Impact of Globalization on the UK Car Industry: A Research Project

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RESEARCH PROJECT
IMPACT OF GLOBALISATION ON THE UK CAR INDUSTRY

Table of Contents
INTRODUCTION............................................................................................................................. 2
RESEARCH TITLE.........................................................................................................................2
AIM............................................................................................................................................ 2
OBJECTIVES................................................................................................................................ 2
BRIEF INTRODUCTION................................................................................................................2
RATIONALE FOR CHOOSING THE TOPIC.....................................................................................3
LITERATURE REVIEW......................................................................................................................3
METHODOLOGY............................................................................................................................. 5
TIMELINE OF RESEARCH ACTIVITIES...............................................................................................6
REFERENCES...................................................................................................................................8
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INTRODUCTION
RESEARCH TITLE
‘IMPACT OF GLOBALISATION ON THE UK CAR INDUSTRY’
AIM
The aim of the current research is to assess the impact of the globalisation process on the car
industry in the UK.
OBJECTIVES
• To analyse the impact of globalisation on the business of car manufacturing companies
in the UK
• To identify new opportunities for UK car makers in the emerging economies of the world
• To analyse the changing demand of the customers so that some additional features can
be added in the existing car models
• To analyse the impact of changing market situations on the British car industry
BRIEF INTRODUCTION
At present, there are a number of premium and sports manufacturers in the UK like Bentley,
Rolls Royce, Aston Martin, Jaguar, Land Rover, Lotus, Ford, McLaren, Honda, Nissan and
Toyota. Globalisation has made some big changes in the car industry in the UK. Nissan and
Jaguar are one of the most successful cars manufacturing companies in the UK, however, both
these companies are of Japanese origin and doing good business in the UK. Volkswagen and
BMW are German companies who have purchased the most popular car brands like Rolls Royce
and Bentley (Thoms and Donnelly, 2017). TATA motor which is an Indian automaker is the
parent company of Jaguar. Therefore, it can be said that the most iconic British brands are
working under the flag of foreign origin companies. It has become possible due to the
globalisation process where different markets work in collaboration and the quality of the
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products matter more than the origin of the company. This research proposal will highlight
different methods used for data collection so that the different theories related to the topic can
be analysed and the right recommendation can be provided to improve the situation of
dropping car sales.
RATIONALE FOR CHOOSING THE TOPIC
The current reach aims to analyse the globalisation process in the British car industry and its
impact of the sales and profits of the industry. The topic is important to be analysed because at
present the car manufacturing industry is facing a slowdown phase. This slowdown is due to
over-dependence on the external market for car manufacturing parts. Globalisation has created
a number of opportunities for British carmakers in the European market but after BREXIT
different trade restrictions are going to make a severe impact on the business of these
companies (Maxcy and Silberston, 2017). The car industry in the UK has been registering
constant growth for many years but last few years have seen a considerable decrease in car
manufacturing and sales figures. In 2017, the new car sales volume fell back by 1.4 % the reason
for the slump is the rising cost and the uncertainty in the market over BREXIT. Due to this
uncertainty, the car industry is witnessing depression in the demand and the trend is expected
to be followed in the next year also.
LITERATURE REVIEW
According to Pavlínek and Ženka, (2010) globalisation is a condition in which companies can
establish their business units in a foreign land and take benefit of the high growth rate or
demand of the consumers. Globalisation benefits the car industry because it creates
opportunities to achieve economies in scale and find new markets for the products of the
company which were not an option a few decades ago. According to Chanticeleer (2019) being
a part of the EU car market, the car industry in the UK has experienced an increase in the car
manufacturing units by around 1.67 million in the last eight years. In addition, this collaboration
has created 120,000 million jobs. However, with BREXIT going to be implemented soon, Britain
will end all its ties with the European car market which will negatively impact import of
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automotive parts used for manufacturing cars in the UK. German car makers BMW and
Volkswagen have been able to expand their business in the UK due to liberal trade policies
between Britain and EU. These car manufacturing companies constitute a major portion of the
UK car market and restriction of trade with European Union will certainly impact the growth of
the car industry in the UK. In addition, around 50 % of cars manufactured in the UK are
exported to the EU countries and BREXIT deal can be disastrous for this industry, this reasons
the British car industry is in the favour of ‘No BREXIT’.
According to Dodourova and Bevis (2014), the link between the UK and EU automotive industry
is very strong as major British car companies are owned by German car makers. BMW owns
Rolls Royce and Mini while Volkswagen is the owner of Bentley. All these uncertainties have
badly hit the car sales in the UK. In 2018, a number of new cars sold were lowest since 2009.
The reason for the declining sales is uncertainty over BREXIT, higher emission standards, the
emergence of electric cars and the resulting backlash against diesel cars. Rising interest rates
are also making an impact on car sales as around 80% of cars are financed by different financed
companies (Chanticleer, 2019). The UK car manufacturing industry imports 60% of its parts
from Europe and the recent fall of the Pound against Euro has raised the prices of imports
which finally results in an increase in the final car prices. The car manufacturing industry is also
struggling from a skill gap and there is a scarcity of personnel in design and production. The
movement of workforce form EU nations to According to Dasgupta (2019) Britain may also be
affected in the post-BREXIT era creating new challenges for the car manufacturers. The British
car industry is experiencing a sharp decline in the new car sales in the last few years. The used
car market is also stagnated as car owners are looking for versatile cars which can match their
lifestyle. The uncertainty surrounding BREXIT has made the consumers more cautious and they
want to analyse the whole situation and then take any decision. The reason for falling sales
figures may also be the result of consumer suspicion regarding diesel cars.
Gastrow (2012) explains that despite all this BREXIT impact, the car market is benefitting from
some of the internal developments such as demand of the customer for such cars which can
provide versatility, luxury and value. Car manufacturers like Ford, Volkswagen and Nissan have
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been able to catch the imagination of the customers and offered unique features in the car so
that value offered to the customer can be enhanced. Ford Fiesta, Volkswagen Golf and Mini
Hatch are the highest selling car models in the UK in 2018. The UK car industry has experienced
tremendous growth in the hybrid and electric cars using electrical energy or other alternative
fuels in place of Diesel or Petrol. People are highly getting aware of the emission produced by
the diesel cars and now planning to switch to a more environmentally sustainable solution of
commuting.
METHODOLOGY
RESEARCH APPROACH
The research approach in the current assignment will be to collect both qualitative and
quantitative data. Both types of data are important for the research methodology as a different
kind of information is provided by each type of data (Law, 2017). The qualitative data includes
the views and opinions of the people and can be used to prepare a hypothesis about the
research findings. On the other hand, the qualitative data is in the form of numerical data which
can be measured. By being able to measure the results of the data analysis, managers can
assess the data more easily and accurately and these results can also be used at different
platforms for reference.
MAIN RESEARCH TECHNIQUES
Research techniques are used with an aim to collect useful data from a range of sources. The
interview is a popular data collection technique in which conversation is conducted in-person or
on a telephone. These interviews can be formal or semi-formal based on the topic of the
research. The questions asked in the interview should be clear, unambiguous and open-ended
which encourage the interviewee to express his views freely (Dodourova and Bevis, 2014).
Surveys are also a popular method of data collection. Questionnaires include asking a set of
questions for the survey participants, the responses of the customers can be easily analysed
and by using different data analysing techniques. Case studies focus on some specific problem
and recording the viewpoint of people associated with the case study.
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SUGGESTED DATA COLLECTION PROCEDURES
For the current research, two types of data collection techniques will be used. The primary data
which is the first-hand data will be collected by reading the articles and journals of the authors
which are available online on different websites and blogs. The primary data helps in preparing
a well-researched thesis as a summarised account of different theories is presented in the
literature review (Begley, et al. 2015). This literature review is used to understand the problems
in a subjective manner. The secondary data will be collected with the help of questionnaires. It
is a research method in which some predefined set of questions need to be answered by the
respondents.
ANALYTICAL TECHNIQUES
Analytical techniques are used to summarise the findings of the research methodology in an
easily understandable forms for this purpose, pie chart, bar graphs and line graphs are used
which helps in representing the data in an interactive manner, this data can be easily analysed
by the policymakers so that quality of products and services can be improved and the quarries
and complaints of the customers can be used as a medium to improve the basic functions
(Dunlop, et al. 2012).
TIMELINE OF RESEARCH ACTIVITIES
S.NO. ACTIVITIES TO BE DONE TIME SCALE (IN WEEKS)
1.
DECIDING THE AIM AND OBJECTIVES FOR THE
RESEARCH
1 WEEK
2. FINALISING THE METHODOLOGIES OF RESEARCH
WHICH NEED TO BE USED FOR DATA COLLECTION
3 WEEKS
3. ASKING QUESTIONNAIRE FORM THE RESPONDENTS 4 WEEKS
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AND PREPARING A REVIEW OF THE LITERATURE
AVAILABLE IN BOOKS AND THROUGH ONLINE
MEDIUMS
4.
COLLECTING DATA FROM DIFFERENT SOURCES
3 WEEKS
5. DATA ANALYSIS AND EVALUATION 2 WEEKS
6. FINDINGS AND DISCUSSIONS 2WEEK
The timeline for the research activity is a proposed work schedule which needs to be followed
to complete different steps of the projects on time. In the first week, the aims and objectives
for the research are decided so that different activities can be aligned with the long term goals.
After which, the research methodologies which need to be employed to get useful qualitative
and quantitative data are finalised. The next stage is of performing the agreed quantitative and
qualitative data collection methods such as interviews, focus groups and questionnaire, this
activity will take the time of four weeks. The data collected with help of interviews and
questionnaire is analysed so that some useful conclusions can be deducted for the available
data. The final stage is of summarising the whole discussion which will take a time of two
weeks.
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REFERENCES
1. Begley, J., Collis, C. and Donnelly, T., 2015. Skills shortages: A break on the British car
industry?. Local Economy, 30(6), pp.593-608.
2. Chanticleer, 2019. Brexit threatens UK's growing car industry. Online available at:
https://www.afr.com/brand/chanticleer/brexit-threatens-uks-growing-car-industry-
20190116-h1a4x6 [last accessed on 18 January 2019]
3. Dasgupta, D., 2019. Online available at:
https://www.wns.com/insights/blogs/blogdetail?504=the-pros--cons-of-brexit-for-uk
%E2%80%99s-automotive--healthcare-industries [last accessed on 18 January 2019]
4. Dodourova, M. and Bevis, K., 2014. Networking innovation in the European car industry:
Does the Open Innovation model fit?. Transportation Research Part A: Policy and
Practice, 69, pp.252-271.
5. Dunlop, C.A., Maggetti, M., Radaelli, C.M. and Russel, D., 2012. The many uses of
regulatory impact assessment: A meta analysis of EU and UK cases. Regulation &‐
Governance, 6(1), pp.23-45.
6. Gastrow, M., 2012. A review of trends in the global automotive manufacturing industry
and implications for developing countries. African Journal of Business Management,
6(19), pp.5895-5905.
7. Law, C.M., 2017. Restructuring the global automobile industry. Routledge.
8. Maxcy, G. and Silberston, A., 2017. The motor industry. Routledge.
9. Pavlínek, P. and Ženka, J., 2010. Upgrading in the automotive industry: firm-level
evidence from Central Europe. Journal of Economic Geography, 11(3), pp.559-586.
10. Thoms, D. and Donnelly, T., 2017. The motor car industry in Coventry since the 1890's.
Routledge.
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