PEST analysis for the car industry

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Research question/Purpose

The Car Industry is changing its structure quickly. While Toyota earned some 124 billion SEK last year, GM lost about 65 billion SEK. Many mergers have happened and more changes are bound to happen. Write an essay pointing out the PEST-factors you find having a strong impact and causing these changes in the car industry. Also, reflect on the changes you think will happen in the years to come.

1.Introduction [1]

PEST analysis is a process of checking and analyzing information relating to the environment. The PEST analysis is a useful tool for understanding market growth or decline, and as such the position, potential and direction for a business as a business measurement tool. It involves monitoring the changes
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[4]

Government sometimes announces a variety of regulations that could cause impacts on industry. As to automotive industry, government regulations, such as improving protection for safety and fuel consumption and improve emission against air pollution, have increased total cost to car products. As is seen from above figure which is statistically made by the U.S. Bureau of Labor Statistics (BLS), the middle part shows the average price of a car with no regulated improvements in 1967. The lower part represents the value of added protection for safety and polluting emissions equipments. The upper part is the price due to non regulated improvements together with other quality and price increases. It is obvious that the government regulations have brought large influences on the price of car products.

3)Vote for new president [5]

In early days, automobile manufactures hope governments to build public roads to stimulate customers' demands. Road building was sometimes also influenced by political ideologies. If the government could take policies and actions to improve transportation system, the auto industry could be benefited very much. That is why the voting of president could affect car industry. Once the new elected president who supports to increase government spending on roads wins on voting, whole auto industry in this country could have a brilliant future.

3.Influences of economical factors
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