Impact of Global Competition and Brexit on the Auto-mobile Industry

This report analyzes the key issues of global competition and Brexit and their impact on the auto-mobile industry. It discusses the positive and negative effects on businesses and the challenges faced. The report also includes a PESTLE analysis of the industry.

Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Key Issues...............................................................................................................................3
PESTEL and the two issues affecting the sub-sector.............................................................4
Impact on businesses..............................................................................................................6
Challenges..............................................................................................................................7
Reflection...............................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is referred as integration of both internal as well as external factors
that influence activities and operations of business (Babu, 2012). This includes various elements
such as competitors, change in demography, regulations and so on. The chosen organisation for
this report is Aston Martin which was founded in 1993. It is British manufacture company which
produce grand tourer and luxury sports cars. The headquarter is situated in England, London,
United Kingdom. The main aim of report is to analysing key issues which impact auto-mobile
sector and PESTLE model for identifying issues. The impact on business on both positive as well
as negative way are discussed along with challenging factors which impact firm.
MAIN BODY
Key Issues
It is regarded as highest priority difficulty that impact enterprise in an adverse or negative
way (Belás and et. al., 2015). Each and every industry running their business at marketplace are
facing issues and problems. In context of United Kingdom, auto mobile industry contributes
more than £20.2 billion which add value and £82 billion turnover that play vital role in success
and growth of business. Therefore, these industry is facing different key issues in terms of
Brexit, Emission Woes, electric challenges and so on. The major key issues are mentioned here:
Global Competition
The rise in globalisation leads to develop and improve factors for auto mobile industry.
With enhancement of economic process, there is rise in competition level which is major issues
for auto mobile sectors. The major competitors in auto mobile are Bentley, Land Rover, Rolls
Royce, BMW, Mercedes, Jaguar and so on that is operating their business globally and creating
competition among one another. The various brands are targeting particular market but it is
overlapping due to competition. There is competition among auto mobile in terms of price,
quality, design, technology and others. Therefore, competition is regarded as main key issues for
auto mobile. There is innovation in products such as electric cars and others. It is impacting sub
section of auto mobiles because of high production in terms of light trucks, development in
passenger vehicles, SUVs car and so on for capturing huge market.
Brexit

In UK auto mobile industry organisation are facing warning repeatedly for number of
deal Brexit from EU in 2016 year. There is decline in investors from last two years which was
46.5% in 2017 (Brexit key issues, 2019). British car manufacture depends on elements which are
imported from EU where as other finished cars export to European mainland. If they face
uncertainty for Tariffs then it will lead for bottle neck and delays in developing economic of
United Kingdom. The Brexit is regarded as crucial factors which is creating trouble for UK
sector. There are many organisation which is seeing lowering exports to China and less sales in
Europe. It has impacted auto mobile industry where 1.8 million of new people cars exported
from EU27 to UK in 2018 years which has slow down 85% of imports of cars of UK and 32% of
overall EU27 for car exporting. Here, out of 10, only 8 are manufactured in UK car are exported.
PESTEL and the two issues affecting the sub-sector
PESTLE analysis is defined as tool that helps in monitoring external factors which has
impact upon organisation and their functions (Craig and Campbell, 2012). Auto mobile is multi
million brand which is competing for capturing high market share. UK is manufacturing auto
mobiles from last 10 years. It has manufactured 8 million vehicle, engines and exporting more
than 80% of these to people. PESTLE analysis of auto mobile and their two issues are:
Illustration 1: Car Production
(Source: BREXIT AND THE AUTO INDUSTRY: FACTS AND FIGURES, 2019)

Political Factors- The main factors in this sector is looming which means No deal Brexit
prospect. Brexit is impacting whole industry in both positive as well negative way. There is
decline in investment in particular sector along with reduce in quality which is 46.5% in year
2017. It has impacted sub sector in 2018 where UK passengers car output where whole
production was 1519440 (PESTEL Analysis of Automobile, 2019). There are 1.8 million
passengers vehicles that were exported from EU27 to UK.
Economic Factors- This factors is impacting badly through rise in economic crisis which
has lower sales of auto mobile in developed countries (Epifanova and et. al., 2015.). With
economic factors, there is decline in sales and productivity of industry. The total value of
exporting cars was £34.1 billion to EU which is 37% and quality is 1325868 units to EU 50.7%.
These has impacted industry in both positive and negative manner.
Social Factors- Auto mobile industry is impacted with change in society trends and
preferences of consumers. The manufacturer has adopted such factor in order to fulfils need and
demand of their consumers in best possible manner. With change in social factors, some place
has high demand of SUVs and other has demand of Sedans. There is change in social factors that
impact business in positive as well as negative manner.
Technological Factors- The rise in innovation and technology are considered as
determinants for rise in market share in auto mobile industry (Glova, Sabol and Vajda, 2014).
Organisation which focus on innovation leads to achieve high market share. Major player of auto
mobile focus on doing investment in research and development such as Ford, BMW, and others.
Here, respective organisation focus on investing low emissions and eco friendly vehicles for
users. There are many competitors who focus on manufacturing similar type of products at low
price with use of innovative technology. It leads to increase in electric cars, SUVs and so on.
With this respective organisation can increase their sales and productivity.
Environmental Factors- It includes legislation related with environmental factors to
conduct business activities and operation in proper manner. The major players of auto mobile has
to focus on low emission vehicles. Vehicles which produces low emissions and fuel
consumptions receive subsidiaries for tax and favoured by government. All the auto mobile
industry has to perform pollution test for their vehicles and those who are successful or pass test
are eligible for running their vehicles at marketplace. This helps in reducing pollution for
environment and achievement of goal and objectives.

Legal Factors- This factors impact profitability and brand performance. The
manufacture of vehicles such as cars and selling in global market are liable for following legal
laws related with quality of products and safety in proper manner. There is rise in legalisation
related with pollution and which should be followed strictly by all manufacturing vehicles.
Safety laws and regulations has to be followed by organisation in order to run their business in
proper manner so that they can survive and sustain at marketplace.
In this way, PESTLE analysis has conducted for identification of various issues in terms
of global competition and Brexit and their impact on operations and functions of organisation for
achievement of positive outcomes.
Impact on businesses
The issues has impacted on business in both positive and negative way (Hillary, 2017).
The respective organisation has faced issues and their positive as well as negative impact are
mentioned below:
Positive Impact
The positive impact of issues leads to rise in profitability and productivity of respective
organisation. They are as follows:
Global Competition- The rise in globalisation has positive impact on development and
growth of auto mobile industry at marketplace (Hilton and Platt, 2013). It assist respective
company for performing innovation in their existing goods that leads to rise in sales and cost of
organisation and society focus on moving for innovative products and services. With rise in
global competition, there is enhancement in innovation level and leads organisation for
manufacturing innovative products like low emissions vehicles, electric cars, comfort cars and so
on.
Brexit- Due to Brexit, respective organisation has to depend on World Trade
Organisation rules and regulations that means UK has car producers like Aston Martin car
manufacturer which is 55% of cars having their parts to be sourced at Britain. It is difficult for
them to reach to that level of 55% and warned competitors to face difficulty for surviving.
Therefore, it enhance Aston Martin for providing passenger cars, sport cars exports, total
production and so on.
Negative Impact

The negative impact of issues creates problem for surviving at marketplace. They are
described below:
Global Competition- There are several competitors of auto mobile at international level
such as Jaguar, BMW, Toyota and others which are rival of respective organisation for running
their business activities and operations in an effective and efficient manner (Ji-fan Ren and et.
al., 2017). They focus on manufacturing same types of products at low cost by following same
standards in order to attract their loyal consumers. These leads to minimising profitability and
sales of business from marketplace. Therefore, the competitors focus on manufacturing same
product type which leads consumers to switch from one to another that impact business
negatively for respective organisation.
Brexit- When UK was exits from European, then prices of luxury cars which was
manufactured by Aston Martin leads to decline their sales and profitability. There is fell in share
prices which was 15% which is high loss that was recorded in first annual report. On the other
hand, share prices has reduced by 38% from IPO price i.e. 1900 pence (Brexit negative impact,
2019).
Challenges
In order to carry out assignment, there are several challenges such as IT skills,
researching, time and information management. The major challenges includes IT and
researching which has faced by organisation. There are many employees who work in Aston
Martin possess less IT and researching skills which creates problem for carrying out work in
effective and efficient manner (Savrul, Incekara and Sener, 2014). In order to collect data
through online source, IT skills is required and complete it through by entering into system
which is lacked by many employees who were working in enterprise. Similarly, other challenges
was in term of researching, employees working in respective organisation are less efficient in
collecting data and information required in business. These challenges create problem in
achievement of business goal and objectives. In order to overcome such issues, respective
organisation has to conduct training and development session for their employees so that they
can work in positive manner. For IT skills, they have to provide online courses related with
technical skills, Java, data analytics so that they can improve themselves in proper manner. This
leads employees to do proper work related with IT in order to grab various opportunities required
for business. Similarly, for overcoming challenges of researching the working force has to take

classes related with research work, participating in activities of research to learn more and solve
the arise issues in organisation. In this way, organisation has to overcome challenges by taking
various classes, course, coaching and others.
Reflection
While carrying this project work, I have faced several issues but of them two were major
issues that I have incurred such as limited time period and data collection with help of secondary
sources and information. I have used secondary data collection method in order to collect
appropriate information to reach to conclusion with help of journals, newspaper, books, website
and so on. Similarly, I have problem for limited time as it required proper time to collect
accurate data and information in an effective manner. As task was assigned to me so I have
solved such issues by taking help of website and others and reach to conclusion within given
time period.
CONCLUSION
The above report concluded that business environment is important for organisation to
analyse as internal and external factors which has impact on firm can helps for developing
realistic plan and policies for better outcomes. This is helpful to identify opportunities and
threats of business. Within auto mobile industry, various issues has been faced in terms of global
competition, Brexit, change in demand and others that impact business in both positive as well as
negative manner. International competition leads to enhancement of innovation level which
provide outcomes for maximisation of sales and profits. There is also reduction of customer
loyalty due to global competition at marketplace.

REFERENCES
Books and Journals
Babu, K. V. S. N., 2012. Business intelligence: Concepts, components, techniques and
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Belás, J. and et. al., 2015. The business environment of small and medium-sized enterprises in
selected regions of the Czech Republic and Slovakia. E+ M Ekonomie a Management.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Epifanova, T. V. and et. al., 2015. Modernization of institutional environment of
entrepreneurship in Russia for development of innovation initiative in small business
structures.
Glova, J., Sabol, T. and Vajda, V., 2014. Business models for the internet of things
environment. Procedia Economics and Finance. 15. pp.1122-1129.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Hilton, R. W. and Platt, D. E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Ji-fan Ren, S. and et. al., 2017. Modelling quality dynamics, business value and firm
performance in a big data analytics environment. International Journal of Production
Research. 55(17). pp.5011-5026.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences. 150.
pp.35-45.
Sena Ferreira, P. and et. al., 2012. Framework for performance measurement and management in
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Online
BREXIT AND THE AUTO INDUSTRY: FACTS AND FIGURES. 2019. [Online]. Available
Through:<https://www.acea.be/uploads/news_documents/Brexit
facts_figures_March_2019.pdf>
Brexit key issues. 2019. [Online]. Available Through:<https://www.bbc.com/news/business-
48545733>.
Brexit negative impact. 2019. [Online]. Available
Through:<https://www.cnbc.com/2019/02/28/a-no-deal-brexit-is-already-happening-
for-us-aston-martin-ceo-says.html>
PESTEL Analysis of Automobile. 2019. [Online]. Available Through:
<https://www.marketingtutor.net/global-automotive-industry-pestle-analysis/>