PEST analysis for the car industry

PEST analysis will be able to be utilized to help detect trends in the external environment that will eventually discover their method into the competitive environment. It gives a relation between the general and competitive environments in that weak signals in the general

General Motors (GM) has been participating in the Chinese automotive industry for over nine decades. In ensuring, that General Motor’s operations in China remains competitive as well as achieving their vision to be the most valued car marker in the Chinese auto market, as such a PEST analysis is to analyse the automotive market environment in China. The analyses will assist General Motor in understanding current and future implication on the business and automotive market environment in China that could affect General Motors operation and sales in China. From the analyses this paper will then provide the necessary recommendation and actions that General Motor could adopt in adapting to the changes in the automotive and business environment

Since the twentieth century, America has dominated the car industry business. Automobiles have made a major influence in the society and the economy of America ever since. Especially when Henry Ford, founder of Ford Motor Company, developed two of his inventions, Model T and Model A, flourished into a big success around the 1900’s. Nonetheless, the culture we live in today is influenced tremendously by the advanced technology we created, and it grants industries new opportunities that may evolve the automobile business as we know it.

PEST analysis is used for to understand market growth or decline and to discover the position, potential and direction of a business. It is also defined as business measurement tool. PEST stands for Political,

PEST is an acronym used for companies with in the political, economic, social and technological views. PEST allows companies to view and observe certain areas that might have been overlooked. The company I will be discussing the PEST analysis is Target. Target is a large scale company and is constantly changing in the industry. The political views of Target is that they must have an unbreakable bond with China due to majority of its products coming from that country. They must be aware and stray away from any conflicts because it can create a negative affect in the operation of Target. Also the company is altered by taxation, tariffs, cost, and trade restrictions especially when they're trying to broden outside the United States. The economic

PEST analysis (Political, Economic, Social and Technological analysis) describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. Some analysts added Legal and rearranged the mnemonic to SLEPT;[1] inserting Environmental factors expanded it to PESTEL or PESTLE, which is popular in the United Kingdom.[2] The model has recently been further extended to STEEPLE and STEEPLED, adding Ethics and Demographic factors. It is a part of the external analysis when conducting a strategic analysis or doing market

The business environment is also changing so that many of the businesses are becoming innovative with time. The world economy is concerned about the rise in global warming which occurs as a result of the carbon IV oxide emission from the fossil fuel. So, it is right to say that Mary T. Barra’s effort to ensure that General Motors produce or manufacture motor vehicles that are environment friendly and especially the solar vehicles is good for the overall growth of the economy and is in line with the PESTEL strategic concept of a good business environment. The strategic concept of providing a pollution free product is in line with the needs of the modern economies where most of the innovations are going towards clean and renewable energy. There are many reasons why the motor vehicle industry in the United States of America is going to continue growing under the President Trump’s administration. The first reason is that his political statement supports local industries as he states clearly that it is an “America First” where the interests of the United States companies and employees will be given first priority. Accordingly, this would end up in creating a good working business environment that can be relied on in the long run. The political and environmental concerns as raised on the PESTLE analysis are very important as they make

The automotive industry has been one of the factors of trade between several countries that became very important to the United States trade market. The industry took a heavy hit when the economy crashed in 1929 forcing car industry sales to go down. The fall of sales with automobiles created havoc in other industries as well. The domino effect began to take effect on other business such as oil and gas companies. People stopped by oil and fuel when they couldn’t afford to use their automobiles. People couldn’t get to work which had a huge factor on employment and loss of jobs. This paper will discuss the huge effect it had with other areas of the

automobile industry and have done so in a highly competitive way. The automobile industry is categorized as an oligopoly. In this particular structured market, outside organizations have the capability of entering the automobile industry, but in some cases there can be barriers of entry and exit. According to Colander, D. (2010) “Implicit collusion among U.S. automobile firms led to foreign firms’ entry into the U.S. automobile market.” Basically, a collective decision is made to reduce or increase pricing in the industry without companies specifically meeting to do so. In the global market, the automobile industry is competitive and creates opportunities to increase production along with establishing operations in other countries throughout the world. The ability to sustain a level of profits will be a challenge. With fluctuating market pricing, market share of the automobile industry can be increased or reduced. In some cases, making a significant price reduction can eliminate a competitor from the industry, which can result in long-term profits.

Global competition in all industry especially the automobile increases every time. Since 2009, China has become the world's largest automobile producer with an annual sale of over 14 million vehicles. This means it had surpassed Japan's previous records since by 2010 the government had focused their records to over 17 million. This growth has been elevated by the high demands due to the rising incomes. The middle class has advanced its status through the help of the supportive industry policies from Chinese government (Keith 2012). This is why there was a need to introduce the FIAT cars into the Chinese Automobile Industry.

To analyze and deal with environmental factors, we can use PESTEL framework, and Porters Five Force analysis. World wide automobile company like Toyota depend on vehicle prices, per capita disposable income, fuel prices and product innovation. For supplier, vehicle prices stem from material and equipment costs, with higher steel and plastic prices raising manufacturers' purchasing costs and, ultimately, retail prices. . For the demand side, Income determined affordability for consumers. As incomes increase, the propensity to purchase motor vehicles increases as they become more

Particularly a PEST investigation is a helpful instrument for comprehension dangers connected with business sector (the requirement for an item or administration) development or decrease, and all things considered the position, potential and course for an individual business or association. A PEST investigation is frequently utilized as a bland "introduction" instrument, discovering where an association or item is in the connection of what is going on outside that will sooner or later influence what is going on inside an association. The six components shape a system for looking into a circumstance, and can likewise be utilized to audit a technique or position, bearing of an organization, an advertising suggestion, or thought. (Aberbach, et al, 2001)

The PEST analysis is more of long-term analysis that can help determine how Political, Economical, Social, and Technological change will affect the performance and activities of a business.

Regulations and laws are passed by government agencies. The automotive industry is one of the most regulated industries in the US. The consumer benefits from the safety of the vehicles; however, the cost of the regulations and safety recalls is passed on to the consumer eventually. Emissions regulations continue to increase which is another cost the automobile manufacturers must overcome.

PEST Analysis is the Political, Economic, Social culture and Technology analysis that a company does to determine the overall business environment. A PEST analysis is a look at the external environment of a company or a business that plays an important role in managing and decision making of a company. It is crucial for a company to consider its environment before relating with the public or customers. The PEST analysis examines the impact of each of the factor on the company.