3.2) PESTLE ANALYSIS
It is imperative on the part of companies in the industry to analyse the macro environmental factors which are beyond the control of company but have the significant impact on its future operations and profitability therefore to audit the present and anticipate the potential future changes so could be aligned with the changes and add to its advantage.
Indian automotive industry has witnessed dramatic changes right from liberalisation, 100% FDI through automatic route, steadily rising in national income, steadily rising standard of living, Socio Cultural Revolution of joint families to nuclear families, working couples, change in mind-sets where car was once looked as rare luxury now in some parts of India it is just a necessity, increasing people awareness and they being more
…show more content…
• Increase in the cost of imported auto components resulting from depreciating rupee gives a boost to raising prices in automobile sector which again hurts the profitability and demand for automobile in the domestic market.
As the prices of auto components increase, the prices of automobiles increase. This has a negative impact on the demand of automobiles.
Global oil prices crash:
Recent oil price crisis is in a way green signal for Indian automobile industry as industry’s demand is greatly dependent on fuel prices if fuel prices comes down it’s a joy ride for automobile industry and vice versa is the impact if prices start to rise.
Social
Environmental and organisational audits are used to discover a company’s position in their market and environment, and the company’s physical position.
With the recovery of economy, the world’s automobile industry has been growing steadily over the past few years. According to Bloomberg, the US automobile sales climbed from its depth 10.4 million in 2009 to over 15.6 million in 2013. Furthermore, industry analysts predict that the sales will
In the automobile industry, there are factors that cause a shift in the supply and price elasticity of the supply and demand. These factors can cause the
When the environmental factors are analysed, it is important to make it clear for the organisation regarding the impact of the environmental factor that could be made on the organisation in the near future. The main reason for analyzing the current data with the historical data is to forecast the impact that could be made on the organisation. from the forecast that has been made on the environmental factors, a business strategy is devised by the management in order to manage the business in response to the analysis carried out.
The fluctuations in the supply and demand of automobiles have an effect on other industries. One such industry that is affected in a measurable way is the after-market automobile parts industry. When the demand for new automobiles is high the demand for after-market parts is lower. When the demand for new automobiles is low the demand for after-market parts rises. The only explanation is uncovered when looking at individual households. Individual households have a limited amount of money to budget for transportation. If new cars are in high demand the income is higher for individual households. If new cars are not in high demand individual households have less money to budget for transportation. With less money to budget for transportation, individuals are more likely to use after-market parts to make repairs on their existing vehicle rather than purchase a new vehicle when their current vehicle needs costly repairs. The cost to repair a vehicle is far less than the cost to purchase a new vehicle. (Lamonica,
Contributing 3 percent to 3.5 percent to the overall Gross Domestic Product, the automotive industry is essential to the United States’ economy.1 The automotive industry would critically affect our national economy if it ceased to exist. In 2008 through 2010, the automotive industry suffered a crisis. Many things lead up to the crisis, putting the economy into an unstable condition and putting distress into the minds of the American people. This forced some of the country’s automakers to go into bankruptcy, causing a fall in the workforce. Eventually, the crisis was solved, and the economy returned to its stable state. This whole disaster started through one event. Fueled by the 2008 recession, the automotive industry suffered a crisis that hurt the United States’ national economy.
Natural resource prices driven by regulative forces external to the automotive industry are another source of uncertainty; 2009 onwards saw spiralling fuel prices, increasing the cost of manufacturing and decreasing demand for vehicles (De Moraes, 2016). Conversely, current oil prices are plummeting. When oil prices were high, consumers purchased economical vehicles. However, lower prices have renewed demand for fuel-inefficient larger cars. These cyclical trends foster demand uncertainties (The Economist, 2014).
For the above reasons, spending in the auto sector in the United States is constantly increasing, as OEMs and auto dealers are continually trying to get an edge and outperform the competition.
BMW Company was founded in 1916. BMW is a German motors, bikes and appliances manufacturers. The headquarter of BMW is in Munich. The slogan of the company is “ultimate driving machine and sheer driving pleasure”. The company produces and market the active cars for the end users.
According to the Ministry of Commerce and Industry, the automobile industry in India has seen a tremendous compound growth at the rate of 22 % between the year 1992 and 1997. Furthermore, the annual turnover of the automobile sector in India, in the financial year 2002-2003, is said to have surpassed the capital investment of Rs 50,000 crore. With Indian automobile corporations gaining international market, the turnover in the similar year was calculated to be Rs. 59,518 crore. The Indian automobile industry will be a standout amongst the leading in the globe. Those business accounts to 7. 1 percentage of the country 's horrible down home item (GDP). Likewise around FY 2014-15, around 31 % of little autos sold comprehensively need aid made over India. The two Wheelers section with 81 percentage business sector allotment is the pioneers of the Indian car business owing with a developing white collar class What 's more an adolescent populace. Moreover, the developing investment of the organizations in exploring those provincial business sectors further helped those development of the division. Those Generally speaking passementerie vehicle (PV) section need 13 percentage business stake. India may be also a conspicuous auto exporter and need solid fare growth desires for those close future. Clinched together with April-January 2016, fares of business Vehicles enrolled a Growth from claiming 18. 36 % through April-January 2015.
To assure the success of a business over a long period of time the business must be able to conduct regular analysis of their success. They must be able to determine where they are today and have a goal of where they would like to see themselves 5-10 years down the road. In order to conduct a true analysis of the company, one must complete an environmental scan of their organization. Thus scanning for events, trends, issues and expectations that they may be faced with in the future. Furthermore, examining all internal and external environment challenges. Internal environmental challenges may be with employees, shareholders or board of directors or the overall culture of the organization. External environmental
An organization is an open system; therefore it interacts with its environment. To manage the relationship with the environment, a large part of strategic planning is concerned. The environmental factors can be divided to 2 main categories, which is MACRO and MICRO .Macro environmental factors seriously affect an organization business practice, profitability and future progress. It can
3. demonstrate and discuss the effective use of some techniques of strategic auditing and environmental analysis as applied to a typical organisation.00
Recent deregulations in the lubricant market have promised many new opportunities for the private lube manufacturers. With the dismantling of Administered Price Mechanism (APM) the burden of subsidies is now being passed on to the government. Private participants will also gain a presence in the Indian oil and gas sector and hence there will be competition between participants that will ensure the growth of the sector. In the next couple of years, the industry is going to witness sea changes. Retail networks, logistics management, and risk management are going to be the crucial factors. The stand-alone refineries will have to be merged with the marketing companies, as they do not have the distribution infrastructure to sell their products in a deregulated market. Companies like Reliance are already selling their products through petrol pumps. The monopoly of the public sector holdings will no longer exist. MNC’s will be able to sell their products through petrol pumps.
The world today, the latest vehicle technology play an important role in making your business more successful and effective of 100 years, technological advances in the automotive sector is growing and significant development. For the automobile industry car companies in Bangladesh go ahead with the speed of all time is used for all types of vehicles. Basically; automotive technology refers to technology that is set up in popular models of cars. With the time change and increased competition, the emergence of sophisticated technologies to pave the way for a car more complex and more.