Sample Essay on PESTEL Analysis on Car Industry

PESTEL Analysis on Car Industry

The automobile industry has flourished like never before over years. This can be credited to change in living standards of many people in world and an increase in the amount of disposable incomes. Unfortunately, new and inexperienced investors have joined the car industry and this as increased the level of hesitancy as many consumers do not trust these investors. It has become hard to predict the external environment. For the widely acknowledged car manufacturers and distributors in the industry to excel, coming up with a great PESTEL analysis been the sole solution.

Through PESTEL analysis, it has been easy to predict the future of the car industry macro environment. For any automobile company, it has been easy to identify the key drivers of change in the industry. For a fruitful PESTEL analysis on car industry, it is wise to consider how the macro environmental factors will impact the venture, and these factors include;

  • Political factors

These are factors that bring out the probable governmental restrictions, laws and regulations and security measures that should apply to the industry all together. Laws and regulations have been there since the sale of the first car and they generally revolved around the environmental norms. Government taxes and polices have great influence in the car industry as they determine the success of a car company.

  • Economic factors

The sale of cars has been increasing on daily basis, hence the high amount of revenue. However, with less demands in some parts of the world than supply, robust revenue taxes have been withheld overtime. By 2008, total increase in GDP has been experienced globally. Decrease in exchange rate has also affected several car sellers.

  • Social factors

Changes in the consumers’ preferences have affected the car industry greatly. Cars that guarantee low gas emissions and great fuel efficiency have taken the market with a bang ever since. Recession has also affected the sale of cars on the global platform. Gender wage equality as also impacted the car industry positively.

  • Technological factors

Many car sellers and distributors have opted for rapidly evolving technology to gain competitive edge in the market. The car industry as also experienced increase in use of new and lavish designs to overcome the cut margins in the industry. Governments have played great role in restrictions on any technology that may cause environmental pollution.

  • Environmental factors

The ecological effects on car industry have increased substantially over the past years. There have been great concerns on global warming and greenhouse effects. Governments and NGOs have been on the frontline to control pollution. Customers have also shifted to us more eco-friendly cars and hybrid car.

  • Legal factors

It is compulsory for the car industry to comply with wide range of laws and regulations. These companies should also adhere to restrictions set on control pollution and any other activity that may cause harm to the environment.

It is clear that relying on PESTEL analysis on car industry is a great strategy to easily rank among the best car dealers. Institutionalization of car industry finance is a great step towards sustainable growth. Availability of disposable money as increased the demand and development of the car industry. More people are willing to buy cars for day to day operations and the trend does not seem to change soon due to ever-changing mores in the society and availability of better designs. Thus, it is brilliant to invest in the car industry once you have a clear PESTEL analysis on the local, regional or international market.

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