Risk Management in Automotive Vehicle Industry in Australia
Name of Student-
Name of University-
Author Note-

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Literature Analysis
Introduction
The risk in automotive vehicle industry is mainly due to the present variation in
the exchange rates of the country (Dawson, Searle & Paterson, 2104). The variation in rates of
the currency between US dollar and the British pound is about 60%. The variation rate of the
Japanese Yen is even much higher.
According to Drauz (2014), Australia’s economy is another risk that trends on the
risk management. If the risk of the automobile vehicle industry is not controlled then the
economy of the country also gets decreased. Spare parts production and assembling of car is
going very high in Australia. Changes are also seen in the development of the technology of the
automobile industry. There is hazard and risk of the trade of the automobile industry.
The brake component manufactures have more risk than hood component
Manufacturer Company. The risk that is involved in the automotive industry depends on the total
volume of the production (Pinkse, Bohnsack & Kolk, 2014). A manufacturing company that
sales $50.000.000 amount would be experiencing hazard of risk to that of the company which
sales $50.000 US dollar.
Australia’s strategic role in the global market
According to Litman (2014), the main challenge of the automotive manufacturer
is to achieve satisfactory amount of profit. The cost of newly made vehicles is significant as

2RISK MANAGEMENT IN AUTOMOTIVE VEHICLE INDUSTRY
stated by Research and Development. To compensate with the production cost of manufacturing,
sufficient amount of sale should be done.
There is extreme competition in the vehicle automotive industry of Australia as there are
many companies that emerge from other regions from the global markets (Bell et al., 2014).
This creates a pressure on the other brands that are established in Australia.
The important part of vehicle automotive industry is the exchange rates that are available
in Australia. The vehicle automotive manufacturer of Australia mainly operates in the global
market. Many manufactures depends on the exports that gains acceptable sales of the company.
The exchange rate risks are lessen by establishing the company in the places near to the company
where the vehicle is sold (Huckvale et al., 2015). Recent decrease in the Japanese currency Yen
to US currency Dollar had led to much profit in the Japanese car manufactures. It is much
difficult for Australia to maintain its competition in the market globally due to its high rate of
currency. To gain profitable mount of sale, necessary exports are to done by the manufactures of
Australia in this competitive market. The vehicle automotive industries of Australia have stated
that government assistance is needed in order to cope up with the competition of the exchange
rate in the market of Australia.
According to Bahr (2014), with the rise of motor vehicles in the coming economy, the
demand is expected to rise in the future globally. The countries that are developing economies
have an interest to buy a motor vehicle. In emerging countries, the demand of buying motor
vehicle are much higher than that of the developed countries where there is already a hike of
motor vehicle and that is always expected to remain the same.

3RISK MANAGEMENT IN AUTOMOTIVE VEHICLE INDUSTRY
Risk Identification Processes
Another vital element for project risk management of vehicle in automobile
industry is the risk identification process. All the variable kinds and probable fixed of risks that
are associated with automobile manufacturing by vehicle industry in Australia. The risks are not
only restricted to the automobile company of the manufacturing industry. It is also restricted to
the unnoticed that are there in the offices (Borghini et al., 2014). The process of risk
identification is iterative. It is a never ending process. To get a check on if all the inputs are
equally used or if the engineers are doing their work as they are instructed or the mechanisms of
the manufacturing company are working properly or not, process of risk identification is done.
The risks that is present in the System Engineering Program that is considered as most serious
risk identification (Martín-Peña, Díaz-Garrido & Sánchez-López, 2014). The managers of the
departments identify them as the risk events. The management risks, risk regarding human
capital, supply chain risk and operational risk are the risk that is present in the System
Engineering Program. The risks that are interlinked with each other and re identified
continuously are used in the process of mitigating the risk of the industry.
Risk Analysis and Evaluation Processes
Risk analysis and risk evaluation of the risk management process is the process
that comes after risk identification. This is an important part of risk that is identified in the risk
management of the vehicle automotive. Identifying the risk that are present in the system module
of engineering, the team of risk review would assign the task of prioritization of risk and analyze
the risk where extremely serious risk are differentiated from the risks that are normal and they
are mitigated to the subject as per the requirement (Kou, Peng & Wang, 2014). The automotive

4RISK MANAGEMENT IN AUTOMOTIVE VEHICLE INDUSTRY
vehicle industry of Australia faces very hard competition from the agencies of government, the
risk that is most severe come from the end of government. The vehicle industries of Australia
publish the annual reports that focus on the aspects that are legal. Such types of aspects are
clearance of tax, CSR accomplishment and tax liabilities. Excessive cost of manufacturing and
the sales that are declining are related to risk management (Onat et al., 2016). The Assessment
Team of the Feedback is to be functional for this kind of aspects. The feedbacks that the
customer gives are to be attended carefully by the management of the vehicle industry also
attend the forum of customer review that are send online. The suggestions that are given by the
customers, issues related to product query and complaints are to be well initiated by the
management team to correct the drawback os the industry.
The importance of the industry to the Australian economy
Measuring the GVA (Gross Value Add) of the industry or the employment, not
always gives full account of industry to contribute to the economy of Australia. The industry’s
flows to produce extensively are the employment and production of the automotive vehicle
industry (Sierzchula et al., 2014). From the studies of automotive industry, it has been seen that
the industries are high multipliers. The multiplier varies between 2.9 to 10. The flows on the
effect on the surrounding industries are so much important that every $1 GVA that are provided
by industry of the automotive manufacturing the benefits of economy ranges between $9 to $1.9
dollar. The government’s assistance of 1$, the economy of the Australia receives economic
benefit of 18$. CGE (computable general equilibrium) is used by the economy of the Australia
and is known as dynamic TERM model.

5RISK MANAGEMENT IN AUTOMOTIVE VEHICLE INDUSTRY
Summary
The methodologies that are described in risk management technique give a
complete management of risk. The ways by which the risk management is controlled are
described in the process in order to accomplish the project time and resources. The economy of
the automotive vehicle industry also reflects the economy of Australia. The risk that are related
to the vehicle industry are identified first and then the risk is analyzed and evaluated for the
further assessment. After analyzing this risk, the risk id optimized by the management team of
the automotive vehicle industry and preventive controls are taken that are to be done to avoid
those risk. The processes that are involved in managing the risk are al discussed elaborately in
management the risk.
Methodology
Secondary data are those data that are accumulated by some other sources other than the
user. Common sources for the automotive vehicle industry are the research papers and statistics
that are accumulated by the governmental departments, records of the organization and the data
that were collected for the purpose of other researchers. The data that are primary are
accumulated by the person who is conducting the research paper.
The time is saved by the using the secondary data. A lot of time is wasted for collecting
the data, particularly the data that are needed for the research work. Spending this much of time
is not possible for any researcher to get of their own. Secondary data is essential for analysts of
economic and social change. It is not possible to handle a new survey for the required data that
are needed for the research work. For marketing research search, the secondary data may be not

6RISK MANAGEMENT IN AUTOMOTIVE VEHICLE INDUSTRY
useful because the data may be obsolete. Data that are used in the research are obtained from the
secondary data of different sources such as progress reports, libraries and internet searches.
Aim
The main aim of the research project is to identify and analyze the different types of risks
associated with the automotive vehicle industry in Australia. The research project also has the
aim of finding some suitable ways to reduce the risks factors associated with the chosen industry.
Question
What are different types of risk factors associated with the project management in the
automotive vehicle industry in Australia?
What are the main challenges associated with risk factors in the project management in
the automotive vehicle industry in Australia?
What are the suitable strategies for overcoming from the challenges due to the risk factors
associated with the project management in the automotive vehicle industry in Australia?

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References
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