Question

In: Finance

What risks does a car company face? How can we limit these risks?

What risks does a car company face? How can we limit these risks?

Solutions

Expert Solution

there are many risks faced by the car companies:

They are as follows

1.Consumers demand: Every consumer has a different demand

for eg. The middle class consumer will demand for many features in the car with the low prices

Higher class people will demand to luxurious facility in the car.

The demand for car differs from person to person or say consumer to consumer which creates a risk for automobile industry to fuel fill the consumers demand as per their requirement.

2. Economic risks: there Is always ups and down in the economic graph the sales of car adversely fluctuate in the automobile industry. some times the cost of making the car is higher than the selling cost of the car.

3.Risk of disruption: as the technology is growing faster many of the car manufacturers or car company has left behind due to the changes in the upcoming technology for eg. Electric car.

4.Quality of the manufactured product: the quality of the product used while making the car always matters as the selling of the car sometimes matters the quality of the products used.

5.Securities measures: every car company has to make sure about the security measures o the their car the cost of the car might be different but the every car company should give the proper security to their cars.

There are several ways to limit the risk of the car company

they can draw some good policies which will benefit the company as well as consumers

they should provide safety measures to all the model of the car either it may be low model

the pricing of the car should be done properly and should be selling at the affordable price

always keep their customer happy.


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