Micro And Macro Environmental Analysis

Micro And Macro Environmental Analysis Of Automobile Industry-UK



Micro And Macro Environmental Analysis Of Automobile Industry-UK

Introduction

The British motor industry is known for exclusive brands such as Rolls-Royce, Bentley, Land Rover, Aston Martin, Jaguar, and the iconic Mini. British cars have always had consistent representation in auto racing. (Setright, 2008)

The British motor industry started when Frederick Simms became friends with Gottlieb Daimler, who had, in 1885, patented a design for an internal combustion engine. Simms bought the patent rights for the engine and in 1893 he founded a company, The Daimler Motor Syndicate Ltd, to build boats using the engine. In 1895 Harry J. Lawson bought-out Simms' interests in the engine, after realising its potential for road vehicle use. Lawson bought a site in Coventry for car engine and chassis manufacture, and on 14 January 1896 founded the Daimler Motor Company there which made Britain's first serial production car. (Church, 2007)

Infrastructure

The British motor industry has always been export oriented. Today it employs about 850,000 people and produces about 1.5 million cars and 216,000 commercial vehicles per year, 75% of which are exported. The top five UK car producers are Nissan, Toyota, Honda, MINI and Land Rover. However, international competitiveness of UK cars has declined consistently since the 1990s and the country became unable to sustain production on par with Germany or France. Since 2008, motor vehicle production fell from 1,813,894 to 1,750,253. The country has been overtaken by fast industrialising economies such as Brazil, India and Mexico. The UK is the 13th largest automobile producer in the world. (Church, 2007)

Macro Environmental Influences

PESTLE Analysis

UK Car industry makers nearly 60 million cars a year, and employs millions of people around the world. Its products are responsible for almost half the world's oil consumption, and their manufacture uses up nearly half the world's annual output of rubber, 25% of its glass and 15% of its steel. No wonder the car industry accounts for about 10% of GDP in rich countries. In this paper, above four PEST factors involved in car industry are detailed explained and investigated in order to provide a clearer developing trend for global automotive industry. (Stratton, 2008)

Influences of political factors on car industry

Recent figures show that in 2008, UK built over 1.4 million passenger cars, a volume closely comparable with, for example, Italy, Spain or the UK. As UK has entered WTO (World trade organization), this important political policy change has caused large impacts on auto industry in UK. UK's WTO entry has a good deal of positive influence on the domestic automotive industry. WTO accession may advance the rapid growth of the auto market. Losses in terms of resources and social welfare caused by excessive government protection over international trade is reduced and then eliminated. Entering the WTO may lower the prices of products used in the automotive industry. Trade liberalization spurs the development of international trade and stimulates automobile exports. (Church, 2007)

Government regulations

Government sometimes announces a variety of regulations that could cause impacts on ...