Profitability of the Automotive Industry in the United Kingdom - Coursework Example

Almost all of the population in the UK are working in the Metro and hence, have their own mode of transportation, car. It is here that the researcher has chosen the automotive industry because it has one of the most used products, automobiles. Automotive manufacturing companies such as the Ford Motor Company, Hyundai Car (UK) Ltd, Toyota Manufacturing UK Ltd, and Nissan Motor Manufacturing (UK) Ltd will be the research correspondent. The companies will be analyzed based on their reported facts and figures as to productivity, competence, and profitability.

      This paper aims to be a useful tool for those who are interested in investing in the said industry by looking at the financial ratios to be presented as to its profitability. It aims to be a valuable aid for investment decisions. It also aims to be a useful related study to those who would want to perform such a similar analysis in the future. 

Chapter 2 – Review of Related Literature/Studies;

        A study conducted by Ernst and Young,  a world-respected accounting and auditing firm, shows that the United Kingdom is Europe’s favorite destination in terms of monetary investments. After learning of this new research, Trade and Industry Secretary Stephen Byers announced that this is a “ringing endorsement”  for foreign companies to set up shop in the United Kingdom. This recognition is when many EUROPEAN  countries were made alternative choices.  In fact,  the Ernst and Young company’s Investment Monitor Report shows that the UK had an increase in foreign investments by as much as thirteen percent in 1999. This UK ratio is double the investment increase in the European investment. Also, the market share of foreign investments has also risen. The accounting firm explained their findings by stating that there were two thousand two hundred forty-three that entered into the European arena which represents a five percent increase in 1999. However, there were five hundred seventy-five investments that specifically reached the United Kingdom. This represents a chunky thirteen percent increase from the prior year investments of only five hundred eight investments in this land of the King Arthur fame in the same year -1999.  Further, the United Kingdom companies also invested in the other European countries to the tune of twenty-six percent. This is a two percent increase in investments (Auto industry, 2nd May 2001).     

     In the article Development and Dependency in Southeast Asia: the Case of the Automotive Industry, the year 1988 saw the Malaysian national car, Proton, gain a seventy–three percent share of the Malaysian automotive industry market. One good reason is that the company is the beneficiary of its governments’ exemption from complying with the Malaysian government’s forty percent ID. This fee is being paid by other automotive manufacturers inside Malaysia. Also, the foreign competitors of the company are being imposed very high import duties on their CBUs entering the Malaysian circuit. In the past, Proton had been mocked by its critics when it just started operations because it had to overcome huge losses which would prod other less –brave and adventurous companies to fold up their operations in this Southeast Asian Country.