Analysis of Key Issues in the Automobile Subsector in the UK

This report provides an in-depth analysis of the key issues impacting the automobile subsector in the United Kingdom. It identifies vehicle recalls and vehicle emissions as the two primary challenges, exploring their causes and consequences. The report utilizes a PESTLE analysis to examine the political, economic, social, technological, environmental, and legal factors influencing the sector. It then categorizes the identified issues within the PESTLE framework, highlighting the technological aspects of vehicle recalls and the environmental impact of emissions. The report further assesses the positive and negative impacts of these issues on businesses, using Volkswagen as a case study. It concludes with a reflection on the learning experiences gained during the report's completion, including challenges faced and lessons learned in terms of time management and resource utilization.

Key Issues in the
Automobile subsector
in United Kingdom

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Key issues affecting automobile subsector.........................................................................1
2. PESTLE and 2 issues affecting automobile subsector ......................................................2
3. Positive and Negative Impact over selected business........................................................4
4. Reflection...........................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Automobile sector is one of the fastest growing industries as well as the largest across the
global periphery in terms of the revenues generated by it. It constitutes a large number of
organisations which are actively engaged in designing, development, production, marketing and
sale of vehicles at market place (Clinton and Whisnant, 2019). This sub-sector does not include
those companies which are indulged in maintenance and repairs of automobiles from their
delivery to consumption. The present report is conducted to identify the key issues affecting
automotive sector. Further, it includes PESTLE analysis and the categorisation of identified
issues. Lastly, it comprises of the impact of issues on business and reflection on the overall
assignment.
1. Key issues affecting automobile subsector
Automobile sector is a vast subsector comprising of several organisations. There are
some issues which are common for all the companies operating within the confines of this sector
(Harmon, 2019). In this regard, the 2 main issues that have affected automotive sector to a large
extent over the course of time are explained as follows:-
Vehicle Recalls: With the passage of time, large number of cases of defective elements
present within the vehicle have been reported by the users to the automobile companies. This
leads to the situation whereby automotive organisation has to recall the defective cars in order to
improve the defect and then provide defect free car to the customers. In this regard, it is usually
seen that recalls generally take place due to 2 main reasons. Such reasons have been explained
with the help of example as follows:- Design defects: One of the most apparent reasons behind this is ascertained to be design
defect whereby usually a part of an automobile is not designed in a safe manner, resulting
into development of a car which may pose threat to the life of users (Reasons for Car
Recalls, 2019). For instance: Takata airbag recall is regarded as one of the biggest
vehicle recalls ever taken place in history of automobile sector. This affected 19
automobile makers along with 42 million automobiles within the confines of US alone.
The faulty cars resulted in 25 deaths along with over 300 injuries within the respective
nation. Hereby, the major reason for the mishap was acknowledged to be their
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development via the usage of inflator which if exposed to humidity or moisture had the
probability of explosion (Takata Airbag Recall: Everything You Need to Know, 2019).
 Manufacturing defects: Hereby, recall of vehicles takes place because the parts are
designed keeping into consideration safety and security of users yet an error within a part
of automobile developed or assembled inappropriately leads to a mishap. For instance:
Recall of Buick LaCrosse is a renowned illustration of production defect. Hereby, the
electrical wiring was not done as per requirements to create a seal and this caused the
cable to be installed in an incorrect manner, creating space for corrosive moisture.
Vehicle Emissions: This is yet another issue that has been affecting the automobile sector
and users pertaining to it. In this regard, it has been acknowledged that a typical passenger
vehicle emits approximately 4.6 metric tons of carbon dioxide every annum (Greenhouse Gas
Emissions from a Typical Passenger Vehicle, 2019). Vehicle emissions contain a number of
chemicals as well as particulates that get created whereby fuel is burned within the engine. Some
of the major substances found in a car’s exhaust include carbon dioxide, ozone, and carbon
monoxide which are harmful for human health. They affect the lungs of people, posing them to
the risk of getting struck by harmful diseases. In this regard, individuals which have been
suffering from asthma and / or COPD get impacted the most by the emissions of cars. A large
number of chemicals found within vehicular emissions are recognised to be carcinogens (The
environmental impacts of cars, explained, 2019). Being exposed to emissions inflates the threat
for individuals to get affected by Cancer. This also leads to global warming which is a disastrous
phenomenon for people living on Earth.
2. PESTLE and 2 issues affecting automobile subsector
PESTEL analysis can be referred to as framework which is used to carry out macro
environmental analysis of an organisation or a sector (Dwyer and Hopwood, 2019). In the
present case, automobile subsector has been taken into considered for conducting external
analysis. PESTLE applied to automobile market is as follows:-
Political: The stable political state of UK fosters the growth of companies operating
within the automobile subsector and facilitates them to act within the confines of regulations.
Economical: UK is ranked at 5th position in terms of biggest economies across the global
periphery (The World's Top 10 Largest Economies, 2019). This presents opportunities to
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automobile subsector to make use of infrastructural, technological and other facilities of the
nation to attain growth.
Social: The needs and wants of people keep on changing. This may act as an opportunity
or threat for companies operating within automobile subsector depending upon the response time
they take to facilitate changes in their offerings as per customer preferences.
Technological: Automobile subsector is recognised to be one of the most technological
markets across the globe (Dupraz, Nakamura and Steinsson, 2019). Over the passage of time,
innovations like fuel driven cars, driver less cars, electrical cars and many more, have disrupted
the whole market.
Environmental: Acting in the interest of environment is the obligation of every business
organisation. Automobile subsector is seen to be the most affected by environmental aspect as
the pollution, carbon footprints and vehicle emissions act against the interest of nature.
Legal: Automobile subsector is guided by a number of laws such as in relation to health
& safety, employment regulations, equality law etc. (Myers, 2019). All of these are taken into
consideration by the companies pertaining to this market to ensure long term sustainability at
market place.
Categorisation of issues in relation to PESTEL analysis
The two issues encountered by Automobile Subsector, namely, vehicle emissions and
vehicle recalls can be categorised with the help of PESTLE. Such categorisation is done as
follows:-
Vehicle Recalls- Technological Factor
Over the course of time, a large number of vehicles have been recalled due to
manufacturing or design defects. Even though the automotive companies make use of emerging
and latest technologies to add new features to cars, at times, the engineers leave mark for defect
or corrosions. This leads to recalls of cars whereby the customers report the issue to concerned
automobile company and get the same rectified and delivered back to them (Jaimovich, Rebelo
and Wong, 2019). Thus, categorisation of vehicle recalls into Technological factor of PESTLE
seems to be relevant as the organisations are not able to incorporate the technologies
appropriately into the manufacturing system or process of vehicles.
Vehicle Emissions – Environmental Factor
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The emissions released out of cars consist of chemicals which pose significant threat to
lives of people. The chemicals released cause Air Pollution and act as a major source for global
warming. This is a significant threat to the ecological cycle and the environment in which
humans persist. This indicates that the emissions released out of cars is a violation of
environmental aspect of macro environmental analysis framework which states that entity should
act in the interest of environment at all times (Runyan and Covin, 2019). Thus, the categorisation
of vehicle emission into environmental factor of PESTLE seems to be relevant.
3. Positive and Negative Impact over selected business
The 2 issues that have significantly impacted upon the business within automobile sector
are recognised to be vehicle recalls and vehicle emissions (Jaimovich, Rebelo and Wong, 2019).
They are acknowledged to be the situations that keep on taking place in the concerned subsector
at rapid intervals of time. The impact of these issues is seen both in positive as well as negative
terms. Volkswagen is taken as the organisation to understand the impact that both these issues
had upon this top notch automotive company.
NEGATIVE IMPACT
Vehicle emissions and recalls had a severe impact on Volkswagen which was once a top
notch company within the automobile sector. The organisation got involved in a scandal owing
to the execution of unethical as well as illegal activities in the premises of company. This
impacted upon the goodwill of company in the long run. Also, the effects were seen upon its
share prices. The revenues of this firm fell down to the lowest within a course of last 10 years
(Silva, 2019). Both the issues made a hefty bunch of consumers lose their loyalty towards the
brand and shift to other alternative brands. The company was fined heavily as a result of being
involved in an unethical act of concealing the actual emissions by way of fitting a cheat device in
vehicles.
However, the Volkswagen scandal also had a positive impact upon the concerned
business, illustrated as follows:-
POSITIVE IMPACT
Vehicle recall generally takes place owing to a manufacturing or a design defect in the
automobile. In case of Volkswagen, this took place due to the cheat device that was fitted within
the car which showed lowered vehicular emissions. Thus, in case of selected organisation, both
the issues had an interrelation and they collaboratively had a positive impact on business. This
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was acknowledged to be the opportunity that it created for the automaker to make use of latest
and emerging technologies with a view to ensure that such situations do not take place in future
course of time (Werhane, 2019). The scandal took place owing to the fitting of cheat device to
cover the excessive emissions that released out of the cars manufactured by Volkswagen. This
impacted on the business in a positive manner in the way that it presented company with a
chance to enhance its destroyed goodwill by applying ethical practices and methods in future.
4. Reflection
While carrying out this report, I got the opportunity to conduct a detailed analysis of
automobile subsector and 2 issues affecting it in the long run. The execution of this report helped
me in a great manner to gain knowledge about a number of aspects which were not known to me
in depth earlier.
Challenges encountered and overcame
I encountered various challenges while doing this report, however with my immense
dedication and hard work, I was able to encounter them. Such challenges which affected my
course of report work are illustrated as follows:-
Inadequate Time: This was the most significant challenge for me as I considered that the
area of study was too wide to be researched in the allotted frame of time. A number of learning
outcomes were linked to the report, which were to be achieved by the end of report execution.
This caused challenge for me to accomplish the report objectives within due course of time.
However, I overcame this challenge by making use of my multitasking and time management
skills. With the help of these, I made a time table and conducted activities according to it. This
helped me in executing all the tasks in stipulated time.
Lack of resources: It was yet another challenge encountered at the time of execution of
report. I felt that I could not have access to all the required reading materials as the time allotted
was less. However, I overcame this challenge with the help of my peers and seniors who guided
me about the most essential resources and materials that were required to be read for effectively
collecting the information for the report. Thus, with the guidance and help of others, I was able
to gather all the necessary facts about the automobile subsector and the issues affecting it.
Lessons learned
While conducting this report, I learned a number of lessons. I understood that time
management and multi tasking are the key elements to ensure that the tasks allotted to me get
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completed within the allotted course of time. Further, to achieve the objectives of report, it is
important for an individual to make use of analytical, observation and research skills (Werhane,
2019). Lastly, I learned that smart work is equally important as hard work as this provides an
individual with a manner in which assigned tasks can be completed in due time frame.
CONCLUSION
On the basis of above discussion, it can be said that environmental scanning is key to the
effective running and functioning of a corporate or a subsector. Some of the most significant
issues affecting the automobile subsector are recognised to be vehicle recalls and vehicular
emissions. These have negative and positive impact upon an organisation operating within the
confines of concerned sector. Further, it is recognised that multitasking is the most essential skill
for an individual to complete a report within the allotted course of time.
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REFERENCES
Books and Journal
Clinton, L. and Whisnant, R., 2019. Business Model Innovations for Sustainability. In Managing
Sustainable Business (pp. 463-503). Springer, Dordrecht.
Dupraz, S., Nakamura, E. and Steinsson, J., 2019. A plucking model of business cycles (No.
w26351). National Bureau of Economic Research.
Dwyer, J. and Hopwood, N., 2019. The business communication handbook. Cengage AU.
Harmon, P., 2019. Business process change: a business process management guide for
managers and process professionals. Morgan Kaufmann.
Jaimovich, N., Rebelo, S. and Wong, A., 2019. Trading down and the business cycle. Journal of
Monetary Economics. 102. pp.96-121.
Myers, M. D., 2019. Qualitative research in business and management. Sage Publications
Limited.
Runyan, R. C. and Covin, J. G., 2019. Small Business Orientation: A Construct
Proposal. Entrepreneurship Theory and Practice. 43(3). pp.529-552.
Silva, E. B., 2019. The state and capital in Chile: Business elites, technocrats, and market
economics. Routledge.
Werhane, P. H., 2019. The normative/descriptive distinction in methodologies of business ethics.
In Systems Thinking and Moral Imagination (pp. 21-25). Springer, Cham.
Online
Reasons for Car Recalls. 2019. [Online]. Available Through:
<https://www.chicagolawyer.com/reasons-car-recalls/>.
Takata Airbag Recall: Everything You Need to Know. 2019. [Online]. Available Through:
<https://www.consumerreports.org/car-recalls-defects/takata-airbag-recall-everything-
you-need-to-know/>.
2014 Buick LaCrosse Recalled for a Corrosion Problem That Could Affect Circuits. 2019.
[Online]. Available Through:<hhttps://www.edmunds.com/car-news/2014-buick-
lacrosse-recalled-for-a-corrosion-problem-that-could-affect-circuits.html>.
The environmental impacts of cars, explained. 2019. [Online]. Available Through:
<https://www.nationalgeographic.com/environment/green-guide/buying-guides/car/
environmental-impact/>.
Greenhouse Gas Emissions from a Typical Passenger Vehicle. 2019. [Online]. Available
Through:<https://www.epa.gov/greenvehicles/greenhouse-gas-emissions-typical-
passenger-vehicle>.
The World's Top 10 Largest Economies. 2019. [Online]. Available Through:
<https://www.focus-economics.com/blog/the-largest-economies-in-the-world>.
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