Pestle Analysis

1023 words - 5 pages

“Internal and External environmental audit” of the automobile industry in the UK using PESTEL and SWOT frameworks.
Britain’s automobile industry dates back to the late 19th century, when Daimler began manufacturing cars. Today, the UK is a major automobile and automobile part manufacturing hub and home to seven major car manufacturers. It produces a wide range of standard specification, premium and specialist vehicles, including Formula One cars and sports vehicles.
An analysis of the industry using the PESTEL (Political, Economic, Social, Technological, Environmental and Legal) framework is carried out below:
Political: The automotive industry has always received political support on ...view middle of the document...

80 per cent of car components are available in the UK and over 60 per cent of these are exported to other manufacturing facilities. Increasing exports and improved domestic demand have helped the industry to address the issue of overcapacity and asymmetric manufacturing facilities which resulted in overconcentration of manufacturing capacity in some regions.
Social: The car market in the UK is characterised by low retail sales (20 per cent) and 80 per cent corporate sales. This could be on account of pressures of affordability and taxes. However with an ageing demographic profile, car manufacturers could make attempts to increase retail sales to the over-45-years age group. High fuel costs have led to a demand for fuel-efficient cars and the sales of electric cars have doubled.
Technology: The commitment of the UK and the EU to reduce carbon emissions to below 133.1g/km have led to increased investment in research in the areas of “green” technology to reduce pollution. This has led to innovations in manufacture of fuel-efficient cars, electric cars and hybrid cars. With improved technology, there is already a decline in new car carbon emissions by 20 per cent over the last decade. All new cars manufactured in the UK are Euro V compliant. The focus on technology is apparent from the intensive apprenticeship and training programs for employees in automobile manufacturing facilities in the UK.
Environment: The UK’s automobile industry is sensitive to environmental issues such as pollution and carbon emissions. Car manufacturers have voluntarily set targets of lower carbon emissions from new cars of 130g/km and plan to migrate to Euro VI in a phased manner from 2014. The industry has made significant progress in innovations in fuel alternatives, fuel-efficient cars and tyre pressure monitoring in a bid to conserve fuel. Manufacturers also arrange to recycle End of Life vehicles (ELVs) which have been scrapped. Besides recycling of waste, this solves landfill problems.
Legislation: The automobile industry is subject to national, international and EU regulations concerning environmental issues discussed earlier, manufacturing and safety standards. From 2014, cars manufactured in the UK must...

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