Press Release

The strategic move of an automotive motor company to diversify their motor sales into automobiles shows promising future earnings. We performed a comprehensive examination of the automotive sector and its patterns, both from a current revenue viewpoint and future forecasts, in order to determine whether our company might expand into other possibilities to enhance our portfolio and boost revenue.

As of the end of the previous year, the United States had sold around 14.5 million automobiles (Wayland, 2020). This is a sizable portion of overall global sales, which averaged 70 million copies. Cox Automotive predicts a 15.3 percent drop, while TrueCar predicts a 15% drop compared to 2019 sales. According to TrueCar, retail sales are projected to be down only 8% from last year, but fleet sales to business and government clients are expected to fall 43% (Wayland, 2020). The automobile sector has been declining, with only minor gains on the horizon, as the trend shifts to alternative fuel cars. The sale of hybrid vehicles has been pretty consistent since its debut, and the significant rise in electric cars over the last two years demonstrates that the conventional motor has lost market share to hybrid and electric vehicles. This is a real indication of a shift in the type of motor required in vehicles, as well as the direction of the trend. Several of the major automakers are discontinuing car lines and will be substituting them with these sorts of cars in the future, which would only lower the value of our motor within this sector. Whilst gasoline engines will not be phased out entirely, our firm’s strategy must assure long-term viability and adaptability to current and future trends.

Some owners of fossil-fuel-powered vehicles have begun to convert their engines to electric motor engines as part of modern auto customization, an increasing trend in the EV business. As a result, demand for EV engines is projected to grow. EV sales are now moderate, with a sizable number of people purchasing the product.

Because of the coronavirus, which has resulted in the discovery of new variations, global economic growth is expected to remain moderate in the future years (Wayland, 2020). As a result, purchases of electric cars are expected to skyrocket in the coming years. Gasoline, being a fossil renewable energy source, is likely to be depleted. Electric vehicles are a viable alternative since they are more cost-effective than traditional automobiles.

If predictions are right, 2020 would be the fourth-largest yearly fall for the United States car sector since 1980, after only a 19.1 percent loss in 1980 and declines of 18 percent and 21.2 percent at the time of the Great Recession in 2008 and 2009, respectively. But things could have been a lot worse (Wayland, 2020). Given that the product is relatively new and that many people are drawn to it, the industry is facing a favorable market. Most people are moving to electric vehicles as they become more aware of the environmental hazards and global warming caused by fossil fuels, resulting in increased demand (Hertzke et al., 2020). In most nations, EVs are also substantially subsidized, as governments attempt to promote their sales in order to reduce pollution.

This strategic decision will help the community, the business, and the environment. Consumer demand for the motor will be high due to the increased demand for automobiles as well as a robust maintenance and replacement attitude among the ownership community. With increased demand comes additional employment and higher income from sales diversification.

Automobile production is performing well and will remain in our portfolio; but, the discontinuation of several types of autos, the move to light trucks and SUVs, and the rapid rise in customer demand for electric cars need diversification. The continued use of alternative fuels and electric vehicles will forever transform the automobile industry. The epidemic has created many unknowns regarding purchasers in the future; nevertheless, if current patterns continue, the boats purchased, as well as new and old purchases in need of repairs, with history indicating owners repair over purchasing new motors will be customer demand.

References

Hertzke, P., Gersdorf, T., Schaufuss, P. & Schenk, S. (2020, July 17). McKinsey electric vehicle index: Europe cushions a global plunge in EV sales. Mckinsey. https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/mckinsey-electric-vehicle-index-europe-cushions-a-global-plunge-in-ev-sales

Wayland, M. (2020, December 23). Coronavirus crippled U.S. auto sales in 2020, but it could have been far worse. CNBC. https://www.cnbc.com/2020/12/23/covid-19-crippled-us-auto-sales-in-2020-but-it-could-have-been-worse.html