Sample Essay on Factors Affecting Automobile Industry in UK

Sample Essay on Factors Affecting Automobile Industry in UK

Factors affecting automobile industry in UK come from within the United Kingdom and other countries that manufacture automobiles. Among the major factors that are affecting this industry is competitive pressures from other countries. The automobile manufacturing industry has increasingly become competitive.

Today, there are many counties in South East Asia, Eastern Europe, India and China that are manufacturing cars. Over-capacity in this sector especially automobile assembly implies that UK is facing stiff competition. What makes the situation even worse is the fact that most of these countries are selling their vehicles at relatively low prices.

This is because they are low-cost labor economies. As a labor-intensive supplier of automobile, UK is under enormous pressure to produce automobiles that deliver the expected technical edge while driving the cost down.

Buyers of automobiles from the automobile industry in UK are also posing a challenge in the industry. Today, buyers of automobiles from this industry are very selective on the vehicle to purchase. Trade buyers of automobiles have become too selective which has left corporate disposal vehicles to private equity entities.

With the increasing pressures in the automobile industry, cash flow is becoming relatively predictable. On the other hand, players in the private equity have become relatively comfortable which has resulted in stiff competition for the automobile assets and higher prices. Although the overall industrial consolidation pace has slowed down, existence of private equity keeps valuation and volume of transactions buoyant.

Sustainability of the manufactured automobiles is another factor that is affecting the automobile industry in UK. Public opinions and environmental concerns are affecting the decisions of the automobile manufacturers in UK. This is because manufacturers have to be conscious of the materials and engines that they use in manufacturing their automobiles.

Public opinions and environmental considerations impact on the choice of the suppliers as well as the life-cycle decisions made by automobile manufacturers. Manufacturers are forced to consider supply changes and the impacts that they will have on the environment. Public interest organizations and NGOs may require suppliers of automobile parts and manufacturers to share some information on the environmental impact that their products and processes have.

The supply chain is also affecting the automobile industry in UK. Supply chain is never still. This implies that for the automobile industry in UK to remain competitive it has to invest in research, development and promotion of its automobiles to keep up with the dynamic market.

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