Brexit's Impact on UK Automotive Sales: A Rolls-Royce Case Study

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RESEARCH PROJECT
BREXIT AFFECTED SALES OF GLOBAL BUSINESS ENVIRONMENT ON AUTOMOTIVE INDUSTRY
OF UK- A CASE STUDY OF ROLLS-ROYCE MOTOR CARS LIMITED

Table of Contents
INTRODUCTION............................................................................................................................. 4
AIMS AND OBJECTIVES.................................................................................................................. 5
LO2.................................................................................................................................................6
P3 CONDUCT PRIMARY & SECONDARY RESEARCH USING APPROPRIATE METHODS FOR
RESEARCH PROJECT CONSIDERING ETHICAL ISSUES, COSTS AND ACCESS.................................6
P4 APPLY APPROPRIATE ANALYTICAL TOOL, ANALYSE RESEARCH FINDINGS AND DATA..........8
M2 DISCUSS MERITS, LIMITATIONS AND PITFALLS OF APPROACHES OF DATA COLLECTION
AND ANALYSIS......................................................................................................................... 19
LO3............................................................................................................................................... 21
P5 AND M3 COMMUNICATE RESEARCH OUTCOMES IN AN APPROPRIATE MANNER FOR THE
INTENDED AUDIENCE...............................................................................................................21
LO4............................................................................................................................................... 32
P6 REFLECT ON EFFECTIVENESS OF RESEARCH METHODS APPLIED FOR ACHIEVING
OBJECTIVES OF THE RESEARCH PROJECT.................................................................................32
P7 CONSIDER ALTERNATIVE METHODOLOGIES & LESSONS LEARNT IN VIEW OF OUTCOMES 34
M4 PROVIDE CRITICAL REFLECTION THAT RESULTS IN RECOMMENDED ACTIONS FOR
IMPROVEMENTS & FUTURE RESEARCH CONSIDERATIONS......................................................35
CONCLUSION............................................................................................................................... 36

REFERENCES.................................................................................................................................37
Figure 1: Job role in Rolls-Royce.................................................................................................. 10
Figure 2: Globalization strategy in Rolls-Royce............................................................................11
Figure 3: Brexit awareness of Rolls-Royce's employees...............................................................12
Figure 4: Impacts of Brexit...........................................................................................................13
Figure 5: Influence of Brexit on automotive industry..................................................................14
Figure 6: Impact of Brexit on global economy.............................................................................15
Figure 7: Advantages of global business environment on automotive industry..........................16
Figure 8: Drawbacks of global business environment..................................................................17
Figure 9: Steps taken by Rolls-Royce........................................................................................... 18

INTRODUCTION
Brexit is referred as the ‘British exit’ which implies the withdrawal of the UK (United Kingdom)
from EU. The decision of UK to leaving EU was taken on 23rd June, 2016. After this action, the
automotive industry of UK has to face number of challenges as Brexit highly influence the
operations in the automotive industry of UK. Also, Brexit affected the sales operation and the
business environment of different sovereign countries (Li et al., 2019). The UK automotive
industry has become integrated with global economy and continuing in this way. As of now,
Brexit is one of the worst crises for the automotive industry of UK and affects the car sales at
high (Cumming and Zahra, 2016). The Global automakers have cancelled the fresh investments
and even the car companies are pulling their hair out. Thus, it has been observed that Auto
industry of UK is stalling over Brexit risks and the high uncertainty over Brexit is playing out for
automakers (Li et al., 2019). Also, Brexit throws positive as well as negative impacts on the
global business environment (GBE) which ultimately affects the operations of the organizations.
The research is focusing on the case study of one of the most popular automotive companies in
UK naming Rolls-Royce motor cars limited. The company has spent a big amount of £100m
preparing for no-deal Brexit as it has estimated that if Britain crashed out of EU, the company
could lose large number of jobs.

AIMS AND OBJECTIVES
Aim of the research
As auto industries are global in their orientation, the research mainly aims at analyzing the
negative and positive impacts of the globalization along with outlining the effects of Brexit on
the UK automotive industry (Peng, 2016). The research particularly aims at investigating that
how Brexit impacted the sales operations of Rolls-Royce Motor Cars Limited.
Objectives
 To analyse the implications of Brexit-related issues
 To identify the pros & cons of the GBE on the automotive companies of UK
 To investigate the effects of GBE on business activities of Rolls-Royce automotive
company
 To assess the impact of Brexit on sales of Rolls-Royce Motor Cars

LO2
P3
According to Cumming and Zahra (2016) Automakers could lastingly move more of their
products accelerate to other countries that provides more stable business environment. The
author also agrees to the statement that ‘auto companies are global in their orientation’
(Humphreys and Munro, 2019). John Paul MacDuffie, the director of a program on Mobility
Innovation & Program on Vehicle, He throws his reviews on the favorable and unfavorable
business environment in the UK for automakers (Humphreys and Munro, 2019). According to
him, the priority of automakers is to find a stable and favorable business environment
otherwise it may impact on their overall global strategy. However, it may also a big concern for
UK economy as the people holding well jobs may face a potential loss and it’s real huge.
According to Li et al., (2019) The UK’s automotive industry is the “start performers” of the UK
economy by showing its effective performance in the recent years. The author reflects on the
long term impacts of Brexit on UK automotive industry which includes the foreign direct
investment and trading relationship.
Rolls-Royce Motor Cars Limited has mentioned in the survey that they are committed to UK and
spending their capital expenditure in Derby, also they committed that they are not going to
move from there. The total workforce of Rolls-Royce is 54,500 out of which 23,400 people
works in the UK. According to John MacDuffie, Rolls-Royce would maintain its position and
operations in Britain under Brexit scenario. The pretax profit for Rolls-Royce is accounted at
£94m to the end of June for six months which was greater than the expected £81m a year
earlier. The revenue has incremented up to 7%.

PRIMARY RESEARCH – SURVEY
The data of this research is appropriately gathered through conducting a survey among 100
employees of Rolls-Royce and ask them to fill the questionnaire that was sent on their mail. The
questionnaire contains multiple set of questions regarding the impact of Brexit and the GBE on
the sales and other operations of the company. Through this survey, the raw data is gathered
through the respondents (Walliman, 2017). The reason for targeting the employees of Rolls-
Royce is that they are the person who daily visit the company and must have more knowledge
about the factors that throws impacts on its sales and other operations. The survey expected to
receive more valid and reliable responses from the respondents (Walliman, 2017).
SECONDARY RESEARCH- JOURNALS, BOOKS, ARTICLES
In the present research, the secondary data is supposed to gather from different sources so as
to receive large amount of information to get sufficient and reliable knowledge about the
research topic. It can be collected more effectively by reviewing the literature of many authors
regarding the impact of Brexit and GBE on the automotive industry of UK. The primary research
on the topic provides accuracy of information. Also, the data can be gathered through internet,
books and articles on Google Scholar, CINHAL, PubMed and other similar searching engines.

P4
The appropriate tool to gather the data across all the areas is the market research and relative
techniques; the researcher has analyzed the market in order to understand the views of
consumers regarding Brexit & global business environment (Adekola and Sergi, 2016). It has
been found that some of the respondents are in the favor of Brexit and some are in against.
Also, the market research helps in understanding the market position of Rolls-Royce in
automotive industry.
Rolls-Royce Motor Cars Limited committed to pledges the future in the UK despite Brexit
qualms. The company comes under the luxury car makers and positioned itself on the second
largest company in terms of annual sales which is accounted at 6% on previous year to 4,011
vehicles. Thus, the company unveils highest annual sales figure in more than a century. The
most influence factor of Brexit at Rolls-Royce is the jobs of the staff as it would raise prices &
cost and affects the Rolls-Royce employment base de (France et al., 2017).
There are many analytical tools that can be utilized in this research to understand Pros/cons of
GBE and the impacts of Brexit on Rolls-Royce Motor Car’s sales.
Control Charts
A control chart or a graph is used to understand how a process in the market changes over
time. The information or data which is gathered through the research is plotted in the graph in
a particular order and offers accurate data of the consistent variation in the market (Hazır,
2015).

Survey
The data which is gathered from the targeted employees of Rolls-Royce can direct on its
business performance. Rolls-Royce is considered among the familiar & large UK-based firm
which committed to continue its operations in UK with large number of skilled staff.
The survey has been conducted among 100 employees of Rolls-Royce Motors Cars Limited and
the data is analyzed through creating charts and graphs so that the proper statistical analysis
will be received. The graphs will provide the accurate ratio of the employees that are in favor or
in oppose of Brexit.

DATA ANALYSIS
Question 1:
Marketing Sales Inventory logistics
0
5
10
15
20
25
30
35
40
In which department you work at Rolls-
Royce?
Job role
Figure 1: Job role in Rolls-Royce
Source: (author’s work, 2019)
Activities Responses
Marketing 20
Sales 35
Inventory 22
Logistics 23
TOTAL 100
Out of the total 100 respondents, the data represents that the majority of the employee works
in the sales departments of Rolls-Royce accounted at 35. Other remaining respondent works in
inventory, marketing and logistic departments.

Question 2
Yes No May be
0
5
10
15
20
25
30
35
40
45
Being an employee in Rolls-Royce, do you
think that company should adopt
Globalization strategy?
Globalization strategy
Figure 2: Globalization strategy in Rolls-Royce
Source: (author’s work, 2019)
Activities Responses
Yes 43
No 37
May be 20
TOTAL 100
The analyzed data represents that majority of the respondents (48 out of 100) think that Rolls-
Royce should adopt globalization strategy to diversify the risk factors in numerous countries so
that it may resolve easily.

Question 3
Yes No
0
10
20
30
40
50
60
70
Are you aware about the concept of Brexit?
Concept of Brexit
Figure 3: Brexit awareness of Rolls-Royce's employees
Source: (author’s work, 2019)
Activities Responses
Yes 69
No 31
TOTAL 100
The data represents that 69 respondents out of 100 are aware about the concept of Brexit
which is a good ratio. After knowing that maximum employee have complete knowledge about
the Brexit, the further survey will be analyzed effectively.