Strategic Assessment: PESTLE Analysis of AUDI & Key Change Drivers

This report presents a PESTLE analysis of AUDI, a leading automobile company, examining the political, economic, sociocultural, technological, legal, and environmental factors influencing its strategic decisions. The analysis highlights the impact of political instability, foreign trade regulations, unemployment rates, and consumer preferences for electric vehicles. It also addresses the importance of complying with safety and environmental regulations. The report concludes that AUDI's success depends on adapting to these external factors and maintaining high environmental and safety standards. Desklib provides students access to similar solved assignments and study tools.

Running head: AUDI 0
Strategic Thinking
PESTLE Analysis of AUDI

AUDI 1
Factors Key Point Description Key Drivers of
Change
Political  Lack of Political
stability
 Low restrictions on
foreign trade
 Currently,
there is lack
of political
stability in
Germany due
to Trump
administration
.
 Markets such
as EU and UK
are offering
government
subsidy for
promoting the
purchase of
low emission
vehicles.
 President
Trump has
threatens
German
automobile
firms with US
import tariff
of 35 percent
(Taylor and
Rinke, 2017).
 AUDI has
pushed the
development
of carbon
dioxide-
efficient
engine cars
and
government
has removed
restrictions
for
environment-
friendly cars
(Rieger,
2017).
Economic Reduction in unemployment The unemployment
rate in Germany was
3.6 percent in August
2017 (Eurostat,
2017). It assists the
enterprise in hiring
talented employees,
and it also increases
the investment of
customers on cars
which increases
company’s profits.
For example, AUDI
has reported 12
percent rise in its
sales in 2017 (Tsui,
2017).
Effective German
labour policy
(Kurzarbeit) and
increased exports
resulted in reducing
unemployment in the
country (Warren,
2010).
Sociocultural Benefit of consumerism AUDI is
manufacturing fuel
efficient and low
emission cars for its
customers. It has
The popularity of
electric vehicles and
expansion in markets
such as India and
China require AUDI

AUDI 2
joined Go Ultra Low
campaign to increase
awareness about
benefits of such
vehicles (Fleet News,
2017).
to invest in fuel-
efficient cars.
Technological New
discoveries/developments
Popularity of electric
vehicles is growing
rapidly, and AUDI is
focusing on cutting
cost by 10 billion
euros (£8.9 billion) to
invest in electric cars
by 2022.
The industry is
shifting towards
electric vehicle due
to global demand for
new “green”
technology, and
AUDI is facing
competition from
Tesla.
Legal Compliance with General
Safety Regulation (EU)
AUDI has to ensure
that its cars are
manufactured as per
EU’s and other
countries safety
standards (AUDI,
2018).
The scandal of
Toyota’s unintended
acceleration and
Volkswagen
emissions scandal
increased the
requirement of safety
standards which are
followed by
automobile
corporations.
Environmental Environmental protection
law
AUDI Brussels
(manufacturing plant
of AUDI) has been
certified by Eco-
Management and
Audit Scheme
(EMAS) for more
than ten years due to
reducing waste and
effectively
consuming energy
(AUDI Brussels,
2012). The plant
protects natural
resources and uses
recycling to reduce
their carbon footprint.
The government has
become strict
regarding
environmental
protection, waste
disposal and energy
consumption laws.
The perception of
customers has
changed, and they
prefer to buy cars
from manufacturers
with environment-
friendly production.

AUDI 3
Comment
AUDI is one of the leading automobile companies in the world, and its decisions are
influenced by different political, environmental, legal, technological, sociocultural and
economic factors. The lack of political stability might create new risks for the enterprise in
future, but lack of foreign trade regulations assist in increasing its profits. Due to the low
unemployment rate, the firm is able to increase its sales and hire talented employees. Due to
social perception of customers, the firm has increased its investment in electric vehicles. The
firm has to comply with safety regulations to ensuring that cars are manufactured as per
government standards. It also has to comply with Environment protection law and
manufacture its cars with high environment-friendly standards.

AUDI 4
References
AUDI Brussels. (2012) Measures for environmental protection at the Brussels site. [Online]
AUDI Brussels. Available at:
http://www.audibrussels.com/audi_brussels/brand/en/company/environmental-
protection.html [Accessed 20 February 2018].
AUDI. (2018) Crash Safety. [Online] AUDI. Available at: https://www.audi-technology-
portal.de/en/body/stiffnes-crash-safety/crash-safety [Accessed 20 February 2018].
Eurostat. (2017) Employment and Unemployment (LFS). [Online] Eurostat. Available at:
http://ec.europa.eu/eurostat/en/web/lfs/statistics-illustrated [Accessed 20 February 2018].
Fleet News. (2017) Hyundai joins Go Ultra Low campaign. [Online] Fleet News. Available
at: https://www.fleetnews.co.uk/news/manufacturer-news/2017/03/22/hyundai-joins-go-ultra-
low-campaign [Accessed 20 February 2018].
Rieger, B. (2017) German Car Companies Are Driving the Country Off a Cliff. [Online]
Foreign Policy. Available at: http://foreignpolicy.com/2017/08/16/german-car-companies-
are-driving-the-country-off-a-cliff/ [Accessed 20 February 2018].
Taylor, E. and Rinke, A. (2017) Trump threatens German carmakers with 35 percent U.S.
import tariff. [Online] Reuters. Available at: https://www.reuters.com/article/us-usa-trump-
germany-autos/trump-threatens-german-carmakers-with-35-percent-u-s-import-tariff-
idUSKBN1500VJ [Accessed 20 February 2018].
Tsui, C. (2017) Audi Reports 12 Percent Sales Increase in the U.S. [Online] The Drive.
Available at: http://www.thedrive.com/sheetmetal/16616/audi-reports-12-percent-sales-
increase-in-the-u-s [Accessed 20 February 2018].
Warren, M. (2010) Why Germany's Unemployment Rate Is Lower. [Online] Weekly
Standard. Available at: http://www.weeklystandard.com/why-germanys-unemployment-rate-
is-lower/article/493883 [Accessed 20 February 2018].