Key Issues in the Auto-mobile Sector

This report discusses the key issues faced by the auto-mobile sector, including the decrease in vehicle purchases by millennials and the need for continuous innovation. It also explores the impact of these issues on Roots Motor Limited and the challenges faced in preparing the report.

Auto-mobile
Sub-sector

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Key issues of Auto mobile sector............................................................................................1
2. PESTLE Model.......................................................................................................................2
3. Impact of key issues................................................................................................................3
4. Two challenges face by me and overcame while preparing the report...................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
A business environment is a set of element where consist of internal and external factors
like staff members, customer needs, supply and demand etc. These factors influence the function
of the business and impact in direct and indirect manner. It can be split in both a macro and
micro environment depended on the perspective (Hwang, 2016). Sum of these factors affect on
the business organisation environment and companies situation. To understand the concept of the
report selected organisation Roots Motor Limited which is British auto-mobile manufacturer and
major motor distribution and dealers businesses. It was established in 1913 by William and
Reginald Rootes. This report consist of issues of auto mobile sector, using PESTLE model to
explain reason. Along with define the impact of issues on the business and challenges.
MAIN BODY
1. Key issues of Auto mobile sector
The auto mobile sector is broad part of the UK economy where different types
organisations manufacturing of car and employed about 186000 people directly in excess of
856000. There are companies facing different types of issues that impact on the performance and
efficiency. Roots Motor Limited is part of auto mobile industry and manufacture cars and
corporate vehicles. In UK different types of issues faced by the automotive industry such as
innovation, customer preference, delay in payments, engine capacity etc. But the major issues as
well as problems that are faced by the automotive sub sector are continuous innovation and
decrease in number of vehicles purchased by millennials that highly affect on the business of the
industry in positive and negative manner (Gopalakrishnan, 2017). This industry face major
issues that affect in direct manner such as:
 Decrease in number of vehicles purchased by millennials: The major issue face by the
Automotive industry that millennials (aged 18 to 34) are not taking interest to buy
vehicles so demand decrease by 30% and the percentage without cars continuous to grow.
It is increasing because people like to live on their smartphones. They are checking 43
times a day their smart phones that impact on the automotive industry. Due to decrease of
demand that affect to business performance that under cover in the automotive industry.
The manufacturer different market analysis strategy to know the reason of decreasing
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demand such as market research, survey and other to monitor the changes of demand of
millennials. Now people mainly prefer to smart phone rather than to vehicles.
 Continuous innovation: There is highest connectivity and technology embedded within
the cars In present time new businesses carry out new technology and attract people to
buy their product. As a result other businesses face challenges and impact on the business
performance. It will create risk, stagnating demands, cost pressure, competition and
legislation that impact on the innovation management (Rabieh, Modarres and Azar,
2018). Due to come new model and technology of the vehicle, people demand for new
vehicles as a result old model demand decrease and business face loss. In present time
UK government announce to manufacture environment friendly car that does not impact
in negative manner on the environment. It is not possible for every business but many
business easily manufacture and take high cost from the customer. Through continuous
innovation some business fall down and face many problems.
2. PESTLE Model
PESTLE Analysis: It is a set framework that apply the business or industry to analysis
external factors that impact on the position of the organisation. This analysis provides HR
practitioners insight into the external factors affecting their organisation. There are consisting of
the different factors such as political, economical, legal and many others. There is applied
PESTLE model in the context of automotive industry Political: In this factor includes different factors such as trading laws, labour laws,
foreign trade laws, tax policy, political stability and many other that impact on the
business performance and other areas. If the tax policy & political stability of the nation
is good so people easily invest into automotive industry and affects to profitability of the
business in positive manner (Yamarik, 2018). Economical: It is external factor that impact on the industry due to different elements like
exchange rate, interest rate, economic growth, inflation rate and others. Such as decrease
interest of the millennials to purchase vehicle that impact on the economic condition of
the business and does not get grow. For instance if nation provide money on low interest
rate so it will impact on the business of Roots Motor Limited in positive manner. Social: The fluctuations in the atmosphere shows that the demographic characteristics,
taste & preferences of people, culture, trends. For example when changes are happened
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that time demand of the product decrease. Such as millennials interest increase for smart
phone that impact on the automotive industry negatively. So needs and demand influence
to business profitability in negative manner and fall down (Mathiyazhagan, Sudhakar and
Bhalotia, 2018). Technological: It is another external factor that define those factors which relates to
technology innovation in the product & production procedure, distribution & promotional
techniques. Such as, if the different types of companies of the automotive sector apply
continuous innovation so it will impact on the product demand. The companies use
technology of self driving car, environmentally car that impact on the other medium type
of companies that are not able to apply innovation. As a result it will impact on the
business negatively. Legal: It is important factor that require to follow by the every organisation where consist
of rules & regulations, laws and regulations that developed by the Government for
automotive industry and require to follow by the companies (Park, Lim and Cho, 2018).
On the basis of these laws organisation effective conduct activities and survive in the
market without any problem. If the company will not follow all the rules and laws such as
equal pay, equality law to staff members so who are working on the same position then
unfavourably impact on the business negatively.
 Environmental: In this factor consist of different environmental aspects ecological and
environmental such as climate, weather and environmental laws that impact on the
environment. Such as if the companies of the automotive industry will not follow all the
laws such as pollution act, carbon emission and others then if unfavourably impact on the
business activities negatively. If Roots Motor Limited will not effectively adopt the
pollution acts that impact on the atmosphere sue to establish in a society so this affect on
the continuity and develop negative affect on the business (Li, Kong and Zhang, M.,
2016).
3. Impact of key issues
The issues of the auto mobile industry impact on the business in direct manner that define
into positive as well as negative manner. There are defined favourably and unfavourably impact
on the Roots motor limited such as:
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a) Positive impact on Roots Motor Limited: Due to increase innovation in the
Automotive industry impact in the positive manner on the Roots Motor Limited. Because
company get new ideas regarding to innovation and easily attract to customers for purchase their
vehicles. Innovation and creation are terms of the increase productivity and profitability.
Innovation procedure take long time but help to selected organisation to become leading
company in auto motive sector and every organisation follow them. For innovation they are
manufacturing to environmentally car for people so UK government also support to organisation
and easily provide fund for the innovation procedure (Sharma, Sachdeva and Gupta, 2017). In
present time mostly people prefer to eco friendly products that can not harm to environment so it
is good chance for the company to generate more profitability. Such as continuous innovations is
good for the business because it provides new ideas to apply on the business and help to prepare
promotional and business strategy to attract customers.
b) Negative impact on Roots Motor Limited: Decrease in number of vehicles
purchased by millennials show negative impact on the business. Mostly young people like to
operate smart phones so they will not focus on the vehicles and use public transports rather than
to private transports. As a result decrease demand of vehicles and shows negative impact on the
performance of Roots Motor Limited. For this require to develop effective promotional strategies
that impact on the profitability. Purchase of vehicle decreasing is negative for the business
because it decrease sales and revenues. As a result it directly impact on the business activities.
4. Two challenges face by me and overcame while preparing the report
To prepare of the report I am facing several problems to identify the issues of the auto
motive sector. In this industry not define any particular issues that easily find out. After more
research identify the key issues of the industry that impact on the organisation in positive as well
as negative manner. To know the reason of issues conduct deep research and know particular
reason that impact on the business (Sinha, Mondal, Boone and Ganeshan, 2017). There are
defining main challenge that face by me to prepare of this report:
 Difficulties with information collection: At the starting of the research I am not getting
information about the industry and face the problem to identify the major issues. After
more research identify the issues of the auto motive sector. After recognition face the
problem of lack of information that easily do not collect by me. For this require to more
time and asking to different types of people who are working in the particular industry.
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Due to lack of information I am not recognised how to collect all types of information
that requires for the preparing project report.
 Lack of experience: I have no experience about the industry so I have no idea how to
start research on the particular industry. Which type of sources are helping to collect
information about the project. In the starting of the research I feel down due to have not
experience about the automotive industry. On the basis of sufficient experience explore
the information and take too much time to gain all the possible information about the
project report (Knobloch, Zimmermann and Gößling-Reisemann, 2018) .
Ways to overcome from the challenges:
 I will take help from my friends who have already knowledge about the sector.
 To start job ion the automotive sector to know how to people work and which type
problem they face that impact on the organisation.
 Contact to different types of people who have knowledge about the project and know
how top handle it.
 Conduct research in deep manner to collect all the relevant information that relates to
may project report.
 During to my job identify the all the reasons that impact in positive and negative manner.
 Conduct PESTLE analysis that provides information about the factors that belongs to
external activities (Ohashi and Toyama, 2017).
CONCLUSION
As per the above discussion it is understanding that business environment is important
part of any organisation that impact on the business activities positively as well as negatively. In
this environment different types of industries involved such as automotive, foot wear, house hold
and many others. The automotive industries face many issues that impact on the performance of
the organisation. For this require to apply effective strategies that attract customer to purchase
vehicle. To analysis the issues apply PESTLE model that provides proper information about the
factors that impact on the organisation effectively. These issues impact on the organisation
performance in positive as well as negative manner.
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REFERENCES
Books and Journal
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the Automobile Industry. Journal of the Korea Academia-Industrial cooperation
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Market. International Journal for Advance Research and Development. 2(5). pp.166-
171.
Rabieh, M., Modarres, M. and Azar, A., 2018. Robust-fuzzy model for supplier selection under
uncertainty: An application to the automobile industry. Scientia Iranica. 25(4). pp.2297-
2311.
Yamarik, S., 2018. The automobile industry and new trade theory: A classroom experiment. The
Journal of Economic Education, 49(3), pp.252-259.
Mathiyazhagan, K., Sudhakar, S. and Bhalotia, A., 2018. Modeling the criteria for selection of
suppliers towards green aspect: a case in Indian automobile industry. Opsearch. 55(1).
pp.65-84.
Li, Y. S., Kong, X. X. and Zhang, M., 2016. Industrial upgrading in global production networks:
the case of the Chinese automotive industry. Asia Pacific Business Review. 22(1).
pp.21-37.
Sharma, R., Sachdeva, A. and Gupta, A., 2017. Commonality Amongst Various Lean
Manufacturing Techniques: An Investigation in the Indian Automobile Industry. IUP
Journal of Operations Management. 16(2).
Knobloch, V., Zimmermann, T. and Gößling-Reisemann, S., 2018. From criticality to
vulnerability of resource supply: The case of the automobile industry. Resources,
Conservation and Recycling. 138. pp.272-282.
Sinha, A., Mondal, S., Boone, T. and Ganeshan, R., 2017. Analysis of issues controlling the
feasibility of automobile remanufacturing business in India. International Journal of
Services and Operations Management. 26(4). pp.459-475.
Ohashi, H. and Toyama, Y., 2017. The effects of domestic merger on exports: A case study of
the 1998 Korean automobile industry. Journal of International Economics. 107. pp.147-
164.
Park, E., Lim, J. and Cho, Y., 2018. Understanding the emergence and social acceptance of
electric vehicles as next-generation models for the automobile industry. Sustainability.
10(3). p.662.
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