Daimler Chrysler Smart ForTwo Hybrid Competitive Environment Report

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Nature of the market and demand for the product

DaimlerChrysler Smart ForTwo Hybrid is the new generation of cars in the world. Being one of the first to manufacture this kind of vehicle, the Daimler Chrysler does not expect to remain the only one on the market. The tendency to environmental protection is observed all over the world. People become conscious of world resources and seek another way to satisfy their needs. Thus, the market for environmentally friendly vehicles will only grow, involving more and more companies.

Furthermore, people are interested to pay less for the services they get. 20% of respondents express their interest in hybrid cars because of the economy on fuel that costs much (Mateja 2006). The demand for the product rises frequently as people are interested in using products of high quality, low prices, and safe for the environment they live in.

Size of the market

The size of the hybrid car market, for now, is not big as it moves slowly. The leading countries where the hybrid car market grows steadily are The USA and Japan. Dwelling upon the segment of the hybrid cars on the American market, it is notable to stress that it was about 1.3% (212,000) of the total scope of the light-vehicle market in 2005 with the prediction to be 3.5% of the American market in 2010 (Hybrid Car Overview 2005). Based on the sales report of the hybrid cars in 2010 it is possible to conclude that the market grows dynamically. It is summarized by SBI calculations that “sales of hybrids accounted for 99% of all-electric vehicle sales in 2009 worldwide” (Hitchings & Peckham 2010, p. 15). Notably, half of the sales cover Japan automobile market.

The main trend of the modern hybrid cars industry is focused on the Mini models. The size still plays a significant role in the American motor market development. But, at the same time, the style also matters. It appears to be interesting to know that “automakers are looking to capitalize on what they perceive as budding interest in small cars and, in terms of fuel-efficient options, it seems the more the merrier” (Schefter 2007, par. 7). The DaimlerChrysler Smart ForTwo Hybrid ideally meets the customers’ requirements in the relation to trends. Thus, a great many different competitors try to increase the tension in the car market, namely Audi, Volvo, Toyota’s Scion, Honda, and other brands that also develop in the chosen direction.

The industry structure change over the next five years

It is crucial to mention that primarily smart cars were considered to be the city runabout models which are not suitable for long distant traveling. The demand for Hybrid cars requires the manufactures to seek ways and any other facilities to make the products available for long distances. The five years is the term that may be convenient for the affair.

Five years ago, Art Spinell predicted that till 2009 “if gas prices go higher than $3, sales could reach 60,000 or 70,000 units, but regardless of gas prices, they should have no trouble selling 30,000” (Mateja 2006, p. 1). The prediction has been realized. Considering the increasing demand for the cars like DaimlerChrysler Smart ForTwo Hybrid, it may be predicted that the sales will increase about 50-605 in the next 5 years if to predict the same tendency of the fuel price increase.

Reference List

Hitchings, M. & Peckham, J., 2010. Hybrid-Electric Car Sales up in 2009 Despite Recession. Global Refining & Fuels Today, 2(35), pp. 15.

Hybrid Car Overview, 2005. Hybrid Car. Web.

Mateja, J., 2006. DaimlerChrysler Smart car landing in the U.S. in 2008. Knight-Ridder Tribune Business News. p. 1.

Schefter, K., 2007. DaimlerChrysler Smart Car. Green Car. Web.

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