PORTER 5 FORCES MODEL FOR AUTOMOTIVE INDUSTRY

1. Threat of New Entrants: The automotive industry has a high barrier to entry due to significant
capital requirements, economies of scale, and brand recognition. New entrants often find it
challenging to compete, but the rise of electric vehicles (EVs) has opened up opportunities for
tech companies and startups.

2. Bargaining Power of Suppliers: The automotive industry relies on a complex supply chain, with
numerous component suppliers. Large automakers have significant bargaining power over
individual suppliers, but suppliers with unique or critical components may have some leverage.

3. Bargaining Power of Buyers: Buyers in the automotive industry have a moderate level of
bargaining power. They can choose from various brands and models, and the internet has made
it easier to compare prices. However, brand loyalty and product differentiation also play a role in
buyer decisions.

4. Threat of Substitutes: The threat of substitutes is relatively low for the automotive industry.
While alternative transportation methods exist (public transportation, cycling, walking), none
provide the same convenience and personal mobility as cars.

5. Rivalry Among Existing Competitors: Rivalry in the automotive industry is intense. There are
numerous established automakers and continuous innovation, such as EVs and autonomous
vehicles, drives competition. Price wars, advertising, and product differentiation are common
tactics used by companies to gain a competitive edge.