The Global Car Industry-An Analysis of Macro Environment, from the Case study by Nick Potter

3200 WordsMar 19, 200513 Pages
The car industry environment is very complex due to the large number of product markets, buyers, suppliers and customers, which spread across the globe. As such, it has often been described as "the industry of all industries". There are various forces that influence this environment. Hence, this report analyzes some of the political, economic, socio-cultural and technological trends, key to understanding their impact on the industry, with particular reference to the Western European market. First, the macro environment is analysed to point out some of the major impacts in the entire industry, revealing political and technological forces to be the driving forces of the industry. This is then followed by a competitive analysis of segments…show more content…
Technology has also brought about many functional changes such as improvement of engine system that help reduce pollution and smart cards implanted in engine management that are capable of measuring the quantity of pollutants. The result can then be used to prepare individual tax bills. Another development has been the use of road-side sensors. These can be used for levying toll for road use during heavy congestion. This raises several questions for the industry. What impact will such legislation have, if it comes into effect? Will it discourage consumers to purchase new vehicles and rely on public transport or car-pooling? Also, the advent robots in assembling functions, is affecting the cost advantage of companies relocating to low labour cost areas, since there is very little cost differentiation. Another important issue has been fuel-source. In the future, companies need to invest in technologies to find new sources of fuel or on improving the aerodynamics of cars to reduce the fuel consumption. Many companies are working on small electrical cars or trying to find some substitutes for petrol like Soya oil. In addition, companies will also have to invest in technologies for reducing the fuel wastage due to evaporation during the refuelling process. Similarly, the governmental policies on 'green issues' and recycling of

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