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Market and Financial Competitiveness of Japanese Automakers (1980-2014)
Submitted by Mihail Marinov, Yokohama National University on 12 avr. 2016 - 15:52
Type de publication:Conference Paper
Source:Gerpisa colloquium, Puebla (2016)
This study examines the performance from 1980 to 2014 of Japanese automakers that make passenger cars and light trucks and compares their performance with that of their Western counterparts, including premium European (German) automakers. The inquiry focuses on market competitiveness, which according to the academic literature is reflected by the relative performance of a company's products in the market. Market performance exerts significant influence on profitability, which is the reason why this study also investigates the profitability of Japanese and Western automakers.
The data used in this study was collected from publicly available sources: corporate financial statements and annual reports from 1980 to 2014. The measure used to estimate market performance consists of two indicators: market share and brand value. Market share is commonly used in business research as a proxy for market performance. We have attempted to deepen our measure of success in the market by incorporating a rough measure of brand value that allows us to take into account the fact that a luxury vehicle and a mass-market vehicle have very different price points and profit margins. As for profitability, the indicator chosen for this study is the operating profit ratio because it is generally held to be the best measure of the profitability of the core business of a company.
Our findings indicate that Japanese automakers show continued success in market performance and that in the last decade they have established a firm link between market performance and profitability, with some Japanaese automakers reporting record operating profit ratios. The discussion focuses on the future challenges that the Japanese automakers need to meet and attempts to project their future performance in the context of the increasingly global automotive industry and the "do more with less" strength of Japanese automakers.