Business Environment and Key Issues in the Automobile Industry

This report examines the key problems faced by the automobile industry, including worldwide rivalry and the impact of Brexit. It also discusses the PESTEL analysis of the industry and its effects on businesses. Challenges and reflections are also included.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Key Issues..............................................................................................................................3
PESTLE and two problems impacts the sub sector...............................................................4
Impact upon business.............................................................................................................6
Challenges..............................................................................................................................7
Reflection...............................................................................................................................8
CONCLUSION...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is considered is incorporated of both external and internal factors
which influences entities operations and practices. It involves several aspects like legislations,
competitors, and many others (Helm and Gritsch, 2014). The undertaken organisation for this
report is Aston Martin which is a British manufacture firm that was established in year 1993. It
deals in producing luxury sports car as well as grand tourer and having headquarters is in
England, London, UK. The main intent of this of report is to examine key problems that effects
automobile industry as well as PESTEL model for finding problems. Moreover, its affects upon
business in positive and negative manner as well as challenges are also described in this report.
MAIN BODY
Key Issues
This is regarded as the high priority trouble which affects entities in pessimistic manner.
Whole sector operating its enterprises at market are going through various problems. In relation
to UK, automobile sector contributes over £20.2 billion that adds value as well as turnover of
approx. £82 billion which play essential role into business development and growth. Thus, these
sector is facing several problems in context of Brexit, electric challenges, Emission Woes and
others. So, the major key issues into automobile industry are described below:
Worldwide rivalry: The globalisation enhancement leads towards improving as well as
developing factors for automobile sector. with raise of economic procedures, there is
maximisation into competition level that is considered as huge issues for automobile industry.
The major rivals are Land Rovers, BMW, Jaguar and many more which operates its entities at
worldwide level as well as forming rivalry among each other. The different brands target specific
marketplace but this overlaps because of rivalry. There is competition within automobile in
respect of cost, quality, technology and so on (Homburg, Stierl and Bornemann, 2013). Thus,
rivalry is considered as main key issues for respective sector. There is innovation into goods like
electric cars etc. This is effecting automobile subsectors due to higher production in context of
passenger vehicles development, SUV’ cars and many more for attracting large marketplace.
Brexit: Within United Kingdom automobile sector, company are going through warning
continuously for no deal Brexit from EU in year 2016. There is minimisation into investors from

last two years that was around 46.5% in year 2017. The British car producer depends upon
components that are imported from European on other side finished cars exports to EU
mainland. In case they face uncertainty for tariffs then this will drive for bottle neck as well as
delays into UK economic developments. Brexit is considered as vital factors that is developing
difficulty for respective industry. there are various entities that is monitoring lower exports to
China as well as lower sales within Europe. This have effected automobile sector in which 1.8 of
new individuals, cars are exported from EU27 to UK in year 2018 that reduced around 85% of
cars imports of UK as well as 32% of whole EU27 for exporting. In this, among 10 the 8 car
manufacturer exports cars within UK (Brexit key issues. 2019).
Figure 1.Car production
(Source: BREXIT AND THE AUTO INDUSTRY: FACTS AND FIGURES, 2019)
PESTLE and two problems impacts the sub sector
PESTEL analysis is regarded as tools which aids in observing external factors that have
effects on company and its practices (Kim, Suresh and Kocabasoglu-Hillmer, 2013). Automobile
sector has various renowned brand that is competing for gaining higher market share. United
Kingdom is having automobiles cars production from last 10 years. They have produced 8
million engines, vehicles as well as exports above 80% of that to individuals. PESTEL analysis
of automobile industry are described below:

Political factors: It is the crucial factors into automobile industry as this is approaching, it
means prospects of No deal Brexit. Brexit is effecting the overall sector in both the manner
positively and negatively. There is reduction into investment in respective industry along with
minimisation into quality that is 46.5% in 2017 year. Moreover, this has effected sub sector in
2018 in which production outputs of whole UK passenger’s cars was 1,519,440. There are about
1.8 million passenger’s vehicles which were exported from EU27 TO United Kingdom.
Economic factors: It is the factors that impacts badly as due to enhance economic crisis
the automobile sales decreases into developed countries (Lenssen and et. al., 2013). With this
particular factors, there is down fall into respective sector sales as well as production. The
overall value of cars exporting was £34.1 billion to EU that is 37% as well as quantity is
1325868 units to EU 50.7%. It has effected respective sector business positively and negatively.
Social factors: Automobile sector is effected with the change into society trends as well as
choices of society. The producer has adapted such factor for accomplishing requirements and
wants of its users in most effective way. With the changes into societal factors, in few areas the
demand of Sedans, SUVs is higher. So, the changes into such factors affects business of
automobile positively and negatively.
Technological factor: The advancement into technology as well as innovation are
regarded as determinants for raise into automobile sector market share. Firms has to concentrate
upon doing investment into R&D like BMW, Ford and so on. In this, Aston Martin concentrate
upon investing into eco-friendly and low emission vehicles for clients. There are various rivals
who concentrate upon producing alike products at lower cost with utilisation of advanced
technology. This drives towards enhancement into SUV’s, electric cars etc. This assists them to
maximise its productivity and sales as well.
Environmental factors: This involves laws associated with environmental factors for
performing entities operations as well as practices in efficacious way. the main automobile
players have to concentrate vehicles of low emissions (Quinton and Wilson, 2016). Vehicles that
generates low emissions as well as fuel consumption receive subsidiaries for taxation. Whole
automobile sector has to do pollution test for its vehicles and who pass this are eligible to operate
its vehicles at market. It aids in minimising environmental pollution and attainment of its
objectives in effective way.

Legal factors: This factors effects brand performance as well as profit. The vehicles
production like cars and sell it into international market are liable for complying legal legislation
associated with products quality and safety in an efficacious way. There is raise into laws
regarding pollution as well as that have to strictly comply through whole vehicles manufacturer.
Safety legislation have to be obeyed through company for operating its business efficaciously so
that they can sustain for longer term into competitive market (PESTEL Analysis of Automobile,
2019).
As per the above PESTEL analysis, it has been concluded that, the key issues discussed
above are political and technological. Automobile sector is approaching No deal Brexit aspects
as well as the national market like on road to cutting depends with EU mainland, producer of
automobile is opposed with uncertain market as well as operating cost risk is higher. Moreover,
within respective sector technology is becoming advanced and booming continuously by which
worldwide rivalry incurs as an issues.
Impact upon business
The issues have affect upon business in both the manner positive as well as negative.
Aston Martin have gone through with problems which impact its entities positively and
negatively which are described underneath:
Positive impact:
The positive affect of problems leads towards enhancement into productivity as well as
profitability of chosen company. Some optimistic effects are mentioned below:
Worldwide rivalry: The globalisation enhancement has optimistic effect upon automobile
sector growth into competitive market (Saleem, 2017). This aids Aston Martin to perform
innovation in its current products which drives them towards sales maximisation as well as
grabbing societal attention on innovative goods. With raise in worldwide rivalry, these is
maximisation into innovation level as well as drives entities for producing unique products such
as electric cars, emission vehicles and others.
Brexit: Because of Brexit, Aston Martin have to be depended upon regulations as well as
rules of World trade association which means that United Kingdom have car manufacturers such
as Aston Martin which have about 55% of cars and sourced its parts at Britain. This is tough for
them to meet that level as well as this also warned rivals to face trouble for sustaining. Thus, this
maximise respective organisation exports in terms of sports cars, passenger cars and many more.

Negative impact:
The negative effect of issues develops issues upon Aston Martin business survival at
market. Some effects are mentioned below:
Worldwide rivalry: As there are various automobile rivals at worldwide level like
Toyota, BMW and so on that are competitors of Aston Martin for operating its business practices
effectively and efficaciously. It concentrates upon producing similar kinds of goods at lower
price through complying similar standards in order to grab the attention of its trustworthy clients.
It drives towards decreasing entities sales and profit at market. Thus, rivals concentrate upon
producing alike kinds of goods that leads clients to switch to others which affects business in
negative way.
Brexit: When United Kingdom was exits from European then luxury cars which was
produce through Aston Martin cost drives towards declining profit and sales. Moreover, its share
prices fall upto15% so this is considered as the heavy loss which was recorded into their annual
report. On another side, their share price minimised by 38% from IPO that is 1900 pence (Brexit
negative impact, 2019).
Challenges
For doing this project, there are various challenges like data and time management,
technical skills, investigation and many more. The challenges that effects entities are technical
skills and investigation. As there are several staff who perform within Aston Martin some of
them have shortage of informational technology as well as investigating skills that develops an
issues for performing a task efficaciously and effectually (Savrul, Incekara and Sener, 2014). For
accumulating appropriate information through online sources, these particular skills are essential
as well as accomplish it by entering into system that is be short of skilled staff wo are
performing into firm. Likewise, another challenges were in context of investigation, workers
within Aston Martin are not so competent in accumulating information needed into enterprises.
These challenges develop issues in accomplishment of organisational objectives. So, I order to
deal with all these challenges, they have to organise training and development programmes for
its staffs so that they may become competent to perform in profitable way. For information
technology skills they have to facilitates online courses associated with data analytics and others
for improving itself appropriately. It drives workers to accomplish their task and obtain
opportunities that is essential for respective entities. Likewise, in order to overcome from

investigation, challenge the personnel have to set up the proficient research team for monitoring
research work and ask them to participate in activities which is related to investigation as well as
sort out the problems that raise into company effectively.
Reflection
While doing this project work, I had faced many problems but among those two of them
were major that I has gone through like shortage period of time as well as information
accumulation with the assistance of secondary sources. As I need appropriate duration to
accumulate relevant information in efficacious way but due to less duration is an issues for me.
Likewise, as I have utilised secondary data collection methods for accumulating relevant
information for reaching towards conclusion with the assistances of internet, websites, books and
many more. As work have allotted to me so I have resolved all the problems through scheduling
them for each task, reviewing annual of respective organisation in its websites and so on and
attain objective in appropriate and efficacious manner (Virglerová, Dobeš and Vojtovič, 2016).
CONCLUSION
As per the above report, it has been concluded that business environment is vital for firm to
examine both factors such as external as well as internal that affects their entities. This can assist
in formulating policies and plans for efficacious results. It also aids in identifying strengths and
opportunities as well as deal with weaknesses and threats. Into automobile sector, several
problems have been faced in respect of international competition, Brexit, modifying
requirements and so on which affect entities positively and negatively. moreover, global
competition drives towards maximisation of innovation level that facilitates results in
enhancement of profitability and sales. Also, it minimises consumer loyalty because of enhanced
international competition at market area.

REFERENCES
Books and Journals
Helm, R. and Gritsch, S., 2014. Examining the influence of uncertainty on marketing mix
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Homburg, C., Stierl, M. and Bornemann, T., 2013. Corporate social responsibility in business-
to-business markets: How organizational customers account for supplier corporate
social responsibility engagement. Journal of Marketing. 77(6). pp.54-72.
Kim, M., Suresh, N. C. and Kocabasoglu-Hillmer, C., 2013. An impact of manufacturing
flexibility and technological dimensions of manufacturing strategy on improving supply
chain responsiveness: Business environment perspective. International Journal of
Production Research. 51(18). pp.5597-5611.
Lenssen, G., and et. al., 2013. A value mapping tool for sustainable business
modelling. Corporate Governance.
Quinton, S. and Wilson, D., 2016. Tensions and ties in social media networks: Towards a model
of understanding business relationship development and business performance
enhancement through the use of LinkedIn. Industrial Marketing Management. 54.
pp.15-24.
Saleem, M. A., 2017. The impact of socio-economic factors on small business
success. Geografia-Malaysian Journal of society and space. 8(1).
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
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Virglerová, Z., Dobeš, K. and Vojtovič, S., 2016. The perception of the state’s influence on its
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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/>