Environmental Regulations and the Future of Automotives

This report examines the significant influence of evolving environmental regulations on the automotive industry, focusing on how manufacturers are adapting their vehicle designs and production processes to meet both regulatory requirements and consumer demands. The research explores the historical context, including early production methods and the shift towards mass production, and delves into the impact of key environmental legislations, such as the Environment Protection Act 1990 and European emission standards (Euro norms). The study incorporates a literature review covering topics like the concept of environment, environmental issues for automobile manufacturers, emission standards, electric vehicles, and theoretical frameworks such as Open Innovation and Disruptive Innovation. Furthermore, the research methodology involves qualitative data analysis, including interviews with industry professionals at BMW to gather insights on innovation strategies and challenges. The findings highlight the complexities faced by automotive companies in balancing environmental compliance, technological advancements, and consumer preferences, with a focus on the future of the automotive industry.

How have environmental regulations affected the way manufacturers
design and produce vehicles to accommodate consumer needs? And
what does this hold for the future of the automotive industry?
Name of the Student
Name of the University

Acknowledgement
By this research, I have experienced best possible learning of my life. By conducting this
research I have learnt various concepts, models and theories. I first thank to the almighty God.
After that I want to thank to my supervisor ______________ who is my philosopher and guide. I
also thank my parents for being supportive and accommodative for completing this research. I
want to thank my friends for giving me the moral support while conducting this research.

Abstract
This research will focus on the changing environmental regulations that have been forcing
manufacturers for innovating in automobile industry. Automobile industry has been facing
difficulties with the change in the market trend. Recent years have shown interest in pollution
less vehicles with enhanced technologies. During the very early stages of the automotive industry
a lot of the production was done by hand, mainly using a craft and guild, which is where workers
would make products by hand, this would usually ensure build quality, but would be very time
consuming, and costly. Many automobile companies have been facing loss in the market due to
enhancement of technologies in the market. Previous studies related to the environmental
changes have been studies in this research. The impact on automobile industry due to
environmental changes have been discussed in the research.
The research will gather primary data from conducting an interview with employees of BMW for
gathering information about how company has been inspiring innovation and change in the
industry. Data will be analysed with qualitative data analysis method. The research will follow
all ethical considerations. Results and outcomes will follow objectives of the research.

Table of Contents
Acknowledgement...........................................................................................................................2
Abstract............................................................................................................................................3
Chapter 1: Introduction....................................................................................................................7
1.1 Introduction............................................................................................................................7
1.2 Research Background............................................................................................................7
1.3 Research Rationale................................................................................................................8
1.4 Aims and Objectives..............................................................................................................8
Chapter 2: Literature Review.........................................................................................................10
2.1 Introduction..........................................................................................................................10
2.2 Concept of Environment......................................................................................................10
2.3 Environmental issues for Automobile Manufacturers.........................................................11
2.4 Emission standards and environmental institutions across the world.................................12
2.5 Environmental regulation affecting design of vehicles.......................................................13
2.6 Concept of Electric Vehicles...............................................................................................14
2.7 Theoretical Framework........................................................................................................16
2.8 Changes and Challenges in the automobile industry...........................................................16
2.9 Summary..............................................................................................................................18
Chapter 3: Research Methodology................................................................................................19
3.1 Research Philosophy............................................................................................................19

3.2 Research Approach..............................................................................................................19
3.3 Research Design..................................................................................................................20
3.4 Data Collection method.......................................................................................................21
3.5 Sample Size and Sampling technique..................................................................................21
3.6 Data Analysis Method.........................................................................................................21
3.7 Ethical Consideration...........................................................................................................22
Chapter 4: Data Findings and analysis..........................................................................................25
4.1 Introduction..........................................................................................................................25
4.2 Interview..............................................................................................................................25
4.3 Analysis...............................................................................................................................28
4.4 Summary..............................................................................................................................33
Chapter 5: Conclusion and Recommendations..............................................................................34
5.1 Research Contribution.........................................................................................................34
5.2 Recommendations................................................................................................................36
5.3 Limitations...........................................................................................................................37
5.4 Further research...................................................................................................................37
References......................................................................................................................................38
Appendices....................................................................................................................................43
Appendix A – Consent Form.....................................................................................................43
Appendix 2: Interview transcript...............................................................................................45

Chapter 1: Introduction
1.1 Introduction
This chapter of dissertation introduces research topic. The main reason behind conducting
this research is also discussed in this chapter. This chapter details background of research study
to deliver purpose of research study then the research rationale is discussed. The key aims and
objectives of research is discussed in this chapter to allow the readers to know the importance of
the research topic in these recent days. The last section of the introduction chapter provides an
overview of project which allow the readers to know the structure of research study.
1.2 Research Background
The automobile industry has been the largest manufacturing sector in the world. The automotive
industry has been facing issues with changing market trends in recent years. There have been
continuous changes in the needs and expectations of customers in the market. In past years, low
budget vehicles have been great priority in the market. However, it has changed in last five
years. As per research done by Kopelias et al. (2020), technology has been recent changes in the
market. Various vehicles with advanced technology have been developed in the market. Now a
days, vehicles need to be environmental friendly which create low pollution. There have been
various environmental regulations acting in the design and development of the automobile
industry in the market. Under Environment Protection Act 1990, pollution has been main
concerned topic. The UK government has been strict with regards to the low pollution in the
environment (Bellos, Ferguson and Toktay 2017). Therefore, various companies have been
facing issues with development of their designs of vehicles. Several companies have been
utilizing Open Innovation that can be used in the market. In the new era of innovation and

development in the automobile industry, several environmental regulation have been changed in
due course. Several companies including BMW and Toyota have been changing their designs
according to the change in environmental regulations. Toyota and tesla have been working on the
technology of electric automobiles and automated automobiles (Ramanathan et al. 2017). This
technology has been helping in low pollution in the environment. Toyota has been making usage
of Disruptive Innovation theory. Therefore, this research has been focused on changes in design
of vehicles due to environment regulation modification.
1.3 Research Rationale
The main problem discussed in this research has been related to change in the environment
regulations and its effect on design of the vehicles in automobile companies. Various
environmental regulations have been creating issues for the automobile companies for changing
their designs and development of their vehicles. Companies have to invest more amount in their
research and development department for modifying their designs of vehicles. This have been
causing issues for new companies in the automobile sector (Dechezleprêtre and Sato 2017).
Various companies are not able to change their design of the vehicles according to changes in the
environmental regulations.
1.4 Aims and Objectives
The aim of the research has been focused on changing environmental regulations affecting
designs of vehicles for meeting customer needs.
Objectives are as follows:
 To identify designing process of automotive vehicles
 To identify regulations that these companies abide by

 To analyze impact of old and new regulations on vehicle design
Following are the research questions:
 How companies in the automotive industry design vehicles?
 How do new and old regulations affect the way a vehicle is designed?
 How do companies evaluate designs before putting them into production?
 How consumer do needs clash with regulations?

Chapter 2: Literature Review
2.1 Introduction
This section focuses on previous studies done on this research topic. Several; studies have
been utilized to gather knowledge about impact of change in environmental regulation in design
of automobile industry. Several issues based faced in the environment and its impact on the
design of automobile manufacturer product has been mentioned in the section.
2.2 Concept of Environment
The concept of environment has been ambiguous and can be applied in several things in
various fields. As suggested by He, Zhou and Liu (2017), the term refers to both quantity and
quality of natural resources and it include air, water, atmosphere and landscape. It has been a
critical determinant of environment of sustainability of human activities and development of
industry. Loss of biological diversity, rapid deforestation and hazardous waste releases have been
degrading environment continuously. Tripahti, Lampel and Massini (2019) argued that, some
environmental degradation might be necessary and beneficial from an economic growth
viewpoint as far as all costs have been accounted for sustainability and productivity of alternative
uses. However, previous studies shows that there have been enormous negative affect of
environmental degradation over the planet. It has been estimated that 25 percent of the world’s
population in industrialized nations consumes 70 percent of the world’s resources (Bharadwaj
2018). There have been huge degradation of environmental resources all over the world.
Automobile industry has been affected a lot by the changes in the environmental conditions. It
has been recognized that there has been conflict between economic growth and environmental
degradation.

2.3 Environmental issues for Automobile Manufacturers
Advantages of vehicles have been related to the door-to-door transportation system and
gaining meaning to access to various accessories of life employment and necessities. However,
there have been issues including air pollution, greenhouse gas emissions, noise and road
congestions which have been degrading environment. The automobile industry have radical
changes in last 30 years. Yuan and Jiang (2019) stated that there have been many challenges
faced by the industry due to change in the environmental regulation in the market. Huge
addiction on fossil fuels and huge consumption of raw material have been leading to
environmental issues. Automobile industry has been depended on these fossil fuels for running
their vehicles. Maximum number of vehicles manufactured by automobile industry are running
on either petrol or diesel. Therefore, huge utilization of petrol and diesel has been affecting the
presence of fossil fuels and raw materials. It has been also polluting air and atmosphere by
smoke generated from vehicles. The increase of transportation has increased the consumption of
petrol and diesel (Hekkert and van den Hoed 2017). This has been causing air, water and noise
pollution. Therefore, automobile manufacturers have been trying to change their strategies by
improving efficiency of engines for gaining high fuel economy. Li et al. (2020) argued that this
will not help in gaining high fuel economy and will not resolve issue. Automobile manufacturers
need to change their design of their vehicles. The auto mobility cultures have been causing
deaths and injuries in road traffic accidents. This has been also causing environmental
degradations. The automotive industry has been providing better attribution towards innovation.
Customers have been tending towards latest products as one of the way modern products provide
their users a sense of exclusivity. The new innovations in the automotive industry have not been
simply happened or forced to happen. It has been done due to the changes in environment.

During early stages of automotive industry, most of the production have been done by hand. This
have been costly and time consuming for the production. Modern technology has been based on
Mass production Theory, which has helped in increasing revenue for automobile manufacturing
industries. Therefore, along with mass production theory, there are several other theories have
been acting in the context. Several companies have been applying Open Innovation theory. This
theory implies that companies need not to be relying on innovations and ideas based on internal
sources only. External sources can be utilized for improving their products. This theory has huge
application in automotive industry for designing and manufacturing. Companies have been
utilizing external ideas including customer feedbacks for innovating their products.
2.4 Emission standards and environmental institutions across the world
As commented by Zhang, Ma and Yong (2019), the Environment Canada (EC) has been
responsible for coordinating with environmental policies and preserving and enhancing
environment. A set of rules known as CEPA 1999 (the Canadian Environmental Protection Act)
have been associated with the American legislation and applying to every range of vehicles from
passenger automobiles to buses and motorcycles. The emissions standards have been managed
by EPA (Environmental Protection Agency) (Dechezleprêtre and Sato 2017). This have been a
tighter emission regulation than others. The emission standards have been defined in series of
European Union’s directives making the progress of increasing other standards. These
regulations have been termed as Euro norms and came into existence by 1992. The Air Pollution
Act in 1968 was the first law designated as environment policy. This has been updated in 1978.
In 1992, another law concerning with all pollution sources was issued by Ministry of
Environment (Li et al. 2019). There have been certain changes in the environmental regulations
for maintaining pollution free environment. The European Union focuses on accomplishing