Final answer:
Entering the automotive manufacturing industry as a supplier of engines poses several challenges, including high capital requirements, technical expertise, and regulatory compliance. While the industry is heavily regulated, there is still a possibility for new companies to enter and innovate in niche markets or through collaborations.
Step-by-step explanation:
Barriers faced by new companies in supplying engines to the automotive manufacturing industry:
1. High capital requirements: Entering the automotive manufacturing industry requires significant financial resources to establish production facilities, research and development, and marketing.
2. Technical expertise: Developing the necessary expertise to design and manufacture engines to meet industry standards can be challenging and time-consuming.
3. Regulatory compliance: Automotive manufacturing is subject to strict regulations and safety standards, which new companies must comply with.
Regulations and legal barriers:
The automotive industry is heavily regulated, particularly for safety and environmental standards. Compliance with these regulations can involve additional costs and bureaucratic procedures.
Costs associated with gaining expertise:
The expertise required for engine production demands significant investment in research, development, and training. This can be costly for new companies.
Number of companies ready to enter:
While it is difficult for new companies to enter the automotive industry, there are opportunities for innovative engine suppliers to enter niche markets or collaborate with established manufacturers.