Nissan Pest Analysis

856 Words Mar 17th, 2014 4 Pages
PEST Analysis
The PEST model aims to examine the external environment of Nissan, which in this case is the automobile industry. We will particularly expand on the political, economic, social and technological aspects. The political environment of the automobile industry encompasses government regulations such as corporate tax and international trade regulations. Worldwide, cars are subjected to corporate tax by the government of approximately 6%. For instance, in Mexico, it is 6.25% (Internal Revenue Service). If the government alters these taxes, it would directly affect the cost of Nissan’s vehicles and thus affect demand of those specific countries. Furthermore, governments impose international trade regulations on imports so to keep
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This is because there is generally a high percentage of the population who own cars and the population is relatively stable (Trading Economics). These findings imply that the demand for vehicles is predominantly a result of substituting old cars with new ones. In developing countries, the infrastructure of public transportation is not as highly efficient as those of developed countries thus owning a car is vital. In addition, according to many market researches conducted, a car is also a social status (Chatterjee, 2011). In the automobile industry, cost of fuel is directly proportional to the costs of owning a vehicle, as it is the most common source of energy for cars before gas and electric. Fuel prices have been going up for the past decade and have the power to motivate or demotivate individuals to purchase vehicles instead of using public transport if available. Moreover, automobile manufacturers have a great deal of exports and subsidiaries as shown above in Table 1-1.
Exchange rate risk is something else to be considered firstly because of revenues from exports to other countries and secondly when consolidating balance sheets in Japan at Nissan’s Headquarters at the end of the year from Nissan’s subsidiaries. Furthermore, the business cycle the economy is in strongly affects the sales of automobiles. A recession would usually lower the sales. In the case of Nissan, net income decreased

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