Assignment task:
Demand: There is a 5% increase in demand across all market regions, as the global economy shows signs of an upturn. Europe has the largest market size, followed by the USA. However, there are indications of growth decline in Europe and, to a lesser extent, in the USA. China's market size is smaller than the other two regions, but it has the highest growth prospects. Last year we decided to expand our manufacturing facilities in both the USA and China in order to meet increasing demand. The new production capacity will be available starting one year from now. The high cost of battery arrays for electric vehicles is currently keeping prices high and market shares low. It's even worse for hydrogen vehicles, with similarly high costs for fuel cell stacks and hydrogen storage tanks. These costs need to drop substantially for there to be any hope of mass adoption in the market place. The hydrogen technology is still in its infancy and, unlike EV technology, is not even open for licensing. One option for us is to develop either one using our own R&D department. Out of the new technologies, hybrid would be within our reach, and we can, with relatively little cost and effort, add it to our product portfolio. Costs In the USA, industry is concerned with the availability of the work force for basic operations. This could hit some of our outsourcing partners heavily - especially those that are low-cost. Finance The European Central Bank (ECB) is easing its recovery measures, and has announced plans to reduce bond purchasing. They are also raising the interest rate to 0.5%, up from the current 0%. Projected interest rates show an upward trend but the ECB has yet to announce any plans to make additional increases for the time being, owing to fears of an imminent recession. The USA's Federal Reserve (the Fed) is raising its benchmark interest rate more moderately, to 2.6% up from 2.4%, but also raises the likelihood of a future hike. The People's Bank of China (PBOC) was expected to follow the Fed's actions, but has stayed put thus far. Sustainability Previously consumers did not pay that much attention to environmental issues or the working conditions in the automotive industry. However, in recent years there have been signs of a rising awareness amongst consumers as environmental groups have started publishing reports of possible mismanagement at suppliers' sites regarding working conditions and environmental negligence. These groups have been especially active as of late, and as a result the whole automotive industry is now under higher scrutiny. These aforementioned changes in customer behavior are most apparent in Europe, with the USA affected to a somewhat smaller extent. The GDPR regulations are in full effect in Europe. Any company wishing to collect and analyze user data from that region will need to comply with the regulations. Any enterprise failing to comply with the publicly-set privacy requirements will face a penalty of up to 2% of annual revenue.