Professional Documents
Culture Documents
Automobile Industry in Uk
Automobile Industry in Uk
Automobile Industry in Uk
United Kingdom has been a colossal manufacturer of automobiles in last 10 years. Producing more that
8 million vehicles and engines and exporting more than 80% of these, UK automobile industry stands as
a driving force of its economy. The automobile industry generates a yearly turnover of around 55 Billion
Pounds and largest value from exports.
Nevertheless, the country that has automobile players like, Alexander Davis, Aston Martin, Bentley,
BMW, Ford, Honda, Jaguar, etc., is still said to be under a vast influence of dwindling supply chain and its
dependence on foreign market.
Let us scrutinize the situation of UK automobile industry by doing an internal and external
environmental audit.
INTERNAL AUDIT
Internal environmental audit is performed to understand the position of industry with respect to its own
environment. SWOT is one of the tools used to perform internal audit which is employed for studying
the strengths, weaknesses, opportunities and threats of the subject.
STRENGTHS
2. Diversity in products
Products manufactured by UK automobile industry range from various premium and sports cars
to commercial vehicles and engines. Around 80% of this is exported, yearly.
WEAKNESSES
THREATS
2. Increasing competition
With new companies coming in UK along with foreign direct investment the competition is
bound to soar, ultimately increasing threat for existing companies.
The automobile industry in UK has been tactically working towards creating new opportunities
and enhancing technology. It has extensively slogged to make UK more attractive for foreign
investors. Through automotive industry’s external analysis, we shall study influence of external
factors on the industry. The two major models discussed here are PESTLE Analysis and Porter’s
Five Forces’ Model.
PESTEL ANALYSIS
Political
To ensure there is no monopoly created in the industry, certain policies restricting firms from
forming cartels and fixing price have been implemented. They also control the size of
automobile companies.
Economic
With the advent of increasing inflation across the world, it is predicted that the purchase of
automobiles shall increase in coming years. Also, globalisation has opened doors for foreign
investors in UK.
Social
Recent researches show that young population in UK is declining and older population is rising.
Hence, it is advisable that companies focus on creating more products catering to smaller
families and older population.
Technology
Increased focus on providing eco-friendly vehicles has encouraged industry to continually invest
in research and development. With popularity of new designing softwares, Global Positioning
Systems for navigation, etc, technology has advanced two folds.
Environmental
As people are getting more aware and concerned about a healthy environment, it is imperative
to create products that are eco-friendly. Hence, it has created a pressure on the industry to
focus on environmental issues as well.
Legal
A few legal policies have been imposed by UK government like compulsory fitment of Electronic
Stability Control and Tyre Pressure Monitoring Systems in all the cars produced.
5. Existing Competition
As UK is home to around 50 car manufacturers selling 200 models, the internal competition
among the companies is inevitable. Apart from the local car manufacturers like GM, Ford, etc,
the foreign manufacturers are also giving a lot of competition.
The external influences play a major role in casting future of automobile industry in UK.
Analysing the internal as well as the external environment of UK’s car industry helps identifying
how it has been performing and what is the scope for improvement.
United Kingdom offers an array of car models in a highly competitive market. Nonetheless, it is
still facing a lot of issues in recovering from the past downfall. Market experts predict that the
industry shall still be able to cater to the new more demanding market.