Environmental Analysis of the Impact of the Pandemic on the Auto-mobile Industry

This report analyzes the impact of the pandemic on the auto-mobile industry and develops success and survival factors for the industry with consideration to mega trends. It discusses various models and frameworks that help the industry towards succession in the future. The report also includes a Porter diamond model, value chain analysis, PESTEL analysis, and the role of the government.

Assessment 2 Environmental
Analysis of an industry

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Impact of the pandemic on the Auto mobile industry..................................................................3
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Environmental analysis is exercise or study done for having access about the current
industry analysis. This report analyse impacts of pandemic on auto mobile industry and also,
develop success band survival factor for the industry with the consideration to mega trends. This
report also discusses the various model or framework that helps the industry towards succession
in the future.
MAIN BODY
Impact of the pandemic on the Auto mobile industry
The pandemic that induced about lock down result and shutting down production at
original equipment. It might be also led with the disruption to the entire value chain of having the
major automotive industries in various countries. Therefore, negatively affected towards the
production of auto spare and having micro, small and medium industries around the world. In
addition, the reduction about the consumer demand vehicles to loss the revenue and serve the
crisis in sector. auto-mobile industry, this could be seemed that many negative registered about
the growth in sales of vehicle categories with the huge decline rate 19.77% fall in sales of
Commercial vehicles and fall in sales of their four wheelers. The largest car maker Tesla, Toyota
cut temporary employee by 5% and following the drop of car (Understanding COVID-19’s
impact on the automotive sector, 2019). The auto sectors which contribute more about facing
year-on-year decline more than their 25% some recent months.
This could be seemed that auto-mobile industry which have certainly the hardest hit
during the covid-19 and eagerly seeking more inventory to sell. Usage for sharing mobility
services and also permits transit about how the regions and the employers which can accept the
practitioners of working from home and recovering slowly. The auto-mobile industry which
seems to be highly impacts on economics and anticipated future behaviour as economics which
find out the best next normal. This also shown about 51% global respondents still state about
they intend to travel less before the covid-19. However, this could be seemed that mobility which
is picking with having the gradually and at different rates and fastest recovery in some countries
(Radic, Radic and Stevanovic, 2020). This seems that UK cars production in UK have been
declined with huge percentage -28.4% and production for the UK overseas the market that
declines about 10 cars still head abroad. Along with this working with many new concepts which
can also keep the industry for working with some better strategies. While the covid-19 crisis

impacts vary from one country to another country and increasing poverty and inequalities.
Assessing more about the impacts of the ongoing pandemic and economies societies which is
one of the fundamental steps forwards the adequate response which help in different societies for
recovering from the growing pandemic. The negative trends which have been spread likely
continue, forecast while having positive and ensure them for working with some better strategies.
In present time, automotive industry which seems to be requires the strategies for keeping their
customer and working with some profit rather than some previous years. In other word,
pandemic has major; impact on global automotive industry fuelled that parts exporters and
manufacturing parts which are closure in parts.
The auto-mobile industry during and after covid-19
Industry is suffering more from financially even before and in running crisis, the world
has also stuck by the covid-19 pandemic. In simple word the negative effect have been overcome
on the auto-mobile industry and which have taken some major loss for various organizations.
Germany, Japan was the major producer and claiming more on top spot. According to research,
decreases in sales around within 12% which being expected in month to come (Wu, Zhang and
Du, 2021). The negative impacts have badly on employee who is working within their
organization. After the covid-19, the government have also taken some major steps through
which they can easily keep developing auto-mobile industry for being more developed. To most
reports, the automotive industry value will be increase by around millions in eight year from now
and this might be also leaded them for working with some better estimated sources.
The role of government.
According to norms, industry which required for understanding about section of
commuters, as in which they cannot make use of public transportation. Along with this will also
lead to having the higher demand for personal vehicles and especially for the two-wheelers and
affordable four wheelers. The recovering stages, manufacturing expert government to ease
emission but that could not have better option through which government is being comfortable.
Succession towards the future in automotive industry.
For instance, UK government which have to set goals and better option so that, industry
can adopt some new technology. As many of the government which is trying to push their
consumer for buying electric vehicles for long time emission laws (Zulkifli, Yazid and
Shamsudin, 2020). To encourage the people, many of banks have also taken some right steps,

keeping down interest rates loans by three months. Apart from these, the automotive industry and
dealership will likely to continue in providing incentives to their workforce and other offer to
increase their working system and make sure for buying the vehicles with having low interest
rates from the various banks. This could also be an opportunity to increase more about
autonomous vehicles that could keep people practice towards the social distancing (Atrill, 2017).
In addition, auto-mobile industry which try to improve suppliers, using machine learning tools.
Along with this big data analysis that will keep the efficiency of supply chain which seems to be
does not suffer and likely due to having covid-19 and production can be received quickly.
Research and development department, learnt from the pandemic will pave some new ideas and
research that could set out some new standards in industry for the years to come.
Porter diamond model
This focus on explaining why some certain industries have their specific nation within the
competitive internationally (Yan and et.al.,2020). Auto mobile industry that could have the
ability to complete in international area which is based on mainly interrelated set of location
advantage that can certain towards the different nation poses.
Firm strategies, rivalry and structure-
In context within national companies in pandmic that operate within the largely
determine about how the companies that have been created and managed. For example, auto
mobile industry, in various countries' rivalry between players such as. Toyota, Subaru, Nissan
etc. because they have their own fierce competition, and they have also become able to make
more foreign market.
Factor condition-
This refers to the factor condition of certain country to the human resources, capital and
natural available. Auto mobile, in pandemic can hire skilled labour force, good infrastructure and
scientific having about their knowledge base (Yang, 2021). This could also help the organization
from their impacts factor in organization and creating more specialized factor and continually
work for upgrade them.
Demand condition-
A large market means having more challenges, but also creating huge opportunity to
grow and become better organization. In auto mobile industries the local customer which gives
clearer or earlier picture of emerging buyer needs and demanding customer pressure companies

to innovate more ideas in present situation (covid-19) and achieve the sustainable competitive
advantage.
Related and supporting industries-
Especially more about the suppliers that can crucial to enhancing innovation through
having some efficient and higher quality, timely, feedback and short lines of communication. In
recent time, auto-mobile have lesser competition and it also often to take hard work and globally
competitive within the assist domestic companies.
Government-
In the second wave, government which play the huge role and this sector which must
continue about strive and increasing more production and their sales (Strauch, Carter and Homer-
Dixon, 2020). The government which have efforts more employee that can be vaccinated in the
industries and make their premises more notable.
Chance-
It includes about the random events and fundamental scientific break thoughts occur.
Some firms which may gain the competitive position while other may lose (Worthington, 2006).
While such kind of factor that cannot be changes, and they should not be monitored as make
decision necessary to adapt to changing over their market condition.
Value chain analysis.
Inbound logistics, at the first step of raw material are received from the suppliers. In
present time, raw material of the industry are scattered from over all world and distributed
among the manufacturing units as per their requirements. Operation management, it is basically
the process of converting about the raw material into their auto parts. Due to pandemic, operation
department which help the auto mobile industry for saving their costs relate to manufacturing
and make their strategy to developing regional markets. Outbound logistics, it is the process in
auto mobile in which final goods and that moved out with manufacturing units to their retailers
(Ojha, Mathew and Venkatesh, 2021). Marketing and sales, this helps the industries for
promoting their vehicles producing by using advertising, distribution and sales force
management. The auto-mobile companies, in pandemic need to spend lots on marketing and
advertising of their brands through having the traditional and their online channels that can be
increased with having huge competition. Services, it includes support after the sales of products.

Support activities that also ensure for having customer retention. For succession, auto-mobile
companies that could keep their better brand images and the high number of retained customer.
Porter five forces
It is way of examining the attractiveness of industry. Along with this also try to look at
five forces which is act for the industry.
Threat of new entrants-
In the auto mobile industry, generally threat for new entrants is low. Factors that can be
examined about how the threats can include an upfront the capital requirements, brand equity etc
(Rajora,2021). The industries that follow up legislation, ability for more distribute products for
developing their brands images.
Bargaining power of buyer-
In 2019, UK dealers were great dealer to buy and get their industry for moving forward.
While buyer purchase usually have good factor in determining this forces and also even the
automotive industry where the buyer usually purchase the new car. Due to pandemic, various
countries that creating more favourable situation from the auto-mobile industry but not from
their buyers.
Threat of substitute products-
If buyer that can look for more competition or some other comparable products, this can
easily switch with having the high threat in the force. This could be seemed that when the new
cars switching it has the high cost and because, they sell new car for same price as they paid for
it (Vedavyas, 2020). For the auto-mobile industry, in covid-19 products differentiation which is
Illustration 1: value chain network of Auto motive industry

also important and typically there are many cars which similar look as mid range of Toyota and
easily can be found out in Nissan, Mazda and so on.
Bargaining power of suppliers-
In car industry which refers to all suppliers of components, electronics and even more
about assembly the workers (Johnson, 2017). This is also seems that most suppliers in UK are at
small firms who rely on the car maker, and they have one car maker as customer. So, these
forces that can evaluate the tricky to developed and keep their better market position.
Competitive rivalry-
As most countries seems to be car maker and engaged with having the fierce competition
(Antipin and Ilyashevich, 2021). It could be also determined with having the ad campaigns,
product development and also keep them to edge of the profitability and innovation.
PESTEL analysis
Political-
In most countries, government that have main issues towards the regulation of production
parts that ensure for safety of passengers. The company due to having covid-19s which is
spending more time on test running before launching the cost at time (Furcher, 2021). They are
also depends more on the government decision towards export and imports.
Economic-
The automotive industry which is being highly suffering from the pandemic even before
from covid-19, due to having less or lack of financial terms. Major drop out with having huge
percentage and many production plants in many countries have been closed. From this, many
employees have become jobless and biggest fall in vehicle production in world.
Social-
Auto-mobile industries which are need to consider the choice of people while
manufacturing any new car, otherwise, that can go out of fashion and may not have good sale (Li
And et.al., 2021). From this, culture and tendency of communities that can be affect and there is
also tendency for developing countries to possess one or more cars.
Technology-
For working with better future growth the auto-mobile industry need to work with more
digital, rising more interest in electric vehicles and keeping work from home standards. They

also required for working with some strategies and existing supply chain model and industry as
whole for working.
Environmental-
An emission from the vehicles that can cause the environmentalists and government. For
this the organization can make use of manufacturing battery-electric car which helps for
decreasing the rate of emission (Whittington, 2020). This should be about more units in market if
only it can pass the pollution tests.
Legal-
Many countries which is being required to decrease the number of vehicles, so that can
help them for lower air pollution (Muthukrishnan, 2020). The company should also take care
about the environmental and tax laws. If they fall, the company may get banned in country.
CONCLUSION
From the above report it had been concluded that, huge impacts of pandemic on
automotive industry and this could create the vast difference between their profits and sales. This
could be also analysed that porter value diamond in which the industry come to know about their
working position. PESTEL analysis which discussed the external environmental of industry and
ensure them for working with some better strategies.

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