Case Study

Invest or not? Does a fuel-efficient car make sense today?

7 pages
September 2005
Reference: IMD-2-0118

Lars Eklund, CEO of Autostar, a (fictional) Nordic automotive company is seriously considering the introduction of a fuel-efficient car into the European market. His final decision has to take into account various factors such as a stagnating market growth, pressure to earn cost of capital, a trend towards more powerful engines and more customization, rising and volatile fuel prices, and regulatory pressure to reduce emissions. In a situation, in which some competitors are actually intending to withdraw their models (e.g. Volkswagen the Lupo 3L), and others already successfully occupy their niche (Toyota with their Prius model), does it make sense to go for a market introduction? If yes, how can Eklund do it most effectively?

Keywords
Fuel-efficiency, Corporate Sustainability, Automotive, Corporate Sustainability Management
Settings
Automotive
Mid-2005
Type
Generalized Experience
Copyright
© 2005
Available Languages
English
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