External Factor examination

PEST Analysis of Automobile Industry


Laws and government polices have damaged this market since the 1960's. Almost all of the regulations come from buyers increasing issues for the environment and the matter for less dangerous automobiles. The first safety act approved by Congress was in 1966 and was called the National Traffic and Car Safety Act. This act forced companies to improve the safety for the passengers, the driver visibility, as well as the braking with the car. In addition, it stated that manufacturers were required to inform the general public when it a new recall within the cars. The motivation to get the completing of this security act was Ralph Nadar's 1965 new Unsafe any kind of time Speed: The Designed-in Perils of the American Automobile. Safety concerns weren't the only issues during this period. There was also developing concern to get the environment could the olive oil crisis. Based on the article " Motor Vehicles and Passenger Car Bodies", Congress passed acts in 1965 in addition to the 1970's. The Vehicle Air Pollution and Control Act was passed in 1965. This was the first take action to set specifications for automobile pollution. In that case in the 1970's, Congress exceeded the Clean Air Act that demanded a 90% reduction in automobile emission within the next 6 years (Gale, 2004). EconomicВ

The automobile industry has a large impact on the U. S. economy. The Center for Vehicle Research mentioned that this industry is the main user of computer potato chips, textiles, aluminium, copper, metal, iron, lead, plastics, vinyl fabric, and rubberized. The study as well showed that for every autoworker there are several other jobs developed in other industrial sectors. These industrial sectors include anything at all from the aluminums to lead to vinyl. In 2001, the overall sales of automobiles were 3. 7% of the country's gross domestic product. This percentage computes to be $375 billion us dollars in revenue. В TechnologyВ

Technology is usually changing quickly because of that the demand of the buyer also modify. The technological change as well concerns for the economy and global warming possess caused the car industry to develop alternate gas vehicles. At first, automakers would not want to look into the development because of the high cost and the many risks engaged. Because of new legislation, that were there no choice but to generate the technology to make the fuel-efficient cars. The automakers made a decision that electrical cars is the best way to meet the legal guidelines demands. " Early types were unpopular because of slow cruising rates and lack of performance, yet by the end of the century, electric power car production began to be functional. " (Motor Vehicles) At the end of the 1990's manufacturers was coming up with the technology to make internal burning engine with an electric electric motor. SocioculturalВ

Modern-day society idol judges people around the type of car you travel. Society will not like to admit to this but it is very accurate. Manufactures understand this occurs and focuses on their market segments by these thoughts. For instance , anyone who drives a minutes van is usually perceived as a soccer mommy. This is because the manufactures focus on mini vehicles to moms. Anyone who hard drives a nice vehicle is thought to be wealthy. No one wants to be viewed driving an unattractive piece of junk because of the other people will think of him or her. Consumers also just feel better when they are generating a nice or new car, if makes it feel better about themselves. Another aspect of the sociocultural is the environmental concerns to get the need of fuel-efficient vehicles. Many environmentalists are worried about the impact that the gas cars have on the environment. There is also legislation that will need cars to average some miles per gallon. В Automobile Industry Five Pushes of Competition ModelВ

Threat of New Traders


The threat of new entrants is extremely low in the automobile industry. The industry is very mature and it has efficiently reached financial systems of range. In order to be competitive in this sector a production must...


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