Global Business Management Case Study: Australian Automotive Industry

This case study analyzes the Australian automotive industry, focusing on its evolution, key players, and market dynamics. The analysis begins with an overview of the industry sector and the domestic market in Australia, highlighting the presence of major companies such as Ford Australia, Toyota Australia, and Holden Australia. It provides a historical context, tracing the industry's development from the late 19th century. The rationale for selecting the Australian market and the automotive industry is presented, emphasizing its economic growth and prominence. The core of the analysis involves an application of the PEST framework (Political, Economic, Social, and Technological factors) to assess the external environment influencing the industry. Each factor is described and its implications on the automotive sector are discussed, including the impact of tax policies, fluctuating fuel prices, changing consumer preferences, and technological advancements. The study concludes with references to support the analysis, offering a comprehensive understanding of the Australian automotive industry and its strategic considerations.

Global Business Management
8/9/2019

Management 1
Case Analysis
1. Industry sector
The industry sector of the automotive are very much advanced as they have the better design,
manufacturing, and the higher level of the equipment in the motor vehicles. There were many
automotive brands which are very popular in the Australia and they are dealing has been done
world widely.
2. Domestic market
The domestic market of Australia is the largest market which is dealing in many products. In
the domestic financial market, Reserve Bank performs all the transactions and ensures target
set by the Reserve Bank Board remains close to cash rate target. The market economy of the
Australia is mixed and prosperous where the rate of the poverty is low and rate of GDP is
high. Australia is the developed country of the world so the domestic market is free (Compare
the market 2019). There are four major components of the domestic market which are trade,
services, manufacturing and the financing. At the time of the recession also, the domestic
market of the country does not get much affected.
3. Major companies
Many companies manufacture cars in the market which include Ford Australia, Toyoto
Australia, and Holden Australia. The automotive industry of the Australia is expanding their
market in the foreign by expanding their operations.
Ford Australia: - Ford Australia is considered as the subsidiary of the Ford motor that came
into the existence in the Geelong, Victoria in the year 1925. It has been found that Australia
is considered as the key development hub for the company due to which they invest more
than $1.4 billion for conducting the research as well as development within the time period of

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2016-2018. Along with this, it has been planned for $500 million of investment for the year
2019 (Ford Australia 2019, np).
Toyota Australia: - Company begin in the year 1963 and since the company they have tried
to maintain the leading automotive company in Australia. These vehicles majorly expand the
freedom of the mobility and we have the effect on our society as well as to environment
(Toyota 2019, np).
Holden Australia: - Company is majorly known as the General motors Holden which is an
Australian automobile brand with the former automobile manufacturer that imports the
manufactured cars under the name of brand (Holden Australia 2019, np). The company found
in 1856 with headquarters in Port Melbourne, Victoria.
4. History
In the research, this has been witnessed that with the relatively small population spread over
the vast continent, the industry of automobile found early acceptance in Australia with the
emergence of the first steam car that was manufacturer in the year 1896 by Herbert Thomson
and Edward Holmes of Melbourne (Eisenstein, 2017). Along with this, the first model was
the gas-driven model that is Tarrant that was assembles in the year 1901, Melbourne
(Compare the market 2019, np).
5. Rational
The reason behind the selection of the market as Australia because it is well-known market
for the different companies belongs to different industry. In addition to this, the market of
Australia has always remained in lime light because of its growth in terms of economic as
well as in terms of the market which attracts the company to expand their business in
Australia.

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In addition to this, the automotive industry has been selected because it always remained in
news and every company has their manufacturing units in the market of Australia. This
makes the industry to register the higher position in the market. In addition, the reason behind
selecting the industry is to get the knowledge about the market due to which the entire
industry collapses. However, there are still some manufacturers that produce trucks in the
market.
6. External frameworks
It is essential to evaluate the market of automotive within Australia with the help of the
external frameworks.
a) PEST analysis description
PEST analysis is a strategic business tool that is majorly used by the organisation in
automotive industry to discover, evaluate, organise as well as track the different factors. The
below given is the description of every element (Lasserre 2017, p.54).
Political factors The political factors consist of tax policies, laws of employees, tariffs and
regulations and stability of country that influence the working of industry.
Economic
factors
The economic factors majorly consist of indicators, rate of inflation,
interest rates, and many others which lead to the direct impact on working
(Cuaresma, Lagrimas, Perez, and Atento, 2015, 195)
Social factors The social factors majorly consist of changes in consumer trends and their
purchasing in the Australian market.
Technological
factors
The technological factors include the change or up-gradation in technology
that influence the working (Ethiraj, Gambardella and Helfat, 2018, 1529).

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b) Implication
This section include the implication of the PEST analysis on the automotive industry of
Australia,
Political factors: - Automobile industry found that there is a tax policy that affects the luxury
car companies to perform their business due to tax of 33% on the amount of car (Ford
Australia 2019, np). This makes customers not to purchase the product as well as lead to
decline in sales of company.
Economic factors: - In the automotive industry of Australia there is fluctuation in the fuel
prices that makes the company to look towards the new opportunity like Hybrid technology
and many others but it remains difficult to provide the products because of high cost involve
in technology.
Social factors: -Automobile industry of Australia is affected due to social factors because
nowadays people are looking for the high end-technology product which makes company to
purchase the technology. Along with this, these customers want to meet the social status in
market due to which the company need to keep making the changes as per customers.
Technological factors: - Automobile industry or companies who are performing the business
are highly depended on the technology. The change in the technology makes the company to
implement that strategy to compete in competitive market and to offer the high level of
satisfaction to employees.

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References
Australian Government 2019, Luxury car tax, viewed 9th August 2019
<https://www.ato.gov.au/Business/Luxury-car-tax/>.
Compare the market 2019, A complete guide to the history of Australian car manufacturing,
viewed 9th August 2019 <https://www.comparethemarket.com.au/history-of-aussie-car-
manufacturing/>.
Cuaresma, C., Lagrimas, A.P., Perez, A. and Atento, R.G.O., 2015, Strategy Innovation For
Honda High–End Car. Laguna Business and Accountancy Jounal, vol. 1, no. 2 pp.185-200.
Eisenstein, P. A., 2017, Australia's 100-Year-Old Automobile Industry Just Closed Down,
viewed 9th August 2019 https://www.nbcnews.com/business/autos/australia-s-100-year-old-
automobile-industry-just-closed-down-n812756
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2018, Theory in strategic
management. Strategic Management Journal, vol. 39, no. 6 pp.1529-1529.
Ford Australia 2019, About Ford Australia, viewed 9th August 2019
<https://www.ford.com.au/about-ford/>.
Holden Australia 2019, Discover Holden, viewed 9th August 2019
<https://www.holden.com.au/discover-holden>.
Lasserre, P., 2017, Global strategic management. Macmillan International Higher Education.
Toyota 2019, Toyota Australia, viewed 9th August 2019 <https://www.toyota.com.au/the-
company>.