PEST analysis
The automotive industry was launched in 1890 when the technology was at the stage of combining the steam engine and road cars after long efforts of decades and car production commercially in the United States and Europe but was in the early 1900s when car sales have seen first boom France dominated the auto industry in the first arrow and has become the largest manufacturer and exporter of automobile one of the biggest reason for the domination the automotive industry of France hesitated other countries to invest in the automotive sector at that time but the great Britain and Germany have exceeded the position of France as the largest car producer and exporter during the economic downturn in 1908 in the United States also followed the trend and also began producing automobiles France and Germany remained the largest manufac cant exporter of automobiles to 1980 automotive originally manufactured to meet the upper middle class has become need of every house hold in the 1980s Hillary 2015 automotive technology kept changing and there had to produce auto race at the lowest possible cost to make it affordable for the middle class.
Today's cars are safer, sustainable, practical and cheaper than in the past, the automotive industry is currently entering a new era of technical innovation by producing intelligent and less auto driver auto industry like any other industry is affected by environmental factors such as macro political, economic, social, technological, legal, and environmental analysis of these factors can help businesses develop appropriate strategies to minimize the effects of these factors on Campbell business Craig, 2005.
The automobile manufactures in developing countries are under constant pressure by the government to make more affordable car for the common man, despite the increase in the automotive sector costs was great source of revenue for governments across the world that has made it difficult for the automaker to remain globally competitive.
Also the increase of the middle class in developing countries has led to increased demand for automobiles but political instability and corruption was big obstacle for automobile factory that made the car manufacturer to avoid invest in these countries despite the growing demand Kochhar, resulting in open access to other markets, which resulted in both opportunities and challenges for automakers challenges in terms of competition and opportunity the term access to major markets Campbell Craig, 2005.
The automotive industry is strongly affected by the economic situation has been several economic crises in the past and each negatively affected auto sales especially in countries growing level of income but developed worldwide particularly in developing countries has led to stimulate auto sales Sivak, 2009 While car sales in developed countries stagnate like most people there already have cars but innovations in the automotive industry may boost sales of automobiles again in developed countries.
The automotive industry has revolutionized the automotive entire society that were originally produced for the upper class now has become need every one of the hundreds of thousands of people worldwide are involved in the auto business, it changed our life in many auto industry respects played a vital role in the progress and growth of economies worldwide.
Automobiles are now an important part of society, however in developed countries have now started to believe that automobiles have negatively affected their health and the environment Booze, 2015 This why people in the United States and Europe are turning to healthier alternatives such cycles to travel short and medium distance.
Cars went through different stages of innovation since the first produced As customers are becoming increasingly aware of the technology they expect automakers to equip cars with the latest accessories and features that became one of the biggest challenge for automakers with some companies are experimenting with smart, driverless and flying cars, it became difficult for automakers to keep pace with technological advances another factor affecting the automotive industry is the Internet, customers are now aware of the latest technological innovations in the automotive industry through the internet and it has become difficult for the automaker to not follow global trends Sivak 2009.
Automotive safety was the biggest concern for legislators in the world Therefore, it was global trend of imposing different rules, regulations and quality standards for automobiles Car manufacturers are constantly under pressure to meet these rules, regulations and laws Moreover, there are different laws in different countries that does not allow manufacturers to raise prices without the approval of govt making them difficult sometimes to work in these countries Although the automotive sector in developing countries is growing rapidly, but most of these countries have laws related to automotive that make it difficult for new companies to start business in these countries.
Automobile sector is concerned as the biggest culprit that is damaging to the environment with increased knowledge of environmental problem customers are concerned about the automotive environment effects Booze 2015 Consequently car manufacturers began produce environmental Fridley cars, but the market share of these cars is very less, however, in the future, there will be a growing demand for automobiles environmentally.
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