Environmental Analysis of COVID-19 Impact on Aston Martin in Automobile Industry

This report analyzes the impact of COVID-19 on Aston Martin in the automobile industry and develops survival and success factors for the industry with consideration to megatrends. It discusses the impact on employment, autonomous vehicles, decrease in income, and financial crises. The report also suggests skills required for organizations to develop and the shift in consumer behavior. The conclusion highlights the decrease in demand for luxury cars and the need for the automobile industry to navigate in a new normal.

2 Environmental
Analysis of an
industry
management

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................2
Analysing the impact of the pandemic on the industry and develop survival and success
factors for the industry with consideration to megatrends.....................................................2
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Environmental analysis is referred to a strategic tool which includes several activities such
as identifying internal and external elements of environment which affect the operations and
performance of our business. The Chosen organisation for this report is Aston Martin which is a
a British independent Sports Car manufacturing organization having headquarter in England,
United Kingdom. It was founded by Lionel Martin in 1913. This company comes under the
industry of automobile which leads to the involvement in manufacturing designing along with
the marketing. COVID-19 pandemic effect the entire economy which include all the business
organizations of several industries. This instability in the economy of world implies effect on
each and every business organization. This report deals with the impact of pandemic on the
automobile industry along with the developing the survival and success factors for the same.
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MAIN BODY
Analysing the impact of the pandemic on the industry and develop survival and success factors
for the industry with consideration to megatrends.
It is very difficult to analyse the answer of question when the things are going to back to normal.
COVID-19 course several of shake ips for automobile industry which of factor the every
operation from supply chain to Capital spending loans along with the long term strategies.
COVID-19 pandemic result in the completely shutting down of production at original equipment
manufacturer. It is related to the disruption of the entire value chain of major industries all over
the world (Marimuthu and et. al., 2021). Below mentioned are the some ways under which the
pandemic has a impacted the automobile industry directly or indirectly for long term projection:
 Employment impact: The most remarkable impact of COVID on automobile industry is
the economic impact. The management of Aston Martin start cutting purpose of
employees and accepting the short end work schedules as the company is moving
towards the bankruptcy. Some of their employees I returned to the work but many of
them are still expecting to return eventually. It implies that a huge number of workers are
still waiting to get the call of returning to work (Pai 2021). Due to the adoption of
electrification, mechanical engineer was already eliminated from the organisation and
new openings for Electrical chemical and software engineers how been issued.
 Fall of autonomous vehicles: When the employer of automobile industry were forced for
computing the project of capital because of major economic impact of COVID-19.
Autonomous vehicles pathology take a back step to other processing advancement like as
electric vehicles. 3 or 4 vehicles have been previously targeted for as early as 2022 but
now they have been pushed back to the several years. The major reason of this delayed
timeline is the financial fallout of COVID (Li and et. al., 2021). Its presents are highly
complex as compared to the previously expected. It is stated that audience have to wait
for many more years to see that driverless vehicle technology on the road.
 Decrease in the income of people: Due to lock down, people get more unemployed
which result in the increase in unemployment rate of the country. It result in the decrease
in purchasing power of people as they do not have much money to spend on luxury items.
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They are just spending their money on survival. Decrease in the purchasing power of
customers result in the less demand of cars as the people do not have money to buy them.
Financial Crises: During the COVID-19 pandemic, the share market was close the along with
the manufacturing of cars. This result in the financial crisis of the organisation. The car
manufacturing companies do not have a sufficient amount of finance to continue production just
after the pandemic. They are required to collect finance as well. During the covid-19 of issues
regarding the financer (Gupta and et. al., 2021). Hence, it is also a challenge for the organisation
to arrange the finance just after the covid-19 pandemic so that they can continue manufacture
cars. It is really a huge challenge for the organisation. They also fired almost more than 500
employees of their organisation.
In order to coming out from this critical situation the organisation is required to develop survival
and successful factors for the industry which is related to the growth of organisation. It has been
founded at the situations are getting normal which also result in the end of struggling period of
organisations of automobile industry. As the things are getting normal the demand of cars is also
increasing (KM 2021). COVID-19 is a infection which spread by breath. People are getting more
health conscious and they are shifting to their own vehicles from public vehicles. They don't
want to use public vehicles as they have fear of COVID-19. It is a survivor and success factor for
the automobile industry. Increase in the demand of products of automobile industry result in the
creation of employment in the organisation. It may also lead to the improvement of employment
rate.
Before COVID pandemic, the automobile industry was bracing for a difficult year. But after
pandemic, the industry is facing concern on both long term growth as well as short term
liquidity. One of its effect can be consider as going digital. People are giving preference to the
contact less transaction. Hence it is a major trend which also reflect in the purchase of
automobile as well.
After COVID the automobile industry is required to navigate in a new normal (Chewpreecha and
et. al., 2021). Some of the possible scenarios and impacted areas are given below:
 Decrease in the demand of automobile products put the huge pressure on the producers
for revenue and profitability.
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 Arranging liquidity in an effort continuing performing the operations may renounce R&D
or any other initiatives Technology.
 Supply chain is considered to be a very Central issue for the leaders of C- level.
 Creates the situation offer challenging financial scenario because of increase in M&A
activities.
One more important impact of COVID-19 is the the reduction in physical customer interactions
at dealership, auto shows and many more. It may be because of necessary rules and regulations
or by choice (Anugerah and et. al.,., 2021). It leads to the increase in demand of engaging with
the customers through the use of any digital medium. Aston Martin is required to spend more on
digital marketing platforms and processes so that they can accelerate their production. Many of
Other industries such as banking or e commerce have already been higher up their presence on
various digital platforms.
Due to COVID, the consumption behaviour of customers may be shifted to a new normal. It is
because many of people continue work from home which result in avoiding large gatherings and
events which require less automobile products. Due to the possible health and safety concerns,
the shared mobility and carpooling demand also result in the degree ment. While making
purchasing decisions, environmental impact pleasure important role. Understanding all these
factors of consumer behaviour creates a very difficult task for employer to personalize the
journey for customer solution (Pawar and et. al., 2022).
Aston Martin cut off more than 500 jobs because of less demand of luxury cars due to the
COVID-19 pandemic. The lockdown imposed by the government across the Europe forces the
organisation to close their factories and showrooms which result in stocking the buyers at home.
It result in completely stop in the demand of cars. It also cause a loss of 119 million pounds
when the sales dropped suddenly. All the companies in the automobile industry has been
working with their employees for the purpose of developing and implementing the protocols in
order to protecting the employees health and safety while facilitating production. Now almost all
the dealers are open to assist most enquiries. They also extended the warranty because of
lockdown. If the warranty of new car was due to expire from 14th March 30th June 2020, it's
warranty has been extended until 30th June 2020 (Ando and et. al., 2021). This act of
organisation at Aston Martin result in higher expenses. But it is founded at it was necessary to
extend the warranty for the purpose of maintaining the loyalty and interest of customers towards
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the organisation. Sales of cars has been decreased by 74℅ to 86%. This decrement in the sales of
cars cause a huge amount of loss to the automobile industry. Hence, the employer tried each and
every practice to coming out of this loss. It is the result that the companies fired their employees.
It has been found that there are some skills which are required by the organizations to
develop in themselves as it help them in performing the business operations in an effective and
efficient manner because after the COVID-19 pandemic, it is getting difficult for business
organizations to perform the operations in an emerging manner. Some of skills are leadership,
flexibility and adaptability, critical thinking, tech savvy, communication and emotional
intelligence, creativity and innovation and many more.
It has been found that the people are not in good economic condition after the COVID
pandemic. So they don’t want to spend money on the products which are not so important for
their survival. The organisations have to hire the skilled and experienced employees so that they
can influence the customers and generate the need of product to the customer as it is well known
that customer make the buying decision only on the basis of their needs and requirements. Only
in that case, the automobile companies can sell their products.
Due to the safety and health aspects of people, it is not safe to use the public transport for
travelling. It is also a positive factor for the automobile industry as it will create the need of cars
to the people. It can be consider as the successive point for the organisation after the COVID
pandemic.
CONCLUSION
From the above report it has been concluded that the COVID-19 pandemic highly impact the
organization of automobile industry. Due to this pandemic, they are facing a lots of crisis. Aston
Martin is a sports car manufacturing organization. The crises of COVID-19 effect the selection
decision as well because of the people do not have much money to invest on the things which are
not necessary for their survival. From a report it has also been analyzed that the output of UK car
manufacturing companies go downward by 29.3 percent in 2020 which is the lowest total since
1984. Aston Martin do the production of a sports car and it is well known that during the
COVID-19 there was no any demand of sports car. This result in the huge amount of loss to the
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automobile industries as the people was locked in their houses and spending money only on the
necessary things which are required for survival.
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REFERENCES
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impact of COVID-19 on global value chains?. The Journal of International Trade &
Economic Development, pp.1-22.
Anugerah, A.R., Muttaqin, P.S. and Purnama, D.A., 2021. Effect of large-scale social restriction
(PSBB) during COVID-19 on outdoor air quality: Evidence from five cities in DKI
Jakarta Province, Indonesia. Environmental Research, 197, p.111164.
Chewpreecha, U., Prabhu, V.S. and Mukhopadhyay, K., 2021. Regional Impact of Automobile
Policy in India. In Economy-Wide Assessment of Regional Policies in India (pp. 193-
234). Palgrave Macmillan, Cham.
Gupta, I., Mishra, N. and Nurullah, M., 2021. Post lockdown recovery: an empirical study of
India's automobile sector. The New Normal: Challenges of Managing Business, Social
and Ecological Systems in the Post COVID 19 Era.
KM, K.R. and KG, N.K., 2021. Impact of Covid-19 Pandemic in the Automobile Industry: A
Case Study. International Journal of Case Studies in Business, IT and Education
(IJCSBE), 5(1), pp.36-49.
Li, J., Jiao, J., Xu, Y. and Chen, C., 2021. Impact of the latent topics of policy documents on the
promotion of new energy vehicles: empirical evidence from Chinese cities. Sustainable
Production and Consumption, 28, pp.637-647.
Marimuthu, R., Sankaranarayanan, B., Ali, S.M. and Karuppiah, K., 2021. Green recovery
strategies for the mining industry of India: lessons learned from the COVID-19
pandemic. Journal of Asia Business Studies.
Pai, Y. and KG, N.K., 2021. Operational Resilience of the Indian IT-BPM Industry during the
COVID-19 Pandemic–A Case Study. International Journal of Case Studies in Business,
IT and Education (IJCSBE), 5(1), pp.1-13.
Pawar, M.V., Anuradha, J., Pawar, A.M., Sanap, S., Sachdeo, R.K., Ravande, K., Malhotra, J.,
Bhapkar, H.R. and Pawar, P., 2022. COVID-19 Epidemic Impact on Various Society
Sectors. In Healthcare Informatics for Fighting COVID-19 and Future Epidemics (pp.
211-232). Springer, Cham.
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